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Cablegate: Mofat-Wha Consultations: Rok's Expanding Ties To

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C O N F I D E N T I A L SECTION 01 OF 04 SEOUL 002177

SIPDIS

E.O. 12958: DECL: 11/06/2018
TAGS: PREL EAID EINV ETRD SK BR BL CU CI MX PE
PA, UY, VE
SUBJECT: MOFAT-WHA CONSULTATIONS: ROK'S EXPANDING TIES TO
LATIN AMERICA

SEOUL 00002177 001.9 OF 004


Classified By: POL M/C Joseph Y. Yun. Reasons 1.4(b/d)

1. (C) SUMMARY: South Korea is actively expanding ties with
Latin America through trade, investment, overseas development
assistance and high-level engagement, according to ROK
Foreign Ministry officials who met with WHA A/S Thomas A.
Shannon on October 15 for consultations. The Ministry's
Latin American and Caribbean Affairs Bureau reported that,
compared to 2001, Korea's trade volume with the region had
nearly tripled to USD 37 billion in 2007, and Korean
investment had shot up to USD 1.2 billion. Bureau officials
further outlined ambitious plans to increase ROK development
assistance in order to reduce poverty and support Millennium
Challenge goals. Seoul hosted its first senior dialogue with
Latin American governments in September, drawing seven
ministers from Latin American countries, and is considering a
presidential-level multilateral meeting next year. ROK
President Lee Myung-bak plans to visit Peru, Brazil, and
Chile in November and attend the Asia Pacific Economic
Cooperation (APEC) conference. The ROK had also informed the
Government of Cuba of its desire to establish consular
relations in order to protect the estimated 4,000 ROK
tourists who visit Cuba each year, but Cuba has not replied.
Shannon praised the ROK's approach to Latin America as
supportive of democracy and free markets. END SUMMARY.

--------------------------------------------- ---
CONSULTATIONS ON LATIN AMERICA AND THE CARIBBEAN
--------------------------------------------- ---

-- ROK VIEW

2. (C) At the fifth Korea-U.S. Consultation on Latin American
and Caribbean Affairs on October 15, Ministry of Foreign
Affairs and Trade (MOFAT) Director General for Latin American
Affairs Doo Jung-soo told Assistant Secretary of State for
Western Hemisphere Affairs Thomas A. Shannon that the ROKG
viewed recent political and economic trends in Latin America
positively and was actively expanding its economic
relationships with a range of countries in the region. Latin
America is home to an estimated 100,000 Koreans and their
descendants. The ROKG was also raising the political profile
of its relationships through frequent visits by senior
officials in both directions, including the June 2008 visit
by Paraguayan President Lugo to Seoul, a visit by Uruguayan
President Vazquez in August, G8 Summit margin meetings in
March with President Calderon of Mexico and President Lula da
Silva of Brazil. Most forward-looking, perhaps, was an

SEOUL 00002177 002.12 OF 004


economic summit meeting Seoul hosted in September, attended
by seven Latin American ministers. Thematically focused on
investment, energy, and infrastructure, the gathering also
enjoyed the participation of several ROK ministers and a
contingent from Korea's private sector. MOFAT was proposing
a presidential-level summit next year, but this was
preliminary. President Lee Myung-bak was scheduled to visit
Peru, Brazil, and Chile in connection with attending the APEC
Summit in Peru in November.

3. (C) DG Doo stressed the economic aspects of relations with
Latin America, saying that the ROKG's approach focused on
securing energy imports, providing infrastructure
development, and expanding its overseas development
assistance (ODA) work in Latin America. The ROK was also
excited about growing trade relationships: two-way trade
volume with Latin America had expanded from USD 13 billion in
2001, to USD 21 billion in 2005, to USD 37 billion in 2007,
and was on pace to exceed USD 45 billion in 2008
(January-August volume was USD 31 billion). Trade with
Chile, with which the ROK concluded a free trade agreement in
2004 had risen from USD 1.8 billion in 2003 to USD 7.9
billion in 2007.

4. (C) Moreover, at USD 12.8 billion, the ROK's trade surplus
with Latin America through August this year was larger than
that with China, the U.S. or EU. ROK investment in Latin
America had increased from USD 450 million in 2005 to USD 1.2
billion in 2007. Hyundai Automotive, Samsung Electronics,
and Dongkuk Steel, for example, were investing in Brazil, and
SK Company in Peru. The ROK had held two rounds of
negotiations toward a free trade agreement with Mexico, and
concluded FTA feasibility studies with Peru and MERCOSUR.

5. (C) Office Director for Latin American Regional
Cooperation Jang Yeun-ji explained that the ROK planned to
increase its ODA as a percentage of gross national income
from 0.1 percent now to 0.15 percent by 2012 and 0.25 percent
by 2015. Aiming to reduce poverty and support attainment of
Millennium Challenge goals, the ROKG had developed a targeted
approach to providing ODA to Latin American countries,
letting the countries have substantial input into projects.
About 7 percent of the ROK's overall ODA went to Latin
America, Jang explained, in the form of grants and
concessionary loans. Since 1998, Korea had disbursed USD 232
million to 13 ODA projects in the region, selecting partner
countries for grants and loans and prioritizing efforts in
areas where Korea had a comparative advantage. Korea had

SEOUL 00002177 003.5 OF 004


recently established an ODA branch in El Salvador and would
soon do the same in Colombia. Though the amount of its
assistance was relatively small, Jang said that many
countries were interested in learning from the example of the
ROK's rapid economic development and democratization.

-- U.S. VIEW

6. (C) A/S Shannon praised the ROK's expanding relationships
with Latin America and its targeted use of ODA. Turning to
the U.S. perspective on the region, Shannon said that he saw
Latin American leaders from both ends of the political
spectrum facing a common challenge to address poverty and
economic development. He argued that countries with
relatively stronger existing government institutions, such as
Brazil, were more successful at addressing this challenge,
whereas other countries without such institutions, such as
Venezuela and Bolivia, were instead resorting to populist
policies that did not lead to sustained progress.

7. (C) Shannon said that the overall U.S. approach in Latin
America was to establish a positive agenda so that countries
would see that having a good relationship with the U.S. was
an advantage and would produce favorable results. He
explained that the four pillars of U.S. policy in Latin
America were consolidating democracy and its institutions,
working toward prosperity (including by linking existing free
trade agreements under the "Pathways to Prosperity"
initiative), investing in people, and security, which was
defined broadly as encompassing not only military issues but
also transnational issues such as environmental challenges
and other threats such as diseases. Shannon explained that
he expected broad continuity of U.S. policy toward Latin
America after the presidential election, and that the new
President would meet Latin American leaders at the Summit of
the Americas in April 2009. Shannon added that U.S.-ROK
cooperation on Latin America would be important to help
consolidate democratic and economic progress there.

8. (C) Over lunch, DG Doo explained that the ROKG had
approached the Cuban government several months ago to request
establishment of consular relations in the interest of
providing protection for the estimated 4,000 ROK tourists who
visit Cuba each year. Havana had not yet responded. Doo
also said that the ROKG had offered USD 100 thousand of
assistance to the Cuban government after the recent hurricane
damage, which was cheerfully accepted, albeit only after
being denominated in Euros at Havana's insistence. Deputy

SEOUL 00002177 004.5 OF 004


Director General Chun Hong-jo commented on difficulties
Korean companies faced when bidding against Chinese state
companies on projects in Latin America. Armed with full
state backing, he said, the Chinese companies inevitably
proposed more favorable terms.
STEPHENS

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