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Cablegate: Chile has Low Expectations for Wto Hong Kong

VZCZCXYZ0000
PP RUEHWEB

DE RUEHSG #2441/01 3352022
ZNR UUUUU ZZH
P 012022Z DEC 05
FM AMEMBASSY SANTIAGO
TO RUEHC/SECSTATE WASHDC PRIORITY 7966
INFO RUEHAC/AMEMBASSY ASUNCION PRIORITY 2425
RUEHBR/AMEMBASSY BRASILIA PRIORITY 2978
RUEHBU/AMEMBASSY BUENOS AIRES PRIORITY 2795
RUEHPE/AMEMBASSY LIMA PRIORITY 4359
RUEHMN/AMEMBASSY MONTEVIDEO PRIORITY 3119
RUEHNE/AMEMBASSY NEW DELHI PRIORITY 0084
RUEHKO/AMEMBASSY TOKYO PRIORITY 0192
RUEHHK/AMCONSUL HONG KONG PRIORITY 0054
RUEHGV/USMISSION GENEVA PRIORITY 0467
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEHRC/DEPT OF AGRICULTURE WASHDC PRIORITY

UNCLAS SANTIAGO 002441

SIPDIS

SENSITIVE
SIPDIS

STATE FOR EB/TPP/IPE FOR SUSAN WILSON
STATE PLEASE PASS TO USTR
USDA FOR FAS/ITP/JHURST AND FAS/ITP/KKEZAR
COMMERCE FOR SARA MCDOWELL
GENEVA FOR USTR

E.O. 12958: N/A
TAGS: EAGR ECON ETRD KIRC KPAO WTO CI
SUBJECT: CHILE HAS LOW EXPECTATIONS FOR WTO HONG KONG
MINISTERIAL

REF: STATE 211956

1. (SBU) Summary. Top Chilean trade officials do not see a
clear sense of direction among WTO members and see no
action-causing event at or beyond Hong Kong that would lead
to the successful conclusion of the Doha round in 2006. They
are worried about the long-term health of the WTO and would
regret seeing its role decline. However, Chile feels it is
well positioned through its web of trade agreements to
continue its own export-led growth. On agricultural reform,
Chile's position is that the EU must improve its offer. End
Summary.

2. (SBU) Senior econoff met on November 29 separately with
Ambassador Carlos Furche, Director General of Economic
Affairs (DIRECON) at the Ministry of Foreign Affairs, and
with Pablo Furche, head of DIRECON's WTO department, to
discuss reftel from Under Secretary Shiner as well as Chile's
overall views on the challenges facing the WTO. (Note: Pablo
is the son of Ambassador Furche. He is a career civil
servant and not a political appointee. End Note.) Ambassador
Furche said Chile had "very, very low expectations" ahead of
the December 13-18 WTO Hong Kong Ministerial. He said the
most worrying aspect of the upcoming talks was the absence of
a sense of direction among WTO members. It was clear that
members were preparing themselves for a lack of progress in
Hong Kong, and Furche was in favor of lowering expectations
if that reflected reality. Moreover, what was missing was a
plan on how to move the Doha round forward in 2006.
Ambassador Furche felt WTO members were so busy managing down
expectations for Hong Kong that they were failing to think
beyond it. As a result, he doubted the Doha round could be
successfully concluded in 2006.

3. (SBU) Pablo Furche said the GOC expected progress in Hong
Kong in areas that would matter for developing countries. He
mentioned the possibility of a new agreement on cotton and a
TRIPs and public health waiver for LDCs as progress that
could be made. Pablo said the GOC did not want Hong Kong to
end without any successes. Despite the likely lack of
progress on agricultural reform, Chile did not want to see
other ambitious reform efforts of the Doha round ignored. He
agreed with Ambassador Furche that what was needed out of
Hong Kong was a clear political indication of next steps for
the WTO.

4. (SBU) On agricultural reform, Pablo said the ball was
clearly in the EU's court. The GOC felt that the overall EU
bargaining position was not realistic. He cited a lack of
balance in the EU proposals on agriculture, services and
NAMA. Chile definitely wanted an end to export subsidies in
agriculture but had a more nuanced position on domestic
subsidies with an acknowledgment of political considerations
in some EU countries. Pablo said Chile had made its policy
positions clear to the EU through the G-20 and the Cairns
Group. In addition, he said the GOC had gathered all of the
EU ambassadors resident in Santiago for a mid-November
meeting to express to them collectively that Chile expected
further flexibility in the EU offer on agricultural reform.
Pablo said the EU ambassadors told the GOC that the current
offer was already as far as the EU could go.

5. (SBU) Pablo said that failure to conclude successfully the
Doha round in 2006 could leave the WTO as nothing more than a
discussion forum. He felt this could have implications for a
small country such as Chile, which would then face a much
harder time getting its voice heard internationally. He also
said that the failure of the Doha round might negatively
affect the entire WTO dispute resolution mechanism. That
being said, he and Ambassador Furche both felt that through
its web of trade agreements Chile was well protected from the
ramifications of the failure of the Doha round. (Note: Chile
has 17 trade agreements in place, recently signed one with
China and plans to begin free trade negotiations with both

Japan and India in 2006. End Note.) Both felt Chile had done
a remarkable job of securing bilateral access to its most
important markets. While Chile did not want the role of the
WTO to decline, both Furches said Chile's export-led growth
was well prepared to survive this eventuality through its
bilateral agreements.

6. (SBU) Comment. These trade officials are among the leaders
in defining Chile's overall trade posture and in particular
its positions in the WTO. They believe that Chile has
already secured access to many of its most important markets,
with or without the successful conclusion of the Doha round.
There are no signs that Chile intends to stop expanding its
web of bilateral trade agreements, with Japan and India next
on the agenda. Chile is hesitant to play more of a
leadership role in the WTO context, however, it does actively
participate in the G-20 and Cairns Group.
YAMAUCHI

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