Cablegate: Trade Envoy de Soto Discusses Ptpa Strategy

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DE RUEHPE #3385/01 2371529
ZNR UUUUU ZZH
R 251529Z AUG 06
FM AMEMBASSY LIMA
TO RUEHC/SECSTATE WASHDC 2014
INFO RUEHBO/AMEMBASSY BOGOTA 3814
RUEHBU/AMEMBASSY BUENOS AIRES 2556
RUEHCV/AMEMBASSY CARACAS 9738
RUEHQT/AMEMBASSY QUITO 0636
RUEHLP/AMEMBASSY LA PAZ AUG SANTIAGO 0808
RUEHGV/USMISSION GENEVA 0463
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC

UNCLAS LIMA 003385

SIPDIS

SENSITIVE
SIPDIS

DEPT FOR WHA/AND, WHA/EPSC, EB/OMA, EB/TPP
COMMERCE FOR 4331/MAC/WH/MCAMERON
USTR FOR EEISSENSTAT AND BHARMAN
GENEVA FOR USTR

E.O. 12958: N/A
TAGS: ETRD ECON EINV PGOV PREL PE
SUBJECT: TRADE ENVOY DE SOTO DISCUSSES PTPA STRATEGY

REF: LIMA 3316 AND PREVIOUS

1. (SBU) Summary: Hernando de Soto, President Garcia's recently
named Personal Representative for the U.S.-Peru Trade Promotion
Agreement (PTPA), told the Ambassador on August 22 that he would
develop a plan of activities to promote U.S. Congressional passage
of the PTPA before traveling to the U.S. for a few weeks o/a
September 10. He stressed the need to develop a fallback position
in case the U.S. Congress voted against the agreement, and asked
what the prospects would be for ATPDEA extension in that case. The
Ambassador replied that a negative vote would make ATPDEA extension
hopeless, so the GOP should put all its eggs in the approval basket.
De Soto said he would coordinate his strategy closely with GOP
ministries, the previous Toledo administration's trade team, and USG
officials to ensure maximum effectiveness. The Ambassador advised
De Soto to establish regular contact with USTR and its legislative
affairs office. De Soto will meet with A/USTR Everett Eissenstat
during his August 30-September 1 visit to Lima, and with House Ways
and Means Committee staff member Angela Ellard on August 24. End
Summary.

2. (SBU) Ambassador met with Hernando de Soto, President Garcia's
personal representative for the U.S.-Peru Trade Promotion Agreement
(PTPA), on August 22 to discuss De Soto's plans for taking up his
new responsibilities (see REFTEL). De Soto said that President
Garcia had taken it for granted that President Toledo would nail
down U.S. ratification of the PTPA before Toledo left office, and
had absolutely no contingency plan for lobbying Washington. De Soto
plans to devote himself between now and September 10 to "drawing a
map" of activities he will undertake to promote U.S. Congressional
passage of the PTPA.

3. (SBU) De Soto knew that President Toledo had innocently put
himself in the middle of a U.S. partisan dispute on labor standards
in FTAs, and said he would work to avoid such missteps. He said he
would welcome pointers from U.S. officials. The Ambassador said
that the most important piece of advice he could offer was that De
Soto should coordinate as closely as possible with USTR and its
legislative affairs people. De Soto plans to consult with GOP
ministries, the previous Toledo administration's team and USG
officials so that he can pick up where the outgoing government left
off and "avoid traps along the way." Given the suddenness of his
appointment, De Soto has not even had a chance to be briefed by key
people like former Ambassador to Washington Eduardo Ferrero.

4. (SBU) De Soto said that he planned to moderate the GOP's public
statements of confidence about PTPA approval by the U.S. Congress.
Both former President Toledo and Ambassador Ferrero had publicly
said that everything was set up and the new government only needed
to give a little push to win approval. De Soto knows there are a
lot of uncertainties on timing and that nothing should be taken for
granted. The Ambassador said he would be careful not to contradict
De Soto, but suggested De Soto avoid being too pessimistic lest it
feed back in an unhelpful way to the U.S. De Soto was concerned
about developing a fallback position in case the U.S. Congress votes
down the PTPA, and asked what the prospects would be for ATPDEA
extension if that happened. The Ambassador told De Soto he should
assume that a negative vote would also mean ATPDEA extension would
be hopeless. The Ambassador recommended that since Peru only gets
one shot at this in the U.S. Congress, the GOP should put all its
eggs in the approval basket.

5. (SBU) De Soto plans to send staff ahead to Washington to prepare
the ground, including Ambassador Jorge Valdez, on loan from the MFA
as the Director of International Affairs at De Soto's Institute for
Liberty and Democracy (ILD), and ILD Finance Director Alfonso
Grados. De Soto also hopes to recruit former Trade Vice Minister
and PTPA negotiator Pablo de la Flor, who he noted came out of ILD.
(Note: De la Flor, who is well-known to Washington trade officials,
told Ambassador later in the day that he would like to help De Soto
but doesn't know if he can because he just accepted a job with Booz
Allen Hamilton. End Note.) De Soto has previously planned
commitments in Washington on September 10 (to review ILD initiatives
with a couple of U.S. senators) and in New York from September 20-22
(to participate in the Clinton Global Initiative). He plans on
spending the weeks in between in the U.S., working the Congress and
others.

6. (SBU) De Soto had seen materials from one of the U.S. lobbying
firms contracted by the GOP and said it looked liked they knew what
they were doing. The Ambassador said that he had heard from
Washington contacts that Peru's team was pretty good, and noted that
with so much turnover in Peru's Trade Ministry and Washington
Embassy, De Soto would probably find it useful to have some
continuity. De Soto agreed. De Soto will meet with A/USTR Everett
Eissenstat during his August 30-September 1 visit to Lima. He will
also see Ways and Means staffer Angela Ellard, who is on vacation in
Peru, on August 24.

7. (SBU) When asked why he took on this new challenge, De Soto told
the Ambassador that he had conversed with President Garcia a number
of times before the election about his "TLC adentro" ("internal
FTA") ideas--proposals to allow more businesses and producers to
participate in international commerce (see REFTEL and
http://www.ild.org.pe/pdf/TLC_Interno-Peru.pd f). Garcia's offer of
the special envoy position caught De Soto by surprise and was
hastily finalized. Garcia had offered De Soto other GOP positions,
but De Soto said he turned them down because he had spent years
building his and ILD's reputation and influence, and it was
important that he spend that capital carefully. He did not want to
have an appointment that would identify him too broadly with the
government, pulling ILD into issues outside of its range. The big
draw of this position for De Soto is that the inward-focused,
"internal FTA" element matches the reform agenda that ILD promotes
globally. De Soto already has some initiatives lined up for his
"internal FTA" plan, and plans to start rolling them out in
September.

STRUBLE

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