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Cablegate: Chilean Leadership to Departing Ambassador:

VZCZCXYZ0034
PP RUEHWEB

DE RUEHSG #1164/01 2051346
ZNY CCCCC ZZH
P 241346Z JUL 07
FM AMEMBASSY SANTIAGO
TO RUEHC/SECSTATE WASHDC PRIORITY 1835
INFO RUEHBO/AMEMBASSY BOGOTA 1781
RUEHBU/AMEMBASSY BUENOS AIRES 0421
RUEHCV/AMEMBASSY CARACAS 1472
RUEHLP/AMEMBASSY LA PAZ JUL LIMA 5173
RUEHME/AMEMBASSY MEXICO 1154
RUEHOT/AMEMBASSY OTTAWA 0521
RUEHQT/AMEMBASSY QUITO 1731
RUEAIIA/CIA WASHDC
RHMFISS/HQ USSOUTHCOM MIAMI FL
RUEKJCS/JOINT STAFF WASHDC
RUEKJCS/SECDEF WASHDC

C O N F I D E N T I A L SANTIAGO 001164

SIPDIS

SIPDIS

FROM THE AMBASSADOR

E.O. 12958: DECL: 07/23/2017
TAGS: ECON ETRD PGOV PREL CI
SUBJECT: CHILEAN LEADERSHIP TO DEPARTING AMBASSADOR:
RELATIONSHIP ON RIGHT TRACK, WITH FOCUS ON THE FUTURE

Classified By: Ambassador Craig A. Kelly Reasons: 1.4 (b and d)

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Summary
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1. (C) President Bachelet, FM Foxley and Interior Minister Velasco, in farewell meetings with the Ambassador, expressed enthusiasm about our bilateral partnership on the ""themes of the future,"" like science, technology, innovation, energy and education. Bachelet acknowledged that Chile is doing more than it has in the past to lead in the region, and the Ambassador assured her that this effort enjoyed strong U.S. support. Bachelet said she would weigh in again with the U.S. Congress to support ratification of the FTAs with Panama, Colombia and Peru, and noted that she enjoys excellent relations with center-right Latin leaders like Presidents Uribe and Calderon. Ambassador also discussed free trade with Bachelet and visiting Canadian PM Harper.
End Summary.

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Bachelet Upbeat on U.S.-Chile Ties
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2. (C) On July 18, the Ambassador attended President Bachelet's dinner in honor of Canadian PM Harper at La Moneda. Afterwards, he spoke with Bachelet and Harper for about twenty minutes. Bachelet was in good spirits despite having suffered hours earlier a political defeat in the Senate regarding government appointments to the National TV board. She joked briefly about the setback and then turned immediately to regional issues. Bachelet clearly hit it off with Harper and noted that she enjoyed excellent rapport with key center-right leaders in Latin America, including Presidents Uribe and Calderon - ""even though I am of the left,"" she added with a laugh.

3. (C) Harper, alluding to his speech earlier in the day about a ""Canadian way"" in relations with Latin America, said that he was trying to add a new voice in support of free trade and against populism. (Separately, his staff told me Harper was in no way trying to pose a ""third way in opposition to the United States."") Bachelet welcomed the remarks and told Harper that she was strongly supporting U.S. ratification of the FTAs with Panama, Colombia and Peru.

4. (SBU) The next day, the Ambassador paid a departure courtesy call on Bachelet, who was joined by FM Foxley and foreign policy advisor Marcos Robledo. Bachelet again was upbeat, and expressed happiness over the state of U.S.-Chile relations. She said she found her meetings with Under Secretary Burns and Treasury Secretary Paulson very useful, and applauded our focus on cooperation with Chile in the ""new sectors"" science, technology, innovation, energy, and education. She welcomed discussions toward a major new education exchange agreement. The Ambassador reviewed the latest programs we had conducted at the American Academy of Science and Technology in Santiago, and the President said that was exactly the sort of thing we need to emphasize.

5. (C) Bachelet said that Chile is becoming less shy about talking about how its economic path has worked, and reviewed actions the GOC is taking to promote free markets in Central America, the Caribbean and the Andes. Chile is also putting great stock in its relation with Mexico. She noted, however, that Brazil and Argentina tend to find Chile ""too small"" to provide a useful model. The Ambassador commented that globalization meant that innovation and good policies count for a lot, regardless of population size, and that Chile is showing that it can compete at the level of the world's tiger economies. Washington has noted that Chile is in fact doing more to lead in the region and we strongly support that effort. The U.S. wants to be a partner and friend of Chile as it makes the next step in its economic development. We have a lot to offer in terms of cooperation in cutting edge technology. Bachelet called such cooperation vital for Chile.

6. (C) Bachelet, referring to Harper's speech the previous day, echoed Harper's staff in saying that the Canadian press had exaggerated the ""alternative to the U.S."" angle. She said parts of the speech were clearly for domestic consumption and added that Harper was looking forward to meeting with President Bush in Canada.

7. (C) Turning to the issue of U.S. ratification of the FTAs with Panama, Colombia and Peru, Bachelet recalled her phone call and letter to Speaker Pelosi on the FTAs, and said, ""I will do more, I assure you."" The Ambassador reiterated the President's determination to fight for ratification, and added that success would mean that all nations on the Pacific rim of the hemisphere except Ecuador would have FTAs with the United States. Bachelet said, ""Yes, and we should not give up on Ecuador. We may have to call it something other than an FTA.""

8. (C) Finally, Bachelet expressed concern about the membership moratorium in APEC, citing that by including more Pacific Rim Latin countries, we could give a great boost to free trade in our hemisphere. She lamented the tendency of Latin American intellectuals, politicians and journalists to pigeon-hole people politically and then ""disqualify"" them. We need to be more pragmatic.""

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Interior Minister Velasco
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9. (C) In a July 19 departure call, the Ambassador thanked Velasco for the excellent cooperation in law enforcement, including efforts against terrorism, drug trafficking, money laundering, trafficking in persons and other crimes. Velasco said it was vital for the two countries to keep working together. Chile was not blind to the risk that its relative prosperity was attracting more bad actors.

10. (SBU) Velasco welcomed the U.S. emphasis on science and technology cooperation. ""We need this badly,"" he said. But with characteristic bluntness, Velasco expressed skepticism about the ability of Chile to transform itself soon into an innovative, risk-taking society. He acknowledged that the country's largely commodities-based export success had reinforced Chile's natural tendency toward conservatism in business.

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FM Foxley
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11. (SBU) In a July 20 private meeting before a going-away lunch, Foxley echoed Bachelet's satisfaction with the bilateral relationship, and said he was pleased with progress toward the academic exchange agreement. He would also like to explore one-year fellowships in the United States for Chilean academics, in large part to immerse influential Chileans ""in the vibrant reality of American democracy.""

12. (C) The Ambassador commented that each time he saw President Bachelet, he found her a bit more enthusiastic about the ""Pacific Arc""/free-trade/innovation focus that Foxley has been promoting since the beginning of the administration. Foxley said that is undoubtedly true. It is a slow process, he added, and Bachelet remains reluctant to criticize Hugo Chavez and Fidel Castro, but she is more and more convinced that Chile has a role to play in showing that the Chilean path to democracy and prosperity is worth emulation in the hemisphere. And farther afield, noted the Ambassador -- referring to U/S Burns' recent discussions in Santiago on global issues. Exactly, said Foxley.

13. (U) Subsequently, Foxley hosted a farewell lunch with about 50 guests, including press, and in his toast referred enthusiastically to the strength of U.S. democracy and the success of the U.S.-Chile relationship, especially in the new themes"" of science, innovation and education.

KELLY

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