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Cablegate: Santiago Sept. 29 Media Report

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SUBJECT: Santiago Sept. 29 Media Report

Secretary of Commerce Gary Locke

--------------------------------------------- --------

1. At the opening of the Third Americas Competitiveness Forum
(ACF), Secretary of Commerce Gary Locke said the United States is
"committed to resisting the temptation" of applying protectionist
policies. "These kinds of policies might be well-intended, but
inevitably fail," said Locke. The Secretary also admitted that in
the economic crisis, "the market had failed," but added that the
solution does not lie in "eliminating elements, but rather on
improving them," concurring with President Bachelet, who in her
remarks stressed the need to "improve the role of the state and to
have better markets" (El Mercurio, 9/29).

2. Seven-page coverage of the ACF includes a photograph of
President Bachele, U.S. Ambassador Paul Simons, Chilean Minister of
Economy Hugo Lavados, Guatemalan President Alvaro Colom, and
Secretary of Commerce Gary Locke (Financial daily Diario
Financiero, 9/29).

3. The remarks at the opening of the ACF called on nations to
overcome the economic crisis and improve production and innovation.
Secretary Gary Locke and Minister Hugo Lavados opened the ACF that
attracted approximately 600 attendees. (Diario Financiero, 9/29).

4. In his remarks to the ministers of economy of the region,
Secretary Locke said his country would not resort to protectionist
measures to recover from the economic crisis. "The solution is not
found in closing borders," said Locke (Diario Financiero, 9/29).

5. To be competitive, economies must strike a balance between
their energy needs, the cost to produce that energy, and the level
of security these energy sources have to offer and to achieve this
it is necessary to have renewable energy sources and efficient
energy policies, said Energy Minister Marcelo Tokman in a panel on
the subject at the ACF. Tokman said that Chile learned the lesson
after an array of energy supply related to problems it faced in
2008, and that it must incorporate sustained non-traditional
renewable energy sources and apply energy efficiency practices.
Nancy Rayan of the California Public Policy Committee, agreed with
Tokman. She noted that the Obama administration had taken
California's expertise and technological advancement in this area
to apply nationwide (Diario Financiero, 9/29).

6. Chile and California strengthen ties: Governor Arnold
Scharzenegger livened up the first day of the forum by sending a
video where he apologized for not attending and praised Bachelet
"who is always thinking globally." In spite of not attending, the
governor sent a high-level delegation to the forum (Diario
Financiero, 9/29).

U.S.-Related News

---------------------------

7. Andres Oppenheimer comments on Congressman Jim DeMint's
objection to Arturo Valenzuela's nomination: "What Senator DeMint
is doing is cheap politics. I don't believe that DeMint, who has
never stood out for his concern about Latin American affairs, would

have blocked the nomination of officials for other areas of the
world that most congressmen consider more important.... If DeMint
wants to change Obama's policy in Honduras, he should try to gather
the votes in Congress to achieve this. Blocking Obama's
nominations is depriving the State Department of the human
resources and the political leverage that are necessary to face
crisis in the region. It is an irresponsible and stubborn
attitude" (El Mercurio, 9/29).

Honduras

--------------

8. Micheletti authorities raided and closed a radio and a
television station loyal to Zelaya. Over the past two months
Micheletti has also suspended the right to assembly, aborting any
possible demonstrations. He also "broke-off relations" with Brazil
and has given the latter country ten days to resolve Zelaya's
status. Honduras has also threatened to disavow the Brazilian
embassy and the diplomatic immunity of its personnel. "This does
not mean Mr. Zelaya will be put out on the street or that we will
enter the embassy," said Micheletti's Foreign Minister Carlos
Lopez. "It means that the diplomatic mission will be recognized as
a private office of a foreign government only," he explained. U.S.
Ambassador to the OAS Lewis Anselem criticized both Zelaya and
Micheletti. "The regime must handle the security with control and
prudence," adding that Zelaya should "stop behaving as if he were
the leading actor in an old movie." Chilean Foreign Minister
Mariano Fernandez labeled Micheletti's threats against the
Brazilian embassy "caveman" behavior (La Tercera, 9/29).

9. Chilean foreign minister: "What Micheletti is doing is damaging
Honduras, because it pits his country against the international
community where no one violates diplomatic immunity" (El Mercurio,
9/29)

10. Although the international community condemned Micheletti's
increasing radical stance, it has also criticized Zelaya. U.S.
Ambassador to the OAS Lewis Amselem said Zelaya's decision to
return to Honduras "does not serve the interest of his people or of
those who are trying to find a peaceful restoration of democratic
order in Honduras." The president of the Brazilian Congress,
Senator Jose Sarney, also criticized Zelaya, saying the Embassy
"cannot be used for another country's domestic affairs." "Brazil
cannot not offer (Zelaya) asylum, since he was ousted by a coup,"
said Sarney, but added, "what is happening now is an exaggeration
of the occupation of the embassy that has turned into a political
committee" (La Nacion, 9/29)

11. Chilean John Biehl was the only OAS official out of five that
landed in Tegucigalpa who was allowed to remain in the country.
The other four were deported. Soldiers were escorting all
officials back to an airplane, when Biehl was approached by a
colonel who told him he had instruction to give him the choice to
stay. Biehl was then escorted to his hotel and said he has been
able to do his work without further obstacles (Afternoon La
Segunda, 9/28)

Chile-Peru

---------------

12. At the OAS General Assembly yesterday, Peruvian Foreign
Minister Jose Garcia Belaunde stated his country's concern over an
"arms race" in the region and the need to sign a non-aggression
pact among South American counties. Peru began using the term "arms
race" a few months ago when it criticized Chile's military
acquisitions. Chile believes this is part a strategy related to its
border claims. President Bachelet responded that Chile is "content
with its status quo and is not in an arms race" and that rather
than a non-aggression pact, the goal should be to promote peace
"through cooperation and integration agreements (El Mercurio,
9/29).

13. In the context of Peru's demand for South American countries
to sign a non-aggression pact, Peruvian Defense Minister Rafael Rey
reiterated his "personal" request that Chile cancel the military
exercise it will conduct in the north with the United States,
Brazil, Argentina, and France. "The theory behind it (the
exercise) is that a country invades Chile from the north and United
Nations cannot persuade the aggressor to desist (the attack). That
is offensive for Peru," said Rey (El Mercurio, 9/29).
SIMONS

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