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Cablegate: Chilean Reaction to President Obama's Announcement On Tpp

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DE RUEHSG #1198/01 3441838
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R 101838Z DEC 09
FM AMEMBASSY SANTIAGO
TO RUEHC/SECSTATE WASHDC 0400
INFO RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHBD/AMEMBASSY BANDAR SERI BEGAWAN 0001
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RUEHBY/AMEMBASSY CANBERRA 0001
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RUEHKO/AMEMBASSY TOKYO 0004
RUEHME/AMEMBASSY MEXICO 0036
RUEHOT/AMEMBASSY OTTAWA
RUEHPE/AMEMBASSY LIMA
RUEHSG/AMEMBASSY SANTIAGO
RUEHWL/AMEMBASSY WELLINGTON

UNCLAS SANTIAGO 001198

SENSITIVE
SIPDIS
STATE PLEASE PASS TO USTR DBISBEE AND KKALUTKIEWICZ
STATE FOR WHA/EPSC, EEB/TPP/BTA, EEB/TPP/MTA
TREASURY FOR BLINDQUIST
COMMERCE FOR KMANN

E.O. 12958: N/A
TAGS: ETRD ECON CI
SUBJECT: CHILEAN REACTION TO PRESIDENT OBAMA'S ANNOUNCEMENT ON TPP

REF: STATE 117729

1. (SBU) SUMMARY: Rodrigo Contreras, Director for Bilateral
Relations at Chile's trade ministry equivalent (DIRECON) welcomed
President Obama's announcement on joining the Trans-Pacific
Partnership Agreement (TPP). He though TPP could bring order to
the mix of trade agreements in the Pacific region, and noted
interest from Canada, Mexico, and Japan in the TPP. Contreras
thought that Vietnam's participation in TPP discussions might be
complicated, citing its inexperience in trade negotiations. END
SUMMARY.

2. (U) In a December 2 meeting at the Chilean Ministry of Foreign
Affairs, General Directorate for International Economic Affairs
(DIRECON), E/Pol Counselor, Econoff, and Econ Specialist met with
Director Contreras, Manuel Jose Prieto, Head of the North America
Division, Sergio Valdes Araneda, Advisor for TPP in the Asia and
Oceania Department, and Jeff Peet, U.S. Desk Officer.

Negotiations Can Return Order to "Spaghetti Bowl"

3. (SBU) E/Pol Counselor relayed ref points to Contreras,
underlining the importance of President Obama's announcement, and
asking for Chile's views on TPP's future. Contreras said Chile had
carefully reviewed the President's speech and believes that the TPP
announcement is especially significant for Chile and the other
members of the P-4 (Brunei, Chile, New Zealand, and Singapore). He
admitted the negotiations to expand TPP to include the U.S.,
Australia, Peru, and Vietnam will be a challenge. Contreras was
optimistic, however, that this effort could eventually bring order
to the "spaghetti bowl" of trade agreements in the Asia Pacific.

4. (SBU) Contreras said that Canada and Mexico had expressed
interest in TPP. He noted Japan is "watching closely" as well.
Contreras speculated that if TPP successfully expands to 11
countries, the new agreement will consist of more than half the
members of the Asia-Pacific Economic Cooperation (APEC). He
implied that this could bring the region closer to a Free Trade
Area of the Asia-Pacific. Contreras emphasized that TPP can become
a profound agreement along the lines of the EU, given that all
eight possible members share a common approach to trade, and in
many cases share FTAs.

21st Century Template

5. (SBU) Contreras took note of the U.S.'s intent to use the TPP
negotiations to establish a framework for 21st Century trade
agreements. He said that many of the elements of interest
identified by the U.S. are already included in existing trade
agreements. Chile is prepared to examine those areas, but allowed
that the challenge will be reaching agreement on the details.

Next Meeting in Melbourne

6. (SBU) Contreras explained TPP members and aspirants will likely

meet in Melbourne, Australia in March 2010. Contreras said Chile
hopes Melbourne will establish the modalities for future
negotiation rounds. He emphasized it will be critical to extract
as many results from the March meeting as possible.

No Problems with Peru, Vietnam May Be Complicated

7. (SBU) E/Pol Counselor asked about Chile's working relations with
Peru and if they would affect TPP negotiations, given the recent
spat between the two countries over charges of espionage.
Contreras said these are "completely separate issues" and both
countries are working to put the problems behind them. He insisted
there is no friction on trade discussions at the working level
between Chile and Peru. Contreras noted that at the height of
recent tensions, the Chilean and Peruvian delegations interacted
amicably at the APEC Summit in Singapore.

8. (SBU) Contreras told E/Pol Counselor that TPP negotiations with
Vietnam might prove complicated. He explained that Chile is
currently negotiating a trade agreement with Vietnam. Contreras
opined that because Vietnam has relatively little experience with
FTAs, the process has been long and complex, in part because of
reluctance to commit to obligations for access for goods and
services. In addition, Vietnam is largely unfamiliar with the
non-trade chapters that are usually part of an FTA (e.g.,
environment).

Concerns About U.S. TPA and Colombia FTA

9. (SBU) Contreras admitted to E/Pol Counselor that Chile is
concerned about the difficulties that could result should the Obama
Administration pursue TPP negotiations without first securing Trade
Promotion Authority (TPA) from the U.S. Congress. E/Pol Counselor
explained the Obama Administration will consult with Congress as we
move forward on TPP. He noted that the Administration will also
work with Congress to move forward at an appropriate time on the
legacy FTAs with Colombia, Panama, and South Korea.

10. (SBU) Contreras noted that Chile continues to support a U.S.
FTA with Colombia. He explained that Chile favors the entry of
nations like Colombia and Costa Rica into APEC and TPP. Contreras
lamented the lack of a U.S. FTA with Colombia as a potential
impediment to optimizing trade flows in the hemisphere.
SIMONS

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