US embassy cable - 05LIMA2061

C O N F I D E N T I A L SECTION 01 OF 02 LIMA 002061 
 
SIPDIS 
 
E.O. 12958: DECL: 05/05/2015 
TAGS: PREL, PE, CI 
SUBJECT: PERU REJECTS CHILE'S RESPONSE ON ARMS SHIPMENTS TO 
ECUADOR, SUSPENDS BILATERAL MEETINGS AND FREE TRADE TALKS 
 
REF: A. LIMA 2054 
     B. LIMA 2018 
     C. LIMA 1987 
     D. LIMA 1480 
 
Classified By: Political Counselor Alexander Margulies.  Reason:  1.4(d 
). 
 
1.  (C)  SUMMARY:  Prime Minister Carlos Ferrero announced at 
a 5/3 press conference that the GOP considered "completely 
unsatisfactory" the Chilean Government's response to Peru's 
diplomatic note protesting Chile's 1995 arms deliveries to 
Ecuador (Ref A).  Consequently, Ferrero continued, Peru was 
suspending the planned 2x2 meeting of Foreign and Defense 
Ministers scheduled for 5/16, as well as the commencement of 
free trade negotiations with its southern neighbor, while 
maintaining its commitment to positive bilateral relations. 
Former President Alberto Fujimori told a local radio station 
that his government had treated the matter "with reserve" to 
avoid upsetting peace negotiations with Ecuador and claimed 
that Toledo was raising this issue as a smokescreen to 
distract public attention from the congressional 
investigation into allegations that President Alejandro 
Toledo's party forged signatures to register for the 2000 
elections.  The Chilean and Ecuadorian DCM's both opined to 
DCM on 5/4, that they thought the GOP was using the arms 
shipment issue as a smokescreen.  Whatever the motive, Peru's 
aggressive public stance has painted it into a corner, and it 
will likely be some time before its bilateral relations with 
Chile can move forward.  END SUMMARY. 
 
2.  (U)  According to Ferrero, Peru "hoped for explicit 
apologies from Chile for what had happened," although it did 
not/not make this explicit in its diplomatic note protesting 
Chile's actions (Ref B).  The Chilean diplomatic note in 
response, and subsequent comments by Chilean Minister 
Secretary General of the Presidency Francisco Vidal, 
 
SIPDIS 
expressed the GOC's "profound unhappiness" with the Peruvian 
note; treated the arms delivered to Ecuador as a closed issue 
that was resolved ten years ago; termed Peru's questioning of 
its good faith as a guarantor of the 1942 Rio Protocol as 
"unacceptable;" and questioned the GOP's public announcement 
of its note before the latter was delivered to the Chilean 
Ambassador in Lima.  Ferrero reiterated that the Peruvian 
Government did not/not consider the issue to be closed, 
believed that the declarations by former Ecuadorian military 
commander Gen. Victor Bayas provided new evidence justifying 
a fresh look at the case (Ref C), and claimed that the GOP 
had a duty to inform its citizens of its actions in this 
matter before it transmitted its point of view to Chile. 
 
3.  (U)  Ex-President Fujimori, in a 5/4 broadcast sent from 
Japan to his local radio show "The Chinaman's Hour" (although 
of Japanese descent, Fujimori's nickname is "El Chino"), 
stated that his government had treated the Chilean arms 
deliveries to Ecuador "with caution and reserve" so as 
not/not to upset the delicate peace negotiations with 
Ecuador.  He explained that Peru was concerned that if it 
confronted Chile openly, that country, as a guarantor of the 
1942 Rio Protocol, would side with Ecuador, but that handling 
the issue privately would help ensure Chile's neutrality. 
Fujimori then accused the Toledo Government of using the arms 
deliveries as a smokescreen to divert attention from the 
false signatures scandal (Ref A). 
 
4.  (C)  Chilean DCM Hernan Mena and Ecuadorian DCM Galo 
Yepez, at a 5/4 dinner hosted by the DCM, also opined that 
President Toledo and Prime Minister Ferrero were using the 
arms shipments as a smokescreen to divert attention away from 
the regime's scandals.  Yepez noted that Argentina also sold 
Ecuador arms during the 1995 border conflict, but that no 
mention has been made of this by the GOP, although he 
acknowledged that Argentina, unlike Chile, was not/not a 
guarantor of the Rio Protocol.  Mena added that while Chile 
saw the GOP as being behind the arms shipment campaign, it 
believed that narco-kingpin Fernando Zevallos, owner of Aero 
Continente (Peru's largest airline until his Kingpin listing 
forced its closure) was the instigator of the press campaign 
against LAN Peru/LAN Chile over an in-flight video that had 
negative coverage of Lima (Refs C-D). 
 
5.  (C)  COMMENT:  The GOP, through its aggressive public 
stance, has painted itself into a corner on the issue of 
Chilean arms shipments to Ecuador.  While Ferrero and others 
maintain that Peru remains committed to maintaining good 
diplomatic relations with Chile, it will likely take some 
time for this latest bump in the road to subside and for 
high-level contacts to resume.  END COMMENT. 
STRUBLE