US embassy cable - 05LIMA3554

UNCLAS LIMA 003554 
 
SIPDIS 
 
SENSITIVE 
 
DEPT FOR WHA/AND, WHA/EPSC, EB/TPP/ABT 
TREASURY FOR OASIA/INL 
COMMERCE FOR 4331/MAC/WH/MCAMERON 
USDA FOR FAS/ITP/GRUNENDFELDER 
BANGKOK FOR TRADE OFFICER 
 
E.O. 12958: N/A 
TAGS: ETRD, ECON, EAGR, PGOV, PREL, PE 
SUBJECT: PERU RESUMES FTA NEGOTIATIONS WITH THAILAND 
 
REF: 04 LIMA 5481 
 
1.  (U) Summary.  After almost 10 months of delay, the GOP 
resumed free trade talks with Thailand on August 15.  During 
round six, held in Lima August 15-17, the GOP and GOT will 
negotiate chapters on market access, rules of origin, 
customs procedures and safeguards.  GOP officials view 
Thailand as a strategic trade partner in Asia and expect 
that an FTA with Thailand will open doors for future FTAs 
with other countries in the region.  End Summary. 
 
FTA Talks Resume 
---------------- 
 
2.  (U) Trade talks between Thailand and Peru began in 
January 2004 in Bangkok, with the fifth round held in Lima 
last November.  Although the GOP expected to complete the 
free trade agreement (FTA) by December, talks were stalled 
after the GOP instructed Ministry of Trade negotiators to 
focus on FTA negotiations with the United States. 
After a ten-month hiatus, the GOP, which states that U.S.- 
Andean FTA negotiations have advanced significantly, has 
turned its attention back to Thailand.  FTA negotiations, 
now on Round 6, will occur August 15-18 in Lima. 
 
3.  (U) The 15 member Thai delegation, led by lead 
negotiator Apiradi Tantraporn, will meet with GOP officials, 
led by lead negotiator Pablo de la Flor, to negotiate 
several FTA chapters, including market access, rules of 
origin and customs procedures, and safeguards.  The 
governments will not/not discuss the services or investment 
chapters. 
 
Why Thailand? 
------------- 
 
4.  (SBU)  The GOP continues to tweak its policy toward 
Asia, and several GOP officials have informed us that they 
believe the way into Asia - namely China - is through the 
smaller countries, such as Thailand and Singapore.  Thailand 
is Peru's largest trading partner in Southeast Asia; Peru 
exported over $30 million in goods to Thailand in 2004, 
which accounted for 0.2 percent of Peru's total exports. 
Principal products included zinc, copper, and fishmeal. 
Peru imported $9.8 billion in goods in 2004, 0.4 percent of 
which came from Thailand.  Imports included light trucks, 
manufactured goods such as ovens, microwaves, and 
refrigerators, and polyester thread/fabric. 
 
5.  (SBU) The GOP believes that an FTA with Thailand will 
benefit Peru's large agricultural sector.  Vice Minister of 
Trade Pablo de la Flor noted that exports of fruit (grapes), 
asparagus, onions, paprika, and coffee should increase under 
and FTA. 
 
Comment 
------- 
 
6.  (SBU) The GOP expects that an FTA with Thailand will 
enable Peru to improve its trade relationship with Asia, 
perhaps culminating with additional FTAs with other 
countries in the region.  Completing this FTA may be more 
difficult than the GOP realizes - negotiators must still 
tackle the agriculture chapter.  Rice will be a major issue, 
as the GOP refuses to grant Thailand duty-free access for 
rice.  As we have seen with the U.S.-Andean FTA, Peru's 
defensive position on sensitive agricultural products may be 
the limiting factor for future FTAs. 
 
STRUBLE