US embassy cable - 05LIMA4569

C O N F I D E N T I A L SECTION 01 OF 04 LIMA 004569 
 
SIPDIS 
 
DEPARTMENT PLEASE PASS TO USTR 
 
E.O. 12958: DECL: 10/20/2015 
TAGS: PREL, SNAR, ETRD, PHUM, PTER, PE 
SUBJECT: WHA/AND DIRECTOR'S MEETINGS ON BILATERAL 
RELATIONS, TRADE, NARCOTICS, AND HUMAN RIGHTS 
 
 
Classified By: Political Counselor Alexander Margulies.  Reason:  1.4(d 
). 
 
---------- 
SUMMARY 
---------- 
 
1.  (C)  In meetings with Foreign Ministry, congressional, 
economic, trade, counternarcotics, and human rights 
officials/activists on 10/17-18, visiting WHA/AND Director 
Philip French received a briefing on Peruvian views on 
bilateral relations (termed excellent, with a plug for a 
Toledo-POTUS meeting), Free Trade Agreement negotiations 
(Peru wants to sign ASAP, but pleads for more give/less take 
on agriculture), combating drugs (Peruvian officials want 
more funding), the human rights situation (the activists 
characterized the GOP's sins as those of omission, not 
commission), Venezuelan President Hugo Chavez (termed more an 
annoyance than a real threat), and domestic politics in an 
election year.  French also toured the new USAID-supported 
Commercial Courts.  END SUMMARY. 
 
---------------- 
THE PARTICIPANTS 
---------------- 
 
2.  (U)  During a hectic two days of meetings/lunches in Lima 
on 10/17-18, WHA/AND Director Philip French met with: 
 
--  leading presidential contenders Alan Garcia and Lourdes 
Flores (Septel); 
 
--  Foreign Ministry officials:  Under Secretary for the 
Americas Pablo Portugal, Director of North American Affairs 
Nestor Popolizio, Director of Narcotics Affairs Dora Salazar, 
Director of Economic Affairs Gonzalo Gutierrez, and Deputy 
Director of Defense and Security Affairs Carlos Yrigoyen; 
 
--  anti-narcotics officials:  National Drug Agency (DEVIDA) 
Senior Advisor Alfredo Barreto, DEVIDA officer Jorge 
Valencia, National Police Anti-Narcotics Directorate 
(DIRANDRO) commander Gen. Carlos Olivo, Interior Ministry 
Executive Office of Drug Control (OFECOD) Director Gen. Jorge 
Alvarez, and anti-drug NGO CEDRO Director Alejandro 
Vassilaqui; 
 
--  economic/trade officials:  Minister of Production David 
Lemor, Vice Minister of Agriculture Julio Escudero, FTA 
Agriculture negotiator Julio Paz, and Trade Ministry 
(MINCETUR) FTA coordinator Eduardo Ferreyros. 
 
--  Congressmen Antero Flores-Araoz (Unidad Nacional) and 
Luis Iberico (Independent Moralizing Front - FIM); 
 
--  human rights activists:  Alejandro Silva of the Human 
Rights Coordinator (an umbrella organization for human rights 
NGOs), Ivonne Macassi of IDEPUEP (the Catholic University's 
human rights division), and Jorge Ramirez, Director of the 
Afro-Peruvian Association; and 
 
--  Commercial Court judges. 
 
------------------- 
BILATERAL RELATIONS 
------------------- 
 
3.  (C)  The Foreign Ministry officials highlighted the 
"excellent" state of bilateral relations, pointing to 
advances in counternarcotics and counterterrorism cooperation 
through the CNIES agreement and ongoing coca eradication that 
should surpass the hectarage goals for the year.  U/S 
Portugal noted that Peru will assume a seat on the UN 
Security Council for 2006-2007, and looks forward to 
cooperating with the U.S. on terrorism and other security 
issues.  He also repeatedly urged a positive response to 
President Alejandro Toledo's request to meet with President 
Bush, indicating that Toledo would like to raise the FTA 
negotiations from the technical to the "political level." 
 
4.  (C)  WHA/AND French stressed that Latin America remains a 
priority for President Bush, who has instructed the State 
Department to focus on strengthening democratic institutions 
and promote economic growth/poverty reduction in the 
hemisphere.  He noted that the U.S. views Peru as a partner 
in these efforts, as well as in combating populism and 
ensuring regional security in the Andes.  The Foreign 
Ministry officials agreed with this assessment, citing it in 
support for their argument that Peru's large rural population 
(1/3 of the total) makes FTA agricultural issues into 
social/political stability issues as well, and thus there 
should be more give/less take on agricultural matters from 
U.S. negotiators.  They added that it was important for 
regional stability that the U.S. keep the door open for 
Ecuador and Bolivia to join the U.S.-Andean FTA. 
 
------------------------ 
THE FREE TRADE AGREEMENT 
------------------------ 
 
5.  (C)  The economic/trade officials urged for a rapid 
conclusion to the FTA negotiations.  Production Minister 
Lemor emphasized that Peru is ready to wrap up talks on the 
most difficult issue, agriculture, and would like to 
negotiate with AUSTR Al Johnson's replacement to close that 
chapter by next month.  MINCETUR FTA Coordinator Ferreyros 
said that Peru and Colombia are working well together, but 
that Ecuador is slowing the two down on Intellectual Property 
issues, notably data protection.  He did not/not expect, 
however, that Ecuador's position would prove a hindrance to 
Peru and Colombia moving forward. 
 
 
6.  (C)  Regarding timing for an FTA vote in Peru's Congress, 
Lemor indicated that the GOP has three options: 
 
--  seek a vote before the April 2006 general elections; 
--  present the agreement after the elections, but before the 
next government takes office on 7/28/05; or 
--  leave it to the next Government, 
 
indicating that he favored the second option.  Congressmen 
Flores-Araoz and Iberico, in their meeting with WHA/AND 
French, stated that submitting the FTA to Congress in 
late-May/early June, after the second round of presidential 
elections, would be optimal to ensure that the FTA avoids 
being caught up in the electoral turmoil. 
 
7.  (C)  The Peruvian economic/trade team were concerned 
about declining public support for the FTA, down from over 70 
percent earlier this year to 51 percent in the most recent 
poll.  MINCETUR's Ferreyros stated that his ministry has 
hired an outside consultant (noted journalist Cesar Campos) 
to help promote the accord and refute the scare-tactic 
arguments of FTA opponents.  He explained that the campaign 
will consist largely of radio and TV spots, primarily outside 
of Lima.  Production Minister Lemor added that private sector 
associations are also organizing a pro-FTA publicity 
campaign.  He warned that Peru's Congress will be subject to 
the winds of public opinion as the election season 
progresses. 
----------------------- 
COUNTERNARCOTICS ISSUES 
----------------------- 
 
8.  (C)  Foreign Ministry and counternarcotics officials both 
repeatedly pleaded for more money, decrying the planned 
reduction in USG CN funding for Peru, particularly as CN 
funding will remain steady for Colombia.  WHA/AND French 
explained that the budget situation was unlikely to improve, 
given competing CN demands from Iraq and Afghanistan, as well 
as Hurricane Katrina relief, and that both the Peruvians and 
the USG need to explore ways to use existing resources more 
efficiently.  Items of note raised by the anti-narcotics 
officials during the discussions included: 
 
--  new DIRANDRO commander Gen. Olivo acknowledging the lack 
of inter-agency coordination, as he noted that this was the 
first time he had met with DEVIDA (the agency responsible for 
intra-governmental coordination) since taking office two 
months ago; 
 
--  Gen. Olivo's admission that he has no/no funding to 
implement the new precursor chemical law; 
 
--  traditional use of coca is an untouchable issue, with one 
million dedicated and three million occasional users; 
--  cocaine use is increasing (polls indicate eight percent 
of the population have tried cocaine or PCB at least once); 
 
--  coca leaf production per hectare is increasing, from 1.2 
tons to up to three tons per hectare; and 
 
--  the radicalization of cocalero movements requires a 
larger police presence to protect eradicators. 
 
------------ 
HUMAN RIGHTS 
------------ 
 
9.  (C)  The human rights activists praised the Toledo 
Administration for its positive approach to human rights, but 
faulted the Government for failing to implement the 
recommendations of the Truth and Reconciliation Commission, 
to resolve the problems of prison overcrowding, to 
successfully prosecute military and police officials accused 
of committing human rights offenses, or to come up with a 
formula that ensures that local communities' interests and 
participation are included in the design and implementation 
of mining projects.  They agreed that the GOP's sins were 
primarily those of omission, not commission.  Silva and 
Macassi criticized what they say as insufficient political 
will to confront seriously the country's human rights 
problems, but Ramirez gave a spirited defense of the Toledo 
Government's improvements in human rights legislation. 
 
----------- 
HUGO CHAVEZ 
----------- 
 
10.  (C)  In his meeting with Foreign Ministry officials, 
WHA/AND French raised the issue of Venezuelan President Hugo 
Chavez' regional destabilization efforts, asking whether the 
GOP believed Chavez was attempting to extend his Bolivarian 
Revolution to Peru?  The Peruvians vehemently rejected this 
possibility, claiming that Chavez believes that the 
hemisphere is divided into separate axis, and that Peru and 
Colombia are part of the "Monroevian Axis."  They 
acknowledged Chavez's support for destabilizing elements in 
Peru, Ecuador and especially Bolivia, but opined that in the 
case of Peru his interference was more an annoyance than a 
threat.  Engagement, they argued, was the proper tactic to 
take with Chavez, not isolation.  WHA/AND French agreed with 
this assessment, explaining that while the USG's policy was 
to engage with the GOV, it could not ignore Chavez's 
continued anti-U.S. comments or his interference in the 
internal affairs of other countries. 
 
----------------- 
DOMESTIC POLITICS 
----------------- 
 
11.  (C)  Congressmen Flores-Araoz and Iberico were upbeat 
about domestic political stability, although they observed 
that in an election year there were only limited 
opportunities for legislative action.  Flores-Araoz, who 
heads the Constitutional Affairs Committee (and served as 
Congress President in 2004-2005) said that the current 
Congress should pass legislation aimed at creating a 
professional civil service, along with some last minute 
electoral code reforms, "and nothing else."  Iberico, who 
heads the Defense Committee, indicated that he is in no/no 
hurry to pass a draft coca law in an election year, and will 
be holding extended hearings on the bill.  They were both 
highly critical of attempts by the Constitutional Tribunal to 
extend its jurisdiction to appeals from National Electoral 
Board (JNE) decisions (the Constitution itself states that 
JNE decisions are final) and of anti-system NGOs that receive 
funding from the U.S. and other democracies. 
 
----------------- 
COMMERCIAL COURTS 
----------------- 
 
12.  (U)  Commercial Court Chief Judge Julio Wong provided a 
tour of the new Commercial Courts facilities, highlighted by 
interviews with commercial judges and a demonstration of the 
Court's webpage, which will incorporate all rulings, thereby 
maximizing transparency and creating a record of 
jurisprudence that will serve as legal precedent.  The 
Commercial Courts began functioning in April 2005, supported 
by USD 2.4 million in USAID technical, training and equipment 
assistance.  There currently are 15 commercial judges (five 
more are planned).  Since commencing operations, the 
commercial judges have reduced the processing time for 
handling a case at the trial level from two years to 2-3 
months, with the appellate process reduced from an addition 
1-2 years to 2-3 months.  According to Wong, litigants have a 
higher acceptance rate of the Commercial Courts' decisions, 
with only about 10 percent of cases appealed to the next 
highest level, whereas in other civil cases some 80 percent 
of decisions are appealed.  The banking sector is 
particularly pleased with the Courts' operations, he added, 
with banks offering to pay higher court fees in order to 
assure the sustainability of the system.  Furthermore, Wong 
concluded, the Judicial Branch leadership strongly supports 
the Commercial Courts, holding them forth as an example that 
judicial reform can succeed in Peru during its current 
lobbying efforts in Congress to secure a higher budget 
allocation. 
 
---------- 
COMMENT 
---------- 
 
13.  (C)  WHA/AND French's visit was very useful in providing 
Peruvian government officials with a Washington perspective 
on the FTA negotiations and limiting factors on future 
counternarcotics funding.  Our interlocutors, in turn, 
provided a bird's-eye view of the GOP's priorities and 
prospects as the Toledo regime winds down and election 
campaigning heats up.  END COMMENT. 
STRUBLE