US embassy cable - 05SANTIAGO2441

UNCLAS SANTIAGO 002441 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EB/TPP/IPE FOR SUSAN WILSON 
STATE PLEASE PASS TO USTR 
USDA FOR FAS/ITP/JHURST AND FAS/ITP/KKEZAR 
COMMERCE FOR SARA MCDOWELL 
GENEVA FOR USTR 
 
E.O. 12958: N/A 
TAGS: EAGR, ECON, ETRD, KIRC, KPAO, WTO, CI 
SUBJECT: CHILE HAS LOW EXPECTATIONS FOR WTO HONG KONG 
MINISTERIAL 
 
REF: STATE 211956 
 
1. (SBU) Summary. Top Chilean trade officials do not see a 
clear sense of direction among WTO members and see no 
action-causing event at or beyond Hong Kong that would lead 
to the successful conclusion of the Doha round in 2006.  They 
are worried about the long-term health of the WTO and would 
regret seeing its role decline.  However, Chile feels it is 
well positioned through its web of trade agreements to 
continue its own export-led growth.  On agricultural reform, 
Chile's position is that the EU must improve its offer. End 
Summary. 
 
2. (SBU) Senior econoff met on November 29 separately with 
Ambassador Carlos Furche, Director General of Economic 
Affairs (DIRECON) at the Ministry of Foreign Affairs, and 
with Pablo Furche, head of DIRECON's WTO department, to 
discuss reftel from Under Secretary Shiner as well as Chile's 
overall views on the challenges facing the WTO. (Note: Pablo 
is the son of Ambassador Furche.  He is a career civil 
servant and not a political appointee. End Note.)  Ambassador 
Furche said Chile had "very, very low expectations" ahead of 
the December 13-18 WTO Hong Kong Ministerial.  He said the 
most worrying aspect of the upcoming talks was the absence of 
a sense of direction among WTO members.  It was clear that 
members were preparing themselves for a lack of progress in 
Hong Kong, and Furche was in favor of lowering expectations 
if that reflected reality.  Moreover, what was missing was a 
plan on how to move the Doha round forward in 2006. 
Ambassador Furche felt WTO members were so busy managing down 
expectations for Hong Kong that they were failing to think 
beyond it.  As a result, he doubted the Doha round could be 
successfully concluded in 2006. 
 
3. (SBU) Pablo Furche said the GOC expected progress in Hong 
Kong in areas that would matter for developing countries.  He 
mentioned the possibility of a new agreement on cotton and a 
TRIPs and public health waiver for LDCs as progress that 
could be made.  Pablo said the GOC did not want Hong Kong to 
end without any successes.  Despite the likely lack of 
progress on agricultural reform, Chile did not want to see 
other ambitious reform efforts of the Doha round ignored.  He 
agreed with Ambassador Furche that what was needed out of 
Hong Kong was a clear political indication of next steps for 
the WTO. 
 
4. (SBU) On agricultural reform, Pablo said the ball was 
clearly in the EU's court.  The GOC felt that the overall EU 
bargaining position was not realistic.  He cited a lack of 
balance in the EU proposals on agriculture, services and 
NAMA.  Chile definitely wanted an end to export subsidies in 
agriculture but had a more nuanced position on domestic 
subsidies with an acknowledgment of political considerations 
in some EU countries.  Pablo said Chile had made its policy 
positions clear to the EU through the G-20 and the Cairns 
Group.  In addition, he said the GOC had gathered all of the 
EU ambassadors resident in Santiago for a mid-November 
meeting to express to them collectively that Chile expected 
further flexibility in the EU offer on agricultural reform. 
Pablo said the EU ambassadors told the GOC that the current 
offer was already as far as the EU could go. 
 
5. (SBU) Pablo said that failure to conclude successfully the 
Doha round in 2006 could leave the WTO as nothing more than a 
discussion forum.  He felt this could have implications for a 
small country such as Chile, which would then face a much 
harder time getting its voice heard internationally.  He also 
said that the failure of the Doha round might negatively 
affect the entire WTO dispute resolution mechanism.  That 
being said, he and Ambassador Furche both felt that through 
its web of trade agreements Chile was well protected from the 
ramifications of the failure of the Doha round. (Note: Chile 
has 17 trade agreements in place, recently signed one with 
China and plans to begin free trade negotiations with both 
 
Japan and India in 2006. End Note.)  Both felt Chile had done 
a remarkable job of securing bilateral access to its most 
important markets.  While Chile did not want the role of the 
WTO to decline, both Furches said Chile's export-led growth 
was well prepared to survive this eventuality through its 
bilateral agreements. 
 
6. (SBU) Comment. These trade officials are among the leaders 
in defining Chile's overall trade posture and in particular 
its positions in the WTO.  They believe that Chile has 
already secured access to many of its most important markets, 
with or without the successful conclusion of the Doha round. 
There are no signs that Chile intends to stop expanding its 
web of bilateral trade agreements, with Japan and India next 
on the agenda.  Chile is hesitant to play more of a 
leadership role in the WTO context, however, it does actively 
participate in the G-20 and Cairns Group. 
YAMAUCHI