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### Viewing cable 05LIMA4273, TRADE MINISTER FORESHADOWS FTA RED LINES

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
05LIMA4273 | 2005-09-30 20:42 | 2011-06-27 00:00 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy Lima
Appears in these articles: http://elcomercio.pe

`

    This record is a partial extract of the original cable. The full text of the original cable is not available.

` `

    UNCLAS SECTION 01 OF 02 LIMA 004273

    SIPDIS

    SENSITIVE

    USTR FOR AUSTR VARGO AND BHARMAN
    USDA FOR FAS/ITP/BERTSCH

    E.O. 12958: N/A
    TAGS: ETRD ECON EINV PGOV PREL PE
    SUBJECT: TRADE MINISTER FORESHADOWS FTA RED LINES

    REF: LIMA 3888

    ¶1. (SBU) Summary:  In meetings with the Ambassador, Trade
    Minister Ferrero and Peru's Chief FTA Negotiator de la Flor
    highlighted two red lines for Peru in the U.S.-Andean FTA
    negotiations.  They warned that Peru's Congress would not
    accept an FTA that permitted the importation of used
    clothing or went beyond CAFTA's intellectual property
    commitments.  De la Flor did note that Peru is prepared to
    accept data protection provisions in the CAFTA deal.  On the
    public diplomacy front, Ferrero lamented that
    representatives from the private sector are not more vocal
    in their support of the FTA.  The Ambassador noted that he
    planned to host a meeting with business association leaders
    to bolster FTA public outreach.  The Ambassador also
    expressed concern about timing for solving the Engelhard
    dispute.  End Summary.

    ¶2. (SBU) The Ambassador met separately with Trade Minister
    Alfredo Ferrero and later with Peru's FTA Chief Negotiator
    Pablo de la Flor and Agriculture Negotiator Julio Paz on
    September 28 to review progress in the U.S.-Andean FTA
    negotiations.  The Ambassador described his recent trip to
    Washington, including Capitol Hill, where President Toledo
    had left a positive impression during his visit there the
    week before.  Noting the USG's desire to close the trade
    deal by November, the Ambassador expressed concern to
    Minister Ferrero about the resolution timing of the
    Engelhard dispute.  The Ambassador noted that all Members of
    Congress raised Peru's commercial disputes.  Ferrero took
    note.

    Peruvian Show Stoppers
    ----------------------

    ¶3. (SBU) Both the Trade Minister and Vice Minister de la
    Flor emphasized that Peru would not be able to go beyond the
    IPR coverage outlined in the CAFTA deal.  Ferrero indicated
    that President Toledo and Peru's Congress would not accept a
    trade deal that included second-use patents, particularly
    since the accords with Central America and Chile omitted
    them.  De la Flor added surgical techniques, plants and
    animals to the list of patents they could not support, but
    he noted that Peru could accept the data protection
    provisions in the CAFTA deal.  The Chief Negotiator noted
    that while he wants to resolve the remaining contentious
    issue in the IPR group, Ecuador is slowing down the
    negotiations.

    ¶4. (SBU) A second red line for the Peruvians is used
    clothing.  Both Ferrero and de la Flor emphasized that
    Peru's Congress would reject an FTA that permitted the
    importation of used clothes from the United States.  They
    explained that Peru's internal market is small and could not
    absorb such importations.  De la Flor emphasized that
    accepting used clothing would displace small apparel
    producers.

    Countering Venezuela's Initiatives
    ----------------------------------

    ¶5. (SBU) Minister Ferrero urged U.S. flexibility on the two
    above issues, arguing that concluding an FTA with Peru and
    Colombia is in the best interest of the United States.  He
    noted that an FTA with the Andeans would bolster support for
    U.S. allies at a time when Ecuador and Bolivia are growing
    weaker and increasingly susceptible to Venezuela petroleum
    diplomacy and influence.  The Minister noted that an Andean
    FTA that eventually included Ecuador and Bolivia would be a
    big blow to Chavez and Brazil.

    FTA Debate Heating Up
    ---------------------

    ¶6. (SBU) Ferrero lamented that the private sector is not
    doing more to express its support publicly for the FTA.  He
    indicated that the GOP is reevaluating its FTA public
    affairs campaign, and wants to focus increasingly on radio
    coverage to promote the FTA.  Citing a decline in FTA
    support from 65 to 53 percent between January-September
    polling data, the Ambassador indicated he planned to host a
    meeting with business leaders to encourage coordinated and
    active FTA public outreach.  The Minister welcomed the
    initiative.

    ¶7. (SBU) De la Flor publicly announced that he would be
    traveling to Washington with members of Peru's FTA team the
    week of October 3 to discuss Rules of Origin, Market Access,
    and Textiles.  He prefers not to announce the bilateral
    digital video conference between agriculture negotiators on
    October 6 to review Peru's latest offer, which he described
    as superior to CAFTA and ready to close.  The Ambassador
    stressed the further need for flexibility on the part of
    Peru's ag negotiators.

    Comment: Crunch Time
    --------------------

    ¶8. (SBU) Eager to finish negotiations, the Peruvian
    negotiators are making clear in public statements that late
    November is the deadline to wrap up the FTA.  Meanwhile, GOP
    officials increasingly fear opposition anti-FTA campaigns,
    which are picking up.

    STRUBLE

`