Cablegate: Santiago Nov. 16 Media Report

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SUBJECT: Santiago Nov. 16 Media Report

U.S.-Related News

1. Headline: "Bachelet and Obama Push Transpacific Trade"

Sub-headline: U.S. President supports initiative to expand
(commercial) trade in the Pacific Rim. If there was one topic that
President Bachelet highlighted at APEC it was President Obama's
support for developing a transpacific agreement and the role that
Chile played in negotiating it. Article includes photograph of
Presidents Bachelet and Obama (Government-owned La Nacion, 11/16).

2. Although the United States was reluctant to establish an APEC
free trade agreement, at the meeting with the P4 countries
President Obama endorsed Bachelet's initiative to strengthen trade
within the Asia-Pacific region. The agreement was one of Bachelet's
most important diplomatic and commercial goals at APEC. Obama's
endorsement was valued by La Moneda. "The P4, or transpacific
agreement, has received U.S. support in a very positive
environment.... There was initially considerable skepticism ...
until the United States showed interest," said Foreign Minister
Mariano Fernandez. Although the United States only said it would
join the talks, Chilean official circles consider this the first
step to launching negotiations (La Nacion, 11/16).

3. As Peruvian President Alan Garcia canceled his bilateral
meeting with Bachelet without informing her, the Chilean delegation
received a worthy invitation: President Obama requested a meeting
with Bachelet at APEC (Popular, high circulation Las Ultimas
Noticias, 11/15).

Chile-Peru and U.S. Weapons Sales

4. Peru has been engaging in talks to schedule a UNASUR Foreign
Affairs meeting at the end of November to discuss Lima's proposal
to decrease military acquisitions in the region. Peru is deploying
these efforts in the wake of U.S. Congressional authorization to
sell Chile missiles and radars for up to US$ 665 million. Peruvian
Foreign Minister Jose Antonio Belaunde harshly criticized the U.S.
authorization (Conservative, influential El Mercurio, 11/16).

5. Press reports about a Peruvian officer arrested in Lima for
allegedly spying for Chile started the day after the United States
announced its authorization for Chile to buy air-to-air missiles
(Conservative, independent La Tercera, 11/14; Conservative,
afternoon La Segunda, 11/16).

6. Peruvian and Chilean diplomatic analysts believe that the real
issue behind the Chile-Peru impasse over an alleged case of
espionage is the U.S. authorization to sell Chile a package of
weapons that includes missiles for the F-16 (La Tercera 11/14).

7. The government of Chile is troubled by Peru's decision, during
APEC, to reveal the case of a Peruvian officer arrested for
allegedly spying for Chile, when the individual was arrested in
Lima two weeks ago (La Nacion, 11/16).

8. Chilean Air Force Commander-in-Chief Ricardo Ortega said that
Chile has been very transparent in the arms sale and announced its
eventual acquisition with "considerable anticipation." With regard
to Peru's claims of an arms race in South America, Ortega noted,
"these are the same type of missiles that Peru has, but of another
origin (Russia) (La Segunda, 11/16).

9. Chilean Foreign Minister Mariano Fernandez dismissed the
participation of the government of Chile "in any illegal activity
in the relationship between the two countries (Chile and Peru)" (El
Mercurio, 11/14).

10. Chilean Foreign Minister Mariano Fernandez said that Bachelet
had met privately with her Peruvian counterpart Alan Garcia at
APEC. Reportedly in that meeting Bachelet noted that this was the
second time that Peru created an impasse with Chile during an
international summit, adding that she considered this coincidence
odd. The GOC believes that this is related to the claim that Peru
submitted to The Hague in order to change its maritime border with
Chile; Peru would be trying to portray that Chile is preparing for
war and to disavow The Hague's ruling if it undermines its
interests. Chile, on the other hand, had a completely different
approach to recent cases of Peruvian espionage just a few months
ago. In two cases, Chile deported the Peruvian citizens involved
and issued the Peruvian embassy "a warning." (La Tercera, 11/15).

11. In the private conversation with President Garcia, Bachelet
rejected the accusation that Chile was spying on Peru and
questioned Garcia for using multilateral forums to create
controversy (El Mercurio, 11/15).
SIMONS

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