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Viewing cable 06LIMA2367, CONGRESSMAN MEEKS MEETING WITH PRIME MINISTER

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Reference ID Created Released Classification Origin
06LIMA2367 2006-06-13 21:22 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Lima
VZCZCXYZ0006
RR RUEHWEB

DE RUEHPE #2367/01 1642122
ZNR UUUUU ZZH
R 132122Z JUN 06
FM AMEMBASSY LIMA
TO RUEHC/SECSTATE WASHDC 0999
INFO RUEHBO/AMEMBASSY BOGOTA 3552
RUEHBU/AMEMBASSY BUENOS AIRES 2463
RUEHCV/AMEMBASSY CARACAS 9595
RUEHQT/AMEMBASSY QUITO 0456
RUEHLP/AMEMBASSY LA PAZ JUN SANTIAGO 0646
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
UNCLAS LIMA 002367 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
USTR FOR AUSTR EEISSENSTAT AND BHARMAN 
DEPT FOR WHA/AND, EB/TPP, WHA/EPSC 
COMMERCE FOR 4331/MAC/WH/MCAMERON 
 
E.O. 12958: N/A 
TAGS: ETRD ECON EINV PGOV KIPR PREL PE
SUBJECT: CONGRESSMAN MEEKS MEETING WITH PRIME MINISTER 
 
 
1. (U) Summary:  During his codel to Peru, Congressman 
Gregory Meeks met with Prime Minister Kuczynski to discuss 
the Peru Trade Promotion Agreement and the state of 
democracy in Peru.  The Prime Minister provided a persuasive 
case on how the Agreement will boost the economy, 
emphasizing the creation of jobs in the formal sector.  He 
also answered concerns about labor conditions and other 
issues. End Comment. 
 
2. (SBU) Congressman Gregory Meeks visited Peru on May 26-28 
to meet with Peruvian leaders to discuss the U.S.-Peru trade 
agreement.  In addition to Prime Minister Kuczynski, The 
Congressman met with President Toledo, business and labor 
representatives and Afro-Peruvians (septels).  Congressman 
Meeks' Legislative Director Sophia King accompanied him in 
the meetings, as did Ambassador Struble and other embassy 
officers. 
 
Economic Gains and Big Challenges 
--------------------------------- 
 
3. (SBU) Congressman Meeks met with Prime Minister Pedro 
Pablo Kuczynski at the Ambassador's residence. The 
Congressman opened the meeting by explaining that before he 
makes up his mind on a free trade agreement vote, he likes 
to visit the country, meet the leaders and speak with the 
people. 
 
4. (SBU) The Prime Minister provided an overview of the 
economy, noting that the biggest challenge confronting Peru 
was job creation.  Although the economy has been expanding 
for several years, Kuczynski explained, the large size of 
the informal sector was making job creation difficult.  He 
reported that the informal sector had been reduced from 75 
percent to 65 percent of the economy over the last four 
years due to Toledo Administration initiatives and the 
Andean Trade Promotion and Drug Eradication Act (ATPEA). 
The Prime Minister also listed infrastructure as an urgent 
priority.  He reported that in some parts of the country, 60 
percent of the population are without indoor plumbing and 90 
percent of the sewage goes untreated. 
 
Labor and Other Concerns - Better Than It Used to Be 
--------------------------------------------- ------- 
 
5. (SBU) Kuczynski then described the labor situation as in 
a state of transition.  The Fujimori Administration, 
reacting to an overly rigid labor regime, drastically 
loosened labor regulations, according to the Prime Minister. 
The result was a collapse of the formal sector and the 
simultaneous increase of the informal sector.  There had 
been a swing back towards more labor protections under the 
Toledo Administration, Kuczynski said, but a number of labor 
reforms were still needed. 
 
6. (SBU) Congressman Meeks asked about the charge that 
workers were not being allowed to organize.  Kuczynski 
asserted that that was not the case.  The Congressman then 
asked whether pay disparity indicated a systemic 
discrimination against the indigenous.  The Prime Minister 
responded that, in mining, for instance, the difference in 
pay was accounted for by the level of technology.  Open pit 
mines pay more since their workers use bigger equipment. 
 
7. (SBU) Congressman Meeks then inquired about the State 
Department's Human Rights report, noting that opponents of 
the FTA are using it as evidence that Peru is not an 
acceptable partner for a trade accord.  The Prime Minister 
responded that the human rights violations occurred during 
the Fujimori Administration.  Ambassador Struble explained 
that the Human Rights report documents failures and goals, 
but it does not provide the full context or the trajectory 
of the improvements. 
 
Poverty Eradication Plan 
------------------------ 
 
8. (SBU) Congressman Meeks asked whether Peru had in place a 
master plan for poverty reduction that would be maintained 
into the next administration.  Kuczynski responded that the 
Toledo Administration had initiated a poverty program, which 
was programmed to expand in the next few years.  He noted 
that education spending was currently four percent of GDP. 
Ambassador Struble added that Peru had in place several 
interwoven initiatives that included national infrastructure 
initiatives and education, and that a compensation package 
was being worked out for the companies adversely affected by 
the FTA. 
 
Trade Vote - Why Now? 
--------------------- 
 
9. (SBU) The Congressman asked why it was necessary that the 
outgoing Congress ratify the FTA.  The Prime Minister 
responded that delaying until the new Congress convened 
would mean that ratification would not take place until 
September 2006 at the earliest.  Such a delay might inhibit 
passage in the U.S. Congress.  Congressman Meeks reported 
that the perception in Washington is that the average 
Peruvian does not want the PTPA.  Kuczynski reported that 
polls showed that between 60 and 85 percent of Peruvians are 
in favor.  (Note: The May Datum poll showed support for the 
FTA at 53%. End Note) 
 
Comment - Trade = Jobs - Poverty 
-------------------------------- 
 
10. (SBU) Prime Minister Kuczynski made a persuasive case 
why Peru needs the trade accord.  Peru not only needs to 
create jobs, but also needs to expand the formal sector. 
The PTPA would do both.  Kuczynski also makes the case that 
if the current economic expansion can be maintained, with 
the help of the PTPA, Peru could see significant job 
creation and consequent poverty reduction in the near to 
medium term. 
 
11. (U) This cable was not cleared by Congressman Meeks' 
office. 
 
STRUBLE