PANAMA PRESIDENT MOSCOSO DISCUSSES BILATERAL

C O N F I D E N T I A L SECTION 01 OF 02 PANAMA 000204

SIPDIS


DEPARTMENT FOR WHA/CEN/BRIGHAM
USTR FOR AGASH-DURKIN
COMMERCE FOR USDOC4332/ITA/MAC/WH/OLAC/MGAISFORD


E.O. 12958: DECL: 01/26/2014
TAGS: PREL PGOV ETRD ECON PM POL CHIEF
SUBJECT: PANAMA PRESIDENT MOSCOSO DISCUSSES BILATERAL
TRADE, PASSENGER VESSEL SERVICES ACT (PVSA) WITH SPECIAL
ENVOY OTTO REICH


REF: A. 03 PANAMA 00722

B. 03 PANAMA 02382


Classified By: AMBASSADOR LINDA WATT FOR REASONS 1.5 (B) AND (D).


SUMMARY
--------------


1. (C) On January 21 Special Envoy for Hemispheric
Initiatives Otto Reich, accompanied by Ambassador Watt, met
with Panama President Mireya Moscoso. Flanked by Foreign
Minister Harmodio Arias and Commerce and Industries Minister
Joaquin Jacome, Moscoso pushed an April 2004 start date for
the bilateral FTA talks. The Ambassador told President
Moscoso that a Commerce Dept. team would conduct research in
Panama during January 27-30 on the economic effects of
granting distant foreign port status to Panama under the
Passenger Vessel Services Act (PVSA). Moscoso said that
Cuban President Fidel Castro (and Venezuelan President Hugo
Chavez) would likely attend the February 2004 Panama meeting
of the Association of Caribbean Nations, although Castro had
been asked not to come. Minister Jacome said a large
investment by Dell Computers is imminent, adding to its
existing call center. End Summary.


FTA
---


2. (SBU) President Moscoso pressed Special Envoy Otto Reich
and Ambassador Watt for an April 2004 start date for the
bilateral free trade agreement talks (that is, prior to the
May 2 national election) in a January 21 meeting. Amb. Reich
replied that USTR had agreed to hold the talks the second
quarter, which means they could start any time between April
and June. Minister Jacome confirmed that no specific date
for the talks has been chosen.


PVSA
--------------


3. (SBU) When President Moscoso urged a modification to the
Passenger Vessel Services Act (PVSA) to grant Panama "distant
foreign port" status, Amb. Watt explained that a Commerce
Dept. team would be in Panama January 27-30 to conduct
research on the economic effects of changing Panama's status.
The results of that research will help the USG make a
determination on PVSA.


Investment
--------------


4. (SBU) Investor interest in Panama is rising, Minister
Jacome told Ambassador Reich, and Americans are buying real
estate in Boquete, Chiriqui (in western Panama). Jacome
added that the Bell South and Manzanillo International
Terminal (MIT) investment disputes are close to being
resolved. Recently, five cruise ships docked in Panama on
the same day, he added, showing that Panama is growing in
popularity as a tourist destination. Panama expects 4%
growth this year, fueled by tourism and construction. Amb.
Reich said he had noticed a big change in Panama City's
skyline since his last visit 10 years ago. Jacome said that
chances are good that Dell Computer soon would decide to
rapidly increase its call-center personnel and make a
significant new investment.


Drug Lord Arrest
--------------


5. (SBU) Amb. Watt thanked President Moscoso for Panama's
excellent cooperation with Embassy and U.S. law enforcement
officials in the recent arrest and deportation of Colombian
kingpin Archangel de Jesus Henao Montoya, wanted in New York
on drug charges. (Note: Henao Montoya has been described as
one of the Hemisphere's leading drug lords.)


Castro, Chavez Visit
--------------


6. (C) Cuban President Fidel Castro (and Venezuelan
President Hugo Chavez) likely will attend the February 13-14
Caribbean Heads of State Summit (Association of Caribbean
States) meeting, President Moscoso said, although Foreign
Minister Arias said Panama had asked Castro not to come.
President Moscoso and FM Arias agreed that Venezuela is
becoming "more like Cuba."


Trial of Anti-Castro Cubans
--------------


7. (SBU) Arias added that Panama's Miami consulate had been
picketed more than once by anti-Castro demonstrators
demanding the release of four anti-Castro Cubans soon to be
tried in Panama for conspiring to murder Castro in Panama
during the November 2001 Ibero-American Summit. The accused
are Luis Posada Carriles, Gaspar Jimenez Escobedo (AmCit),
Guillermo Novo Sampol (AmCit),and Pedro Remon Rodriguez
(AmCit). (Note: Panama considers Posada Carriles to be a
Cuban citizen.) The first hearing in the trial, subject to
constant delays, was held September 5, 2003. (See Reftels A
and B). Panama has rejected Cuban demands for extradition.



8. (U) Special Envoy Reich did not have the opportunity to
clear this message.


WATT