Identifier
Created
Classification
Origin
05BOGOTA5222
2005-05-31 22:25:00
CONFIDENTIAL
Embassy Bogota
Cable title:  

AGRICULTURE IN THE FTA RAPIDLY REACHING THE

Tags:  ETRD EAGR CO FTA 
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C O N F I D E N T I A L SECTION 01 OF 02 BOGOTA 005222 

SIPDIS

DEPT PLS PAS USTR RVARGO AMB JOHNSON AND PALGEIER, NSC FOR
SHANNON, USDA FOR UNDERSECRETARY PENN AND FAS ADMINISTRATOR
TERPSTRA, USDOC FOR ITA/MAC/DAS WBASTIAN; DEPT FOR ACTING
UNDERSECRETARY WAYNE AND WHA AS NORIEGA FROM AMBASSADOR WOOD

E.O. 12958: DECL: 05/27/2015
TAGS: ETRD EAGR CO FTA
SUBJECT: AGRICULTURE IN THE FTA RAPIDLY REACHING THE
BREAKING POINT IN COLOMBIA: PROCESS PROBLEMS

Classified By: Ambassador William B. Wood, reasons 1.4 (b) and (d)

C O N F I D E N T I A L SECTION 01 OF 02 BOGOTA 005222

SIPDIS

DEPT PLS PAS USTR RVARGO AMB JOHNSON AND PALGEIER, NSC FOR
SHANNON, USDA FOR UNDERSECRETARY PENN AND FAS ADMINISTRATOR
TERPSTRA, USDOC FOR ITA/MAC/DAS WBASTIAN; DEPT FOR ACTING
UNDERSECRETARY WAYNE AND WHA AS NORIEGA FROM AMBASSADOR WOOD

E.O. 12958: DECL: 05/27/2015
TAGS: ETRD EAGR CO FTA
SUBJECT: AGRICULTURE IN THE FTA RAPIDLY REACHING THE
BREAKING POINT IN COLOMBIA: PROCESS PROBLEMS

Classified By: Ambassador William B. Wood, reasons 1.4 (b) and (d)


1. (C) Unwillingness to provide a date for agricultural
bilats and to exchange informal agricultural offers have
brought the FTA negotiations to a crisis point here. The GOC
is seriously considering dropping out of the upcoming
Guayaquil FTA round (see septel). I recognize that we may
not be able to reach agreement on the toughest agricultural
issues at this time given that the offers on the table cover
only a limited percentage of actual trade. But right now we
are risking possible gains on substance over an argument on
procedure. We can do better.


2. (C) A new Colombian agricultural offer on grains
submitted May 6 sparked a crisis that deeply eroded support
for the FTA and for the President himself, despite the fact
that the offer was only a marginal improvement over its
predecessor. The pressure was so great that the President
considered pulling back the offer in mid-May, and was only
talked out of it at the last minute by Agriculture Minister
Arias, Trade Minister Botero and Colombian ambassador to the
U.S. Moreno. In exchange, Agriculture Minister Arias
announced publicly that the GOC would not present any further
offers until the U.S. responded. Both Ministers and the lead
trade negotiator have told me that they know they need to
offer considerably better access on items of interest to the
U.S. and that such access would eventually be set at current
levels and allow for growth. Ministers Arias and Botero
claimed to me they can not get to those substantially
improved offers without U.S. support on the process issues of
a date for the meetings and the methodology for exchanging
offers. According to both Botero and Arias, the GOC cannot
pay the political cost of sending new offers without some
U.S. assurances that they will receive improved
counter-offers.


3. (C) We are fully in election season here, and the last
two nationwide polls show a small decline in support for

President Uribe. His numbers have dropped almost ten points
across the board from the seventies to the sixties.
Reelection remains up in the air, and Uribe's support in
Congress is becoming more complicated as we move toward
congressional elections in March and Presidential elections
in May while Uribe tries to push a tough domestic agenda.
The President can ill afford to lose the support of
agricultural groups at this time. Unless politically
powerful agricultural groups that support the agreement see
US movement, the government risks losing their support. The
Trade and Agricultural ministers told me they need a positive
sign from the US to keep support from those parts of the
agricultural sector who are favorably disposed to an FTA.
Such movement would allow the GOC to be forthcoming on issues
of concern, such as access to grains and dismantling of the
price bands, as they can build a winning coalition to counter
those in the sector that oppose an FTA.

--------------
Why We Should Care
--------------


4. (C)

-- Colombia is the biggest agricultural market for the U.S.
in Central and South America and demand for U.S. agricultural
products has been growing. But, the Andean-Mercosur FTA has
given Brazil and Argentina a competitive advantage (already
eroding US sales in wheat) and failure of the FTA would cede
this market to Mercosur.

-- Concluding an FTA is complicated by groups that oppose
the agreement for ideological (and economic) reasons and
actively seek to undermine it. If we are more flexible on
the procedures for the negotiation (see septel),our
flexibility could translate into important gains in substance
in a growing agricultural market.

-- If the GOC were to pull out of the Guayaquil round as the
trade groups suggest, it could send support for an FTA with
the U.S. into a tailspin. Given Uribe,s close
identification with trade liberalization, it would further
erode his support. Moreover it would strengthen exactly
those groups we find least helpful in pressing forward on
economic modernization.

-- Chavez would claim a big victory as well and his siren
call to a different kind of trading arrangement would seem
more appealing to many Colombians who now are set on a an
FTA. (Venezuela is Colombia,s second largest trading
partner after the U.S.)

-- Failure to conclude an FTA would also damage our efforts
to move Colombia to a higher economic growth path with
implications for our overall counter narcotics efforts.

-- The FTA would contain important new protections for U.S.
investors and would give U.S. manufacturers and service
providers significant additional access to Colombian markets.

-- The negotiatiors have come a long way in the area of
intellectual property, dealing with tough issues, such as
indigenous knowledge, in a manner satisfactory to the U.S.
Although these negotiations are not concluded, they are, in
effect, captive to the agricultural negotiations.


5. (C) I am not suggesting that we should conclude an FTA
on political grounds, but it would be unfortunate to fail to
complete negotiations over arguments on process (giving the
Colombians a date for bilaterals as we have done for Ecuador
and Peru or agreeing to informal exchanges of offers). If we
decide against an FTA with Colombia, it should be for reasons
important enough to merit such a decision.
WOOD