POTUS VISIT PANAMA

UNCLAS SECTION 01 OF 02 PANAMA 002152

SIPDIS

SENSITIVE

WHA/CEN PASS TO GREGORY SCHIFFER

E.O. 12958: N/A
TAGS: PGOV PREL OVIP PM LABOR HUMAN RIGHTSPOLMIL
SUBJECT: POTUS VISIT PANAMA

1.(SBU) Summary. In an October 21 meeting, FM Lewis told
the Ambassador of his government's heightened concern about
the absence of meaningful "deliverables" from the President's
visit. While Lewis was careful to emphasize that the visit
itself was a great symbol of the close relations between the
US and Panama, he feared that without tangible deliverables
the local press will turn the visit into a negative. Lewis's
main concern is that the FTA won't be concluded before the
visit. He welcomed the possibility of announcing the
establishment of an ad-hoc consultative mechanism between our
governments as long as its wording did not suggest its sole
focus was security. Lewis also asked that we coordinate our
response to issues such as Unexploded Ordinance (UXO) that
are certain to surface. Embassy believes that in the absence
of an FTA, a strong communiqu highlighting our common
interests, our shared democratic values, our interest in
world commerce and the canal, our commitment to open markets
and free trade, the shared fight against corruption and
agreement to shore up democracy in the region will send a
strong signal to the region. In addition, ongoing bilateral
programs, if presented correctly, clearly show the strength
of U.S. commitment to Panama. End Summary.

GOP worried FTA may not be ready for prime time

2.(SBU) FM Lewis invited the Ambassador for an urgent
meeting to discuss the &substance8 of the President's
visit. He immediately launched into a discussion of the FTA.
Lewis said the GOP had hoped an FTA agreement would be the
centerpiece of the visit but acknowledged that it looked
unlikely based on reports he had received from Washington.
The Ambassador told Lewis that trade negotiations follow
their own timetable and that just because an agreement is not
reached by the time the visit takes place does not mean all
is lost. Lewis took the Ambassador's advice on board and
asked what was the likelihood of reaching some sort of
agreement on: Panama's request for "near Foreign port"
designation and/or some sort of debt relief.

3.(SBU) The Ambassador told Lewis that neither was likely in
the timeframe of the visit. He stressed that the President's
visit is powerful evidence of the strength of the Panama/U.S.
relationship and that we have an impressive set of bilateral
accomplishments. Lewis asked that we coordinate our message
particularly with respect to sensitive issues such as UXO,
allegations that the Torrijos Administration is trying to
militarize the police force, China's influence on the
management of the Canal, and other issues that surface when
the opposition or the press try to embarrass the Torrijos
administration. The Ambassador agreed to have a coordinated
approach.

POTUS visit opportunity to highlight mature relationship

4.(SBU) The Ambassador told Lewis that there are possible
deliverables for the visit, but not the kind he was looking
for. He reminded Lewis that we had discussed the possibility
of announcing an ad-hoc consultative mechanism on security.
Lewis responded that such an announcement would fall into the
hands of those who accuse the Torrijos administration of
trying to militarize the police force in Panama. He
suggested instead that we expand the concept to include
discussions on the Embassy's democracy initiative and other
issues. The Ambassador said the Embassy would look into his
suggestion and review our assistance program with a view to
repackage it and highlight the accomplishments of our
bilateral relationship. Lewis welcomed this initiative.

U.S. assistance to Panama is broad and deep

5.(SBU) An Embassy review of our assistance programs in
Panama reflects Panama's status as a mature partner of the
United States. While having "deliverables8 would be a
desirable outcome of the visit, Embassy believes we have much
to be proud of, to wit:

U.S. provided $32.2 million in assistance to Panama in FY

2005. A brief summary of programs administered by U.S.
agencies in Panama includes:

U.S. AID
Transparency/Anti-corruption Programs $2.2 million
Trade Capacity Building $4.6 million
Strengthening Darien Communities $ .8 million


Animal Plant and Health Inspection Service
(APHIS) Screw Worm eradication and hoof and
mouth disease barriers $10 million


Department of Labor Child Labor Initiative,
Trade Development, and Prevention of
Commercial Sexual Exploitation $ 2 million

Department of Homeland Security assistance
to Panamanian Public Forces $ 5.2 million


Office of Defense Cooperation Humanitarian
Assistance (New Horizons) $ 6.0 million

Fulbright/Exchange Visitors Programs $ .4 million

6.(SBU) Dollar figures alone simply cannot communicate the
commitment of the U.S. to helping Panama become a developed
nation. Many Americans are actively involved in helping
Panama and provide "deliverables" every day. Here are just a
few examples of our commitment to this country.

Peace Corps: 130 volunteers, working in areas where the
poverty rate exceeds 70%. Over 35% of these volunteers are in
indigenous areas with poverty rates of 98%.

New Horizons, the Department of Defense Humanitarian
Program: deployed 3,500 military members to Panama who built
three schools and community centers in Panama's poverty
stricken interior. Military doctors and veterinarians also
provided assistance to Panamanians.

Panama is the beneficiary of two debt-for-nature swap
programs totaling $21 million for tropical rainforest
preservation. Panama is the only country to benefit from two
such agreements.

The Foreign Commercial Service brought 102 U.S. companies to
Panama on trade missions and business development programs in
FY 05

Currently, 294 persons are employed in the APHIS screwworm
eradication program. A new $40 million facility is under
construction which will generate 300 new jobs for Panamanians.

The number of Americans who live permanently in Panama, many
of them retirees who have purchased homes and other
properties, continues to grow, and now stands at over 25,000.

Finally, we have also begun construction on a $70 million New
Embassy Compound, providing many construction jobs and
contracts to Panamanians.

EATON