A/S SULLIVAN ASSURES TRADE CONFEDERATIONS ON FTA

C O N F I D E N T I A L BOGOTA 010236

SIPDIS

SIPDIS

DEPT. PLEASE PASS TO DEPT. OF LABOR, USTR

E.O. 12958: DECL: 10/26/2016
TAGS: ELAB PHUM PGOV ETRD CO
SUBJECT: A/S SULLIVAN ASSURES TRADE CONFEDERATIONS ON FTA

Classified By: Charge d'Affaires Milton K. Drucker.
Reason: 1.4 (b,d)

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SUMMARY
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1. (C) In a cordial 40 minute meeting on October 25, EB
Assistant Secretary Daniel Sullivan said the U.S. shared
labor leaders' goal of poverty reduction in Colombia, and
explained the FTA would be instrumental toward this end. The
presidents of the CUT (555,000 workers),the CTC (55,000
workers),and the deputy secretary general of the CGT
(135,000 workers) predicted the FTA would be ratified, but
expressed concerns it would worsen labor conditions,
unemployment, and salary levels. The labor leaders also
highlighted a lack of infrastructure and technology as
factors that would affect Colombia's ability to compete in an
open market. End Summary.

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A/S SULLIVAN: FTA WILL REDUCE POVERTY
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2. (C) A/S Sullivan said the U.S. shared with Colombian labor
leaders the goal of reducing poverty levels, and explained
the FTA would achieve this by making Colombia more
competitive. According to A/S Sullivan, the challenge was to
"integrate all aspects of Colombian society into benefiting
from broader economic growth." He explained that while the
FTA would not be renegotiated, the U.S. valued the opinions
and concerns of Colombian labor. The three labor leaders
said they lacked confidence that the FTA would benefit
Colombia, but accepted that it would be ratified.
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LABOR LEADERS: FTA WILL WORSEN LABOR CONDITIONS
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3. (C) The CUT's Carlos Rodriguez, the CTC's Apicedes
Fernandez, and the CGT's William Millan said labor conditions
in Colombia were poor, and the FTA would worsen them. Millan
explained labor reforms passed in 2002 lowered wages for
overtime work and increased the use of temporary contracts.
Rodriguez claimed that approximately 75 percent of Colombian
workers were employed under "precarious" means of
subcontracting, associated cooperatives, or temporary
contracts. According to the labor leaders, the FTA would
worsen labor conditions by forcing companies here to become
more competitive. "Labor is always the first cost to be
cut," Millan said. Rodriguez argued that organized labor
could not accept poor work conditions under the argument of,
"We have to compete."

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LACK OF INFRASTRUCTURE, TECHNOLOGY
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4. (C) The labor leaders said Colombia's lack of
infrastructure and technology affected its ability to
compete. The CGT's Millan stated that 60 percent of export
production was located in Bogota, but the nearest port was
over 800 kilometers away. He explained transportation was
hampered by high gas costs, a vulnerable and limited highway
system, and no modern railway. The CUT's Rodriguez said lack
of technology was a major problem, and that the FTA would
"wipe out" entire sectors due to the technological gap
between American and Colombian companies. Both he and the
CTC's Fernandez predicted agriculture, specifically sugar,
and agro-industry would be most negatively impacted.

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DEBATE OVER BENEFITS OF OPEN ECONOMY
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5. (C) The CGT's Millan questioned the benefits of an open
economy to Colombia. According to Millan, steady opening of
Colombia's economy since 1990 had not brought any benefits.
He argued that in order to compete in such an open market
environment, the economy would have to export the surplus of
its domestic consumption, and Colombia did not enjoy such a
surplus. A/S disagreed, explaining studies had shown that
countries with open market policies grow faster than closed
economies and highlighting the strength of the U.S. economy,
in spite of running a current account deficit.
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LABOR CLAIMS BENEFITS OF ECONOMIC GROWTH NOT EVEN
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6. (C) According to the labor leaders, Colombia's economic
growth has not benefited its workers. The CUT's Rodriguez
said Colombia was enjoying a growth rate of 5.9 percent
annually, but employment rates had declined and poverty rates
had risen. He claimed the gains of economic growth had been
directed to the country's most wealthy. A/S Sullivan
interjected that he understood unemployment and poverty had
declined in recent years because of strong economic growth.
The CTC's Fernandez argued that in order to combat poverty
and take advantage of free trade agreements, workers needed
to contribute to the economy, but that salaries were not
sufficient to do this. He said 80 percent of Colombians
earned less than 500 USD per month. Rodriguez claimed 6
million Colombian workers earned less than minimum wage, with
2-3 million earning below 50 percent of minimum wage.

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SOCIAL CONDITIONS AND THE FTA
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8. (C) The labor representatives said the GOC and Colombian
business leaders needed to pay more attention to the
country's social conditions. The CTC's Fernandez suggested
including a social development chapter in the FTA, and also
called on business leaders to assume more social
responsibility. The CUT's Rodriguez stated that the GOC
buoyed several financial institutions when faced with a
crisis, but claimed these businesses had not given anything
back to society.

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LABOR CRITICIZES FTA PROCESS, DEFENDS OPPOSITION
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9. (C) The labor leaders expressed concern over the USG's
approach to negotiating free trade agreements and the GOC's
lack of openess in its own position. The CGT's Millan
requested that the U.S. do a better job "considering the
Colombian reality and the internal conflict here." The CUT's
Rodriguez complained that the U.S.-Colombia FTA's labor
chapter was identical to CAFTA's. The CGT's Millan claimed
that Colombian FTA negotiators had promised to consider
labor's interests in the debate, but that the GOC never
solicited concerns from the trade confederations. Rhett
Doumitt of AFL-CIO's Solidarity Center, explained that the
AFL-CIO had signed a joint declaration with Colombia's trade
confederations, criticizing both the process and content of
the FTA. He said it was important for the AFL-CIO to work
closely with the trade confederations to ensure the FTA
respects workers' rights.


10. (C) The labor leaders asserted that organized labor's
opposition to the FTA was not "capricious." Rodriguez
explained, "We do not say no, simply for no's sake." The
leaders also expressed affinity for the United States, with
Millan saying, "We look up to you." Rodriguez described
organized labor as a "friend of integration," explaining that
globalization demanded that labor maintain an active analysis
and dialogue on the issue.


11. (C) A/S Sullivan concluded by saying although there were
obvious differences of opinion about the FTA, the U.S. shared
the labor leaders' goals of greater prosperity and lower
poverty levels for the people of Colombia.


12. (U) This cable has been cleared by A/S Sullivan.
DRUCKER