COLOMBIAN AMBASSADOR SAYS BOLIVIAN SOY PRODUCERS

UNCLAS LA PAZ 000769

SIPDIS

SENSITIVE
SIPDIS

STATE FOR WHA/AND
STATE PASS FOR USTR

E.O. 12958: N/A
TAGS: ETRD EAGR EINV ECON PGOV PREL USTR BL
SUBJECT: COLOMBIAN AMBASSADOR SAYS BOLIVIAN SOY PRODUCERS
GAME A RIGGED SYSTEM

REF: A. LA PAZ 712


B. LA PAZ 734


1. (SBU) Summary: Colombia's Ambassador to Bolivia, Edgar
Papamija, met with Ambassador Greenlee March 17 to express
concern that Bolivian government officials had inaccurately
spun President Uribe's recent message about the FTA (ref A),
and to receive a read-out of Greenlee's meeting with
President Morales (ref B). The Colombian Ambassador noted
that his own investigations of the soy issue had led him to
conclude that Bolivian producers, far from threatened by the
FTA, simply wished to avert losing a lucrative (i.e., rigged)
business facilitated by their preferential access to
Colombian markets. Based on the private and public comments
of Bolivia's soy producers, we suspect the Colombian
Ambassador is correct. End Summary.


2. (SBU) At his request, Colombia's Ambassador to Bolivia,
Edgar Papamija, met with Ambassador Greenlee March 17.
Papamija was concerned about the Bolivian government's public
messages following President Uribe's March 14 meeting with
President Morales and following Ambassador Greenlee's meeting
with Morales on March 17 (refs A and B). He reiterated that
Uribe had unambiguously declared that the FTA with the U.S.
was concluded, while also (for diplomatic purposes)
expressing a willingness to support any effort initiated by
the Government of Bolivia that found flexibility on the U.S.
side. Morales had publicly spun Uribe's words to signify
Colombia's supposed willingness to negotiate with the U.S. at
Bolivia's side, which Papamija emphasized was not the case.


3. (SBU) Ambassador Greenlee reassured his Colombian
counterpart that President Morales had received Uribe's firm
message loud and clear, and that that message had prompted
Morales to seek an urgent meeting with us. He stated that
official talking points for his meeting with Morales had also
emphasized that the FTA was a done deal, that the ATPDEA
would not likely be extended, and that negotiating an FTA
with Bolivia would depend on the GOB's interest, political
commitment and cooperation on counternarcotics. Ambassador
Greenlee noted that the GOB would probably send a high-level
delegation to the U.S. to discuss the soy issue within the
month.


4. (SBU) Ambassador Papamija then explained that, as a
relative newcomer, he had initially accepted at face value
the argument that preferential access to Colombia's soy
market was critical for the survival of Bolivia's soy
industry. After looking into the issue in greater depth,
however, he had found that Bolivian soy production costs were
relatively low, and that Bolivian producers appeared to be
gaming their preferential access to the Colombian market to
ensure that their soy was always sold just below the price of
competing product from countries lacking such access. He
further noted that Bolivian soy was sold in the Venezuelan
market for significantly less than it fetched in Colombia,
and that this fact disturbed Colombian leaders including
President Uribe. He speculated that Bolivian soy producers
were up in arms about the prospective loss of preferential
access to the Colombian market not because they suspected it
would do them in but because it would end a rigged system
that was exceedingly lucrative for them.


5. (SBU) Comment: In earlier meetings with Embassy
officials, Bolivian soy producers acknowledged that the
largest among them could probably compete in an open
Colombian market. In recent press statements, the Bolivian
soy producers association stated that the industry could
significantly improve its efficiency within the next year.
We suspect the Colombian Ambassador has much of the truth on
his side: more than markets, Bolivian profits are at stake.
GREENLEE