FTA - GOP TO GRANT SPS EQUIVALENCY TO U.S.

UNCLAS PANAMA 000335 SIPDIS SENSITIVE SIPDIS DEPT FOR WHA/CEN - PIERCE ALSO FOR WHA/EPSC - URS AND GUMBINER ALSO FOR EP/TPP/BTA - LAMPRON STATE PASS USTR FOR CROWDER, LATIMER, FEDCHOK AND MALITO ALSO PASS USDA/FAS/ITP - SPITZER USDOC/MAC FOR GAISFORD E.O. 12958: N/A TAGS: ETRD EAGR USTR PGOV PM SUBJECT: FTA - GOP TO GRANT SPS EQUIVALENCY TO U.S. REF: PANAMA 0233 AND PREVIOUS ¶1. Summary. Panamanian officials announced February 19 that it will soon grant "equivalency" to the U.S. system for food safety and sanitary and phytosanitary (SPS) protection. The GOP is finalizing a "decree law" that President Torrijos expects to issue by February 28 to create an autonomous, science-based "Panamanian Food Safety Authority." The decree would, inter alia, clearly remove the Agriculture and Health Ministries from any role in imposing "any restriction in the importation of foods." The GOP seeks a tenth negotiating round with USTR March 6-7 aimed at closing a free trade agreement (FTA). End summary. GOP TO GRANT SPS EQUIVALENCY TO U.S. -------------- ¶2. (U) Panamanian Agriculture Minister Guillermo Salazar and Health Minister Camilo Alleyne announced February 19 that, based on a GOP team's Feb. 13-17 inspection of the U.S. system for food safety and SPS protection, the Torrijos administration will grant "equivalency" to the U.S. system. Alleyne, who led the GOP inspection team to visit USDA- APHIS, CDC, and other facilities in Washington, DC, Atlanta, and Miami, said, "We can guarantee Panamanians categorically that imports from the U.S. pose no risk to human health and national agricultural heritage." Salazar emphasized that this equivalency determination is based on documentation the GOP has developed through visits to 110 processing plants in the U.S. since 1997 and the "reliable" information the inspection team obtained through last week's visit. ¶3. (SBU) President Torrijos' Cabinet expects to consider the inspection team's final report on Feb. 22 before issuing its final equivalency determination. A high-level GOP official told Ambassador on Feb. 16 that the "decision is done" and that the Administration is finalizing its plans to sell the decision, and the FTA, to the public. He added that, although Panamanian cattlemen and other protectionist producers continue to voice their opposition, he has also been approached by a growing number of producers anxious to conclude the FTA as soon as possible. GOP POLISHES PLANS FOR NEW "SPS ENTITY" -------------- ¶4. (U) The Ministry of Industry and Trade (MICI) has led an inter-agency process to prepare a draft "decree law" through which President Torrijos plans to create a new entity, the "Panamanian Food Safety Authority." (As reported reftel, the National Assembly granted President Torrijos the authority to legislate by decree until February 28, after which the Assembly reconvenes.) This entity would have administrative and budgetary autonomy. The Health Minister would preside over a board of directors composed of the National Science & Technology Secretary, the Gorgas Institute Director, and several Department heads drawn from existing Agriculture and Health Ministry offices responsible for food safety and plant and animal health. It would consolidate existing GOP offices responsible for issues related to these food and SPS issues. It would require the application of SPS norms based strictly on scientific and technical criteria. ¶5. (SBU) MICI's revised draft is an improvement over the original proposal, in that it would clearly remove the Agriculture and Health Ministries from any role in imposing "any restriction in the importation of foods" and that the ministries would be "without competence on SPS matters related to food imports." As revised, the draft decree would not include private sector representatives on the entity's board of directors (as originally proposed). The decree also stipulates clearly that entity staff would be prohibited from having any active employment or interests in enterprises engaged in food production or importation. MICI SEEKS 10TH ROUND IN EARLY MARCH -------------- ¶6. (SBU) MICI's Chief FTA Negotiator, Estif Aparicio, told Econ Chief February 19 that MICI hopes for a tenth (and final) negotiating round with USTR as early as March 6-7. He said closing FTA negotiations with the U.S. then would give a huge boost to Panama's biggest annual trade expositoin ("EXPOCOMER") set for the same week in PANAMA City. The GOP expects to sign an FTA with Singapore shortly before then and aims to sign its recently concluded FTA with Chile during EXPOCOMER. The GOP's aim is to use all three FTA-related events to boost momentum for Panama's moves toward free trade. ¶7. (SBU) Comment: Amid a growing chorus of pro-FTA appeals from leading business groups (including the traditionally protectionist National Industrial Syndicate) and public opinion polls suggesting that support for an FTA has rebounded to 54%, the GOP appears intent on finally closing a deal. Their aim is to do so before university students return to classes in mid-March, thereby keeping anti-FTA noise to a minimum. It is widely believed that President Torrijos wants to close FTA negotiations now in order to open the way for the GOP to put its long-awaited referendum on the proposed PANAMA Canal expansion. EATON