Identifier
Created
Classification
Origin
06PANAMA337
2006-02-21 21:50:00
SECRET//NOFORN
Embassy Panama
Cable title:  

PANAMA -- CHINA RECOGNITION HANDWRITING IS ON THE

Tags:  PGOV PREL PINR PM SP CH TW HO 
pdf how-to read a cable
VZCZCXYZ0000
OO RUEHWEB

DE RUEHZP #0337/01 0522150
ZNY SSSSS ZZH
O 212150Z FEB 06
FM AMEMBASSY PANAMA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7440
INFO RUEHBJ/AMEMBASSY BEIJING 0142
RUEHIN/AIT TAIPEI 0107
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHDC
RHMFISS/JOINT STAFF WASHINGTON DC
RUEKJCS/OSD WASHDC
RHMFISS/CDR USSOUTHCOM MIAMI FL//J5/J2/POLAD//
S E C R E T PANAMA 000337 

SIPDIS

NOFORN
SIPDIS

DEPARTMENT ALSO FOR WHA/CEN, WHA/FO, EAP/FO, EAP/CM, EAP/TC
SOUTHCOM ALSO FOR POLAD

E.O. 12958: DECL: 01/06/2016
TAGS: PGOV PREL PINR PM SP CH TW HO
SUBJECT: PANAMA -- CHINA RECOGNITION HANDWRITING IS ON THE
WALL

REF: A. TAIPEI 0427


B. 05 PANAMA 1948

C. STATE 25012

Classified By: DEPUTY CHIEF OF MISSION LUIS ARREAGA FOR REASONS
1.4 (B) AND (D).

ACTION REQUEST
---------------
S E C R E T PANAMA 000337

SIPDIS

NOFORN
SIPDIS

DEPARTMENT ALSO FOR WHA/CEN, WHA/FO, EAP/FO, EAP/CM, EAP/TC
SOUTHCOM ALSO FOR POLAD

E.O. 12958: DECL: 01/06/2016
TAGS: PGOV PREL PINR PM SP CH TW HO
SUBJECT: PANAMA -- CHINA RECOGNITION HANDWRITING IS ON THE
WALL

REF: A. TAIPEI 0427


B. 05 PANAMA 1948

C. STATE 25012

Classified By: DEPUTY CHIEF OF MISSION LUIS ARREAGA FOR REASONS
1.4 (B) AND (D).

ACTION REQUEST
--------------

1. (U) This message contains an action request. (See para
3.)

SUMMARY
--------------

2. (S/NF) Panamanian presidential advisor Jorge Ritter on
February 20 detailed Panama's thinking about diplomatic
recognition of the People's Republic of China (PRC) for DCM,
which he called a "medium-term" prospect. Ritter's comments
followed news reports of the "secret" China-Panama talks in
Madrid last week. Although the Panamanian government (GOP)
believes its long-term interests lie with the PRC, Ritter
said, it has no desire to jettison Taiwan right away or to
upset its relations with the United States. Ritter strongly
implied that recognition could have to wait at least until
June 2007 for Congressional action on the still unsigned
U.S.-Panama Free Trade and an as-yet-to-be-announced
Panamanian referendum on Canal widening (possibly sometime in
2006). POL Counselor also got similar information last week
from Taiwan Ambassador Hu and former ambassador to the U.S.
Eloy Alfaro. End Summary.

Action Request
--------------

3. (S/NF) Ritter explained that the GOP prefers not to act
on the basis of suppositions of how the USG may or may not
react to Panama's plans for PRC recognition and requested an
opportunity to share views. Embassy notes Reftel C talking
points for use with the Zelaya government (State
25012--Honduran Relations with PRC/Taipei) also could be used
in Panama with the Torrijos government. Embassy requests
Department's guidance on the use of Reftel C talking points.

FM Lewis Was In Madrid: The (China) News
--------------

4. (S/NF) A February 19 China News (Taiwan) story
(summarized in the February 21 edition of La Prensa Panama's

leading daily) reported that PRC-Panama talks were held in
Madrid. Embassy has confirmed that Vice President/Foreign
Minister Samuel Lewis headed the GOP delegation, as the story
asserts. On February 20, Panamanian presidential advisor
Jorge Ritter confirmed with DCM that he had taken part in the
Madrid talks. The PRC counterpart was an unnamed Deputy
Foreign Minister with "about 10 years experience in the U.S."


Panama Cannot "Ignore" China
--------------

5. (S/NF) Ritter made the following points:

-Panama views PRC recognition as a "medium-term" project.

-The GOP has no desire to jettison its relations with Taiwan
right away or to upset its relations with the United States.

-Panama does not want ill-considered or over-hasty actions to
derail FTA negotiations with the U.S. or its planned Canal
referendum.

-Panama cannot ignore the PRC,s growing commercial
importance and believes its long-term interest lies with
having diplomatic relations with the PRC.

Meeting With Taiwan Ambassador Hu
--------------

6. (S/NF) In a February 16 meeting, Taiwan Ambassador
(Toms) Ping-fu Hu confirmed that a PRC-Panama meeting had
taken place in Madrid during February 14-15 as reported
Reftel A. The Panamanian participants included Leonardo Kam
(Panama's Commercial Representative in Beijing),Jimmy Arias,
and Jorge Ritter, a former foreign minister under Manual
Noriega. (Hu failed to identify VP/FM Samuel Lewis as

leading the GOP delegation.) The PRC side included eight
officials -- a deputy minister foreign affairs, an
agriculture ministry official, and six others, Hu said.

Bio Note
--------------

7. (C/NF) Ritter is an "informal" (unpaid) advisor and
speechwriter to President Torrijos. Arias, who owns a home
in Madrid, is a wealthy upper-class lawyer and a newcomer to
the Torrijos inner-circle. The youngest brother of Ricardo
Arias Caldern (who was vice president in 1990-91 following
Operation Just Cause, a founder of the Christian Democratic
party, and an anti-military activist, now a Torrijos
confidant),Arias's growing influence with Torrijos has been
noted with disdain by PRD "regulars." Ambassador Hu was
formerly ambassador to El Salvador and has a daughter who was
born in Panama in the 1980s.

Taiwan Panama Relations "Still On Hold
--------------

8. (S/NF) Hu confirmed that despite the apparent "positive"
signals of last September (Reftel B: 04 Panama 1948--Panama
Turning Toward Taiwan),Taiwan's relationship with Panama
still is on hold. "Normal development aid" is frozen and,
contrary to expectation, no budget information has been
exchanged for planning purposes, Hu said, although Taiwan's
15 development volunteers continue to work in the Panamanian
countryside as before. Hu said he has met with President
Torrijos rarely but more frequently with Vice
President/Foreign Minister Lewis. Hu typically meets Lewis
at his private office, to avoid the "prying" eyes of foreign
ministry functionaries, particularly Daro Chir. Chir
opened Panama's commercial development office in Beijing some
years ago and is known to favor the PRC over Taiwan, Hu said.

Is Money No Object?
--------------

9. (S/NF) The February 14-15 Madrid meeting continued
negotiations about Panamanian diplomatic recognition of the
PRC, which had ended unsuccessfully last summer, Hu
explained. For the Panamanians, it is a matter of money, Hu
claimed. Hu said the current offer before the Panamanians is
a $150 million in development assistance, investments (such
as a former Howard air base),and purchase of agricultural
exports (principally bananas). Hu confirmed that many in the
ruling Democratic Revolutionary Party (PRD) favor a switch to
China.

"Boosting Democracy"
--------------

10. (S/NF) Hu covered familiar ground, asserting that Taiwan
and the United States share interests in "fighting
communism," boosting democracy, and minimizing Chinese
influence in the Western hemisphere. He also alleged that
the PRC is eager to become involved in Panama's upcoming
Canal expansion project and wants to use equipment left over
from Three Gorges Dam construction. Taiwan's "democratic
example" and its "efforts to reduce poverty" in Central
America are important to advancing democracy in the region,
he said.

Finding the Right Moment
--------------

11. (S/NF) Hu said that the "results" of the February 14-15
meeting might not be known for at least six months. Even
then, the Panamanian government could well conclude that the
moment for a dramatic switch in relations is not favorable,
given that bilateral negotiations for a U.S.-Panama Free
Trade Agreement may produce a text that the Congress will
have to consider before trade negotiating authority expires
in June 2007.

China Winds Are "Less Strong"
--------------

12. (S/NF) In a February 17 meeting, former Panamanian
ambassador to the United States Eloy Alfaro told POL
Counselor that he believes that the Panamanian winds blowing
in favor of China recognition are less strong than they were
a year or six months ago. Alfaro said the earlier
discussions he heard were couched in principle, revolving
around Panama being seen as a "serious" country, not how to
extract maximum benefits from both sides. Alfaro said
"certainly nothing will happen before the Canal referendum"
(possibly will be held in 2006) or before the U.S. Congress
decides one way or the other on the still-unsigned FTA,
possibly by June 2007.

Consensus Still Elusive
--------------

13. (S/NF) For the foreseeable future, Taiwan's relations
with Panama seem to be stuck in limbo, but a consensus for
changing Panama's diplomatic representation to favor the PRC
has not gathered momentum, Alfaro said. (Note: Alfaro also
is a member of Panama's foreign affairs advisory council and
the Panama Canal Authority (ACP) board, End Note.)

Comment
--------------

14. (S/NF) After meetings between FM Lewis and Secretary
Rice and Presidents Bush and Torrijos, at which the "China
question" was raised, it is somewhat curious that the GOP
wants to hear the U.S. position spelled out once again. A
Panamanian wish not to be seen as "rocking the boat" is at
play here, and political nervousness at undertaking a major
departure from Panamanian diplomatic tradition. Taiwan by
all accounts considers Panama (see Reftel A),along with the
Holy See, to be its principal remaining diplomatic
relationship, and fears that a Panamanian switch could
unloose a "domino effect" in Central America and the
Caribbean, which could leave it all but bereft of
international diplomatic links.

EATON