PANAMA HOSTS CENTRAL AMERICAN PRESIDENTIAL SUMMIT

UNCLAS PANAMA 000486

SIPDIS

SENSITIVE
SIPDIS

DEPARTMENT ALSO FOR WHA/CEN, INL AND INR/B
SOUTHCOM FOR POLAD

E.O. 12958: N/A
TAGS: PGOV PREL PINR PM
SUBJECT: PANAMA HOSTS CENTRAL AMERICAN PRESIDENTIAL SUMMIT


SUMMARY
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1. (SBU) Seven presidents, one prime minister and one vice
president met in Panama March 8-9 to sign a lengthy and
wordy declaration calling for the negotiation of a Central
America-Panama free trade agreement (FTA) and possibly FTAs
with the European Union and CARICOM. Panamanians mostly do
not consider themselves part of Central America. Many, if
not most, of the declaration's ambitious-sounding goals will
remain a dead letter in Panama. End summary.

SICA
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2. (U) Since January 2006 Panama holds the "Pro Tempore"
Secretariat --established in the Tegucigalpa Protocol in

SIPDIS
1991-- and hosted the March 8-9 technical, ministerial and
presidential meetings. Joining Panamanian President Martin
Torrijos in the two-day Summit were Presidents Abel Pacheco
(Costa Rica),Enrique Bolaos (Nicaragua),Manuel Zelaya
(Honduras),Oscar Berger (Guatemala),Leonel Fernandez
(Dominican Republic),Prime Minister Said Musa (Belize),and
Vice President Ana V. de Escobar (El Salvador). The purpose
of the gathering was to discuss commercial, energy,
transportation and telecommunications integration. In
addition, the Presidents agreed to coordinate positions for
the May 2007 Presidential Summit between Latin American and
Caribbean countries with the European Union (EU) in Vienna,
where a potential free trade agreement (FTA) between the two
blocks would be discussed.

Does Panama belong or not?
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3. (U) Despite Panama's membership in SICA, Panama does not
belong to SIECA, SICA's equivalent for economic integration
issues. Panama has traditionally felt that its service-
based economy is not compatible with the economies of the
rest of Central America. Also, Panama has not decided
whether to join Central America or the Andean Pact countries
for a potential FTA with the EU or whether it might even
consider a bilateral agreement.


4. (U) The Central American Integration System (SICA) was
established on December 13, 1991, by the governments of
Guatemala, Belize, El Salvador, Honduras, Nicaragua, Costa
Rica and Panama to promote Central American integration.
The Dominican Republic and Taiwan have "observer" status at
SICA. SICA's priorities are to seek Central American
integration for a peaceful, democratic and developed region;
to strengthen free and democratic governments; to define a
new regional security model and determine a means to
overcome extreme poverty through sustainable development,
environmental protection among others.

The Panama Declaration
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5. (U) At the Panama Canal Miraflores Locks, the Chiefs of
State and Government signed a 24-page "Panama Declaration",
as a result of the technical and ministerial meetings held
previous days at Panama's Foreign Ministry. The declaration
states that the presidents:

-- reaffirm their interest in negotiating a Central America-
Panama FTA;

-- instruct Commerce Ministers to explore the possibility of
an FTA with the CARICOM countries;

-- declare the intention of launching negotiations for
Central American-European Union FTA;

-- highlight the importance of the democratic process in
Haiti for Latin America and the Caribbean;

-- congratulate the United Nations, the Organization of
American States and the Group of Friends of Haiti for the
strong support provided in favor of Haiti's democratic
system;

-- reconfirm the May 2006 Energy Summit in the Dominican
Republic to study the possibility of a Central American
refinery;

-- strengthen the Central American integration process by
increasing mobility among its peoples, including the
potential elimination of immigration controls at border
points;

-- declare their satisfaction with the construction of the
Guatemala-Panama electrical line;

-- adopt by June 2006 an agreement to reconcile tax systems;

-- commit to a future agreement for the creation of a
Central American Customs Union;

-- promote ratification of the protocol amending the Central
American Court of Justice;

Comment
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6. (SBU) Most Panamanians do not consider themselves
Central Americans. Regardless of the efforts by this and
previous GOPs to get closer to Central America, the average
Panamanian does not care. Last week's could be considered a
"summit of illusions". Besides a nice-looking group photo
of the Chiefs of State and Government with the Canal locks
as background, the local perception is that nothing
substantive was achieved. No one was surprised by the
result: a mere wordy and extremely ambitious document that
carries no weight.
Eaton