UNCLAS PANAMA 001065

SIPDIS

SIPDIS

STATE FOR WHA/CEN TELLO
STATE FOR DRL RIGG
STATE PASS USTR & WHA/EPSC
USTR FOR VERONEU, EISSENSTAT & SHIGETOM

E.O. 12958: N/A
TAGS: ETRD ECON ELAB PM
SUBJECT: TOP PANAMANIAN LABOR COUNCIL ENDORSES TPA


1. SUMMARY. Panama's top labor council reversed course and
voted to endorse the U.S.-Panama Trade Promotion Agreement
(TPA) on June 21, 2007. The Executive Council of the National
Council of Organized Labor (CONATO) voted 4 to 3 to support
the TPA, reversing its earlier opposition in what CONATO
coordinator Marcos Allen described as a "difficult, but
productive and democratic process." GOP chief trade
negotiator Leroy Sheffer said the vote was a significant win
for the GOP. END SUMMARY.

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Big Win for GOP: Labor Council Endorses TPA
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2. (U) On June 21, 2007, CONATO announced that a majority of
its Executive Council, by a 4 to 3 vote, agreed to support
the TPA. The vote was a reversal of CONATO's prior anti-TPA
position.


3. (SBU) CONATO's vote came after a series of meetings over
the past two weeks with GOP trade and labor ministry
officials and private sector leaders, culminating on June 21
with a debate among union representatives and CONATO
officials. Allen told EconCouns that the debate leading up
to the vote was a "difficult, but productive and democratic
process." Each Executive Council member was given two hours
to present their position. Allen told EconCouns that the
change in position resulted because TPA proponents were able
to negate "lies and myths" TPA opponents had promulgated over
the years. Allen also said TPA proponents focused on the
win-win nature of the TPA. Allen said he expected some TPA
opponents would still publicly opposed the TPA but would have
no basis to complain about the fairness of the CONATO vote or
to claim that a majority of its members oppose the TPA. For
example, Juan Jovane, former director of the GOP's Social
Security System and a highly-regarded advisor to CONATO,
argued against the TPA and would likely continue to do so.
Scheffer told EconCouns that the meetings were "intense" and
the vote was a significant win for the GOP.


4. (U) During the meeting, GOP's Minister of Employment and
Labor Development, Reynaldo Rivera, told CONATO officials

that while labor would naturally be worried about worker
rights, "the government of (President) Martin Torrijos will
make no changes to the existing labor code."


5. (U) Among the arguments opposing the TPA were false
claims by Jovane that the TPA would endanger Panamanian food
safety regulations and that the TPA would give the U.S.
preferential rights to obtain contracts for the Panama Canal
expansion. While the food safety issue has been a
long-standing argument against the TPA, the final negotiating
round produce a resolution to the issue which include the
creation of a new Panamanian Food Safety Authority. The TPA,
in reality, only stipulates that U.S. will be able to bid on
Canal expansion contracts on the same terms as other bidders.


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What is CONATO?
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6. (U) CONATO is a federation of approximately 250 Panamanian
labor unions. These unions represent workers in various
industries, such as agriculture, services, manufacturing,
retail and wholesale commerce and transportation. Allen and
other CONATO TPA proponents are expected to attend the TPA
signing in Washington, D.C. on June 28, 2007.

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Radical, Outspoken Union Continues Opposition
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7. (U) National Union of Workers Construction and Similar
Industries (SUNTRACS), which is not part of CONATO, continues
to oppose the TPA. SUNTRACS is the leader union within the
Coordinator of Union Unity (CONUSI). SUNTRACS, primarily a
construction workers union, consists of approximately 40,000
official members and claims to represent over 200,000
workers. SUNTRACS has held numerous protests against other
GOP initiatives, including Social Security System reforms and
the Panama Canal expansion project. In 2005, CONATO expelled
CONUSI, along with SUNTRACS, over a differences with
SUNTRACS' more confrontational negotiating tactics. In the
wake of several losses, however, SUNTRACS is returning to
bread and butter construction union issues, most notably a
campaign calling for enforcement of construction labor safety
norms.

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Comment
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8. (U) COMMENT. While passage of the TPA in the Panamanian
Assembly is widely expected, the CONATO vote is a major
victory for the GOP in winning broad-based support for the
TPA. The GOP has worked hard to include business and labor
in the TPA negotiation process in order to win their support.
The CONATO vote should bolster the standing of MICI Minister
Alejandro "Andy" Ferrer and adds considerable wind to the
GOP's sails heading into the June 28 signing. END COMMENT.
EATON