PANAMA/CUBA RELATIONSHIP: LIBERTAD ACT RESPONSE

C O N F I D E N T I A L PANAMA 001831 SIPDIS SIPDIS FOR STATE WHA/CEN - TELLO FOR STATE WHA/CCA E.O. 12958: DECL: 12/01/2014 TAGS: ETRD ETTC PREL CU SUBJECT: PANAMA/CUBA RELATIONSHIP: LIBERTAD ACT RESPONSE REF: A. STATE 158768 ¶B. PANAMA 834 Classified By: Classified By: Econ Counselor Timothy Lattimer for Reaso ns 1.4(b)(d) ¶1. (U) Post provides the following information in response to Ref. A request. Responses are keyed to the specific questions identified in Ref. A. Ref. B is Post's information covering the December 2006- May 2007 time period. Post's answers to REFTEL A questions are based on information obtained from the GOP's Comptroller General's offices, the GOP Ministry of Foreign Relations, the administrative offices of the Colon Free Zone, various industry and third country publications, and conversations with various Panamanian business executives. -------------- Nature of Panamanian Investments in Cuba -------------- ¶2. (C) Question 1: What are the nature of investments (and names, if known) that host country businesses have in Cuba? ¶3. (U) According to an investment study prepared by Spain's Society for Industrial Promotion and Reconversion (SPRI),of the 43 foreign companies operating in Cuba, six are Panamanian. ¶4. (U) The SPRI study states that Panamanian companies participate in 18 cooperative production projects in Cuba, second only to Spain, which has 29 such projects. ¶5. (U) Panama-based Copa Airlines maintains offices in Havana and has approximately 20 weekly non-stop flights from Panama City to Havana. On November 16, 2007, Copa Airlines announced that commencing in May 2008 it will increase its service to Havana to four daily non-stops (for a total of 28 flights per week). According to Panamanian business executives, Copa Airlines is the only major Panamanian company operating in Cuba. ¶6. (U) According to the GOP's Ministry of Commerce and Industry (MICI),Panamanian exports to Cuba declined from a high of $4.3 million in 1998 to $469,590 in 2005. Panamanian exports to Cuba rebounded during 2006, totaling $1.0 million. During the first six months of 2007, Panama exported $1.4 million worth of goods to Cuba; of which $920,000 was paper and cardboard products. During all of 2006, Panama exported only $152,300 worth of paper and cardboard products to Cuba. Other exports to Cuba are cosmetics, beauty supplies, juices, vegetable extracts, and aluminum. ¶7. (U) According to MICI, Cuban exports to Panama have ranged from a high of $1,151,673 in 2000 to a low of $142,877 in ¶2002. However, during 2006 Cuban exports to Panama jumped to $20.7 million; of which $19.9 million was clinker (the principal ingredient in most cement products),principally for use in Panama's booming construction industry. During the first six months of 2007, Cuba exported $12.2 million worth of goods to Panama; of which $11.8 million was clinker.. ¶8. (SBU) The bulk of Panamanian/Cuban commerce occurs through Panama's Colon Free Zone (CFZ). According to the Administrative Office of the CFZ, of the approximately 2,400 companies operating in the CFZ, approximately 95 do business with Cuba. Cuban companies and Panamanian shell companies owned by Cubans or the GOC use the CFZ as a transit point to import U.S. and other goods to Cuba to circumvent the U.S. trade embargo. As of 2004 (the most recent data available),Cuban companies owed various companies in the CFZ approximately $200 million for goods previously delivered. According to the CFZ, approximately, $195 million of goods were re-exported to Cuba during 2004. ¶9. (U) The GOP does not compile statistics on the amount of foreign direct investment made by Panamanian companies in other countries. -------------- Bilateral Trade Agreements -------------- ¶10. (C) Question 2: Are there bilateral trade agreements between the host country and Cuba? ¶11. (U) On January 27, 1999, the GOP, under then-President Ernesto Perez Balladares' Administration, and GOC signed an Agreement for the Reciprocal Promotion and Protection of Investments that, among other things, guaranteed that each country would grant the other investment protections and rights no less than those received by any other third country. ¶12. (U) On August 31, 2000, the GOP, under then-President Mireya Moscoso's Administration, and GOC signed an Agreement Relating to Airlines Services between their Respective Territories and Onward Destinations. ¶13. (U) On November 5, 2007, under current President Martin Torrijos, the GOP and GOC signed two transportation agreements. One agreement increased the number of commercial flights between Panama and Cuba (see paragraph 5). The other was a maritime agreement providing for information exchange, marketing studies, training, employment exchange and modernization. -------------- Exchange Programs -------------- ¶14. (C) Question 3: Are there any exchange programs between host country and Cuba, including but not limited to: scholarships for host country national to study in Cuba; Cuban-paid medical travel for host country nationals; and Cuban doctors working in host country? ¶15. (U) On February 16, 1999, the GOP, under the Perez Balladares Administration, and the GOC signed an Agreement for Cultural and Educational Cooperation. ¶16. (U) On March 17, 2006, the GOP, under current President Martin Torrijos' Administration, and the GOC signed a Memorandum of Understanding eliminating the need for visas to travel between Panama and Cuba for persons holding diplomatic, official, consular or special passports. The Memorandum of Understanding stated that the purpose of eliminating the visa requirement was to facilitate travel and exchanges between officials of both countries in order to contribute to an expansion in bilateral cooperation. ¶17. (U) The GOP actively supports the GOC's Operation Miracle (Operacion Milagro) eye surgery program. According to the GOP, approximately 15,000 Panamanians have been treated by Cuban doctors in Panama and in Cuba. The GOC sponsors both free travel to Cuba and free eye care. Operation Miracle has received the active personal support of First Lady Vivian Fernandez de Torrijos, who has traveled to the airport to visit Panamanians departing for Cuba. The First Lady, along with GOP Vice Minister of Health Dora Jara, has supervised and coordinated all Operation Miracle activities. The GOC has two eye doctors working in Panama on a rotating basis. These doctors perform pre-screening of Operation Miracle patients at GOP health facilities. Both GOP and GOC officials frequently discuss expanding the reach of Operation Miracle in Panama. The GOP praised Operation Miracle, in presidential speeches (including President Torrijos' annual September 1 "state of Panama" speech),by sponsoring full-page newspaper ads extolling the virtues of Operation Miracle, and on the websites of its various government agencies. The GOP listed Operation Miracle as one of the Torrijos Administration 's greatest accomplishments in a full-page GOP-paid ad regarding its social development achievements. On March 2, 2007, GOP FM Samuel Lewis Navarro and GOC FM Felipe Perez visited the jointly-operated Panamanian-Cuban Eye Surgery Treatment Center in Veraguas, Panama to highlight the work of Operation Miracle. ¶18. (U) Panama and Cuba have student exchange programs. There are currently approximately 400 Panamanian medical students at the Latin American School of Medicine in Cuba. ¶19. (U) On November 5, 2007, Cuban FM Felipe Peres Roque promised to send 100 Cuban sport trainers to Panama between January and March, 2008. See paragraph 24. ¶20. (U) The GOC also provides the GOP with a literacy program in Panama called "Si Yo Puedo" (Yes I Can). -------------- Promotion of Democracy and Human Rights -------------- ¶21. (C) Question 4: Has the host country, in Post's opinion, worked to promote the advancement of democracy and human rights in Cuba? This can include: public statements or other governmental actions, such as resolutions in the national assemblies condemning human rights abuses in Cuba; statements in support of democracy following the July 31, 2006 handover of power from Fidel to Raul Castro; actions in support of civil society in Cuba through host country's diplomatic missions or other fora. ¶22. (C) The GOP has not made any public statements in support of democracy or human rights in Cuba during 2007. The GOP appears to have done little to support the advancement of democracy or human rights in Cuba. The GOP is strengthening its relationship with Cuba through increased government-to-government contact and through exchange programs such as Operation Miracle. The GOP does not support any proactive steps to further democracy upon President Castro's death or as a result of the transfer of power to Raul Castro. While it claims to press the GOC in private to facilitate democracy on the island, the GOP in its conversations with USG officials emphasizes the need for stability in Cuba and downplays encouraging democracy. The GOP, however, advocates lifting the USG trade embargo on Cuba. -------------- Diplomatic Visits -------------- ¶23. (C) Question 5: Have there been any high-level diplomatic visits between Cuba and host country in the past six months? ¶24. (U) On November 4- 5, 2007, GOP First Vice President and Foreign Minister Sameul Lewis Navarro lead the GOP delegation to the XXV International Fair of Havana. GOP officials included Fernando Soloranzo, Administrator of the Panamanian Maritime Authority and Carmen Gislea Vergara, Vice Minister of the Ministry of Commerce and Industry. Navarro and Cuban Vice President Carlos Lage inaugurated the fair. Navarro also met with Cuban Chancellor Peres Roque. ARREAGA