NEGROPONTE AND TORRIJOS DISCUSS TPA, BIOFUELS,

C O N F I D E N T I A L PANAMA 000787

SIPDIS

SIPDIS

DEPT FOR WHA/CEN - TELLO
ALSO FOR WHA/EPSC - SALAZAR AND MARTILOTTA
ALSO FOR EB/TPP/BTA - LAMPRON
STATE PASS USTR FOR SCHWAB, VERONEAU, EISSENSTAT, AND MALITO
USDOC/MAC FOR GAISFORD

E.O. 12958: DECL: 05/15/2017
TAGS: ETRD ECON PREL PGOV ENRG UNSC OAS PM
SUBJECT: NEGROPONTE AND TORRIJOS DISCUSS TPA, BIOFUELS,
UNSC, AND OAS


Classified By: Ambassador William A. Eaton - Reasons 1.4(b and d)


1. (C) Summary. In a May 11 call on Panamanian President
Martin Torrijos, Deputy Secretary of State John D. Negroponte
and President Torrijos discussed the commercial and strategic
importance of pending free trade agreements with Colombia,
Peru, and Panama. They also discussed the potential of
biofuels in promoting energy independence and creating jobs.
The Deputy Secretary praised the GOP for its cooperation with
the U.S. on counternarcotics and at the UN Security Council
(UNSC) and for its successful redevelopment of former U.S.
military installations in Panama. Torrijos and Negroponte
looked ahead to the June 3-5 Organization of American States
General Assembly (OASGA) in Panama, with questions about the
possible participation (and intentions) of Venezuelan
President Hugo Chavez. End summary

GOP Agrees on Strategic Importance of FTAs
--------------


2. (C) In a May 11 Presidential Palace meeting, the Deputy
Secretary and President Torrijos concurred that free trade
agreements are commercially, as well as strategically, vital
for the region. The Deputy Secretary said that ratification
of the Colombia, Peru, and Panama deals would be a big
advance toward creating a bloc in the hemisphere of countries
committed to democracy and open markets. He stressed that
failure to deliver on these agreements would be perilous for
the region and, in particular, for Colombia. Torrijos agreed
and said that Panama would push hard for U.S. ratification of
its own bilateral Trade Promotion Agreement (TPA),as well as
the other deals still pending before Congress, precisely
because of their strategic importance. He said that the GOP
had developed "good working relationships" with Congressional
Democrats, as well as with the AFL-CIO, and that he had
counseled Colombian President Alvaro Uribe to do likewise.
The Deputy Secretary said that Uribe was "a hope for
democracy"
in Colombia and that failure to ratify the U.S.-Colombia FTA
would be "a severe blow."


3. (SBU) Torrijos hailed as "good news" the May 10
announcement by Democratic Congressional leaders and USTR on
the outlines of a way forward on trade, labor, and
environmental issues. Neither he nor Trade Minister
Alejandro Ferrer foresaw much difficulty in Panama's ability
to accommodate the labor and environment provisions set forth
in the May 10 package. Ferrer stressed the GOP's hope that
the U.S. International Trade Commission (ITC) would finish
its report on the TPA's impact well ahead of its scheduled
September 12 completion date. First Vice President/Foreign
Minister Samuel Lewis Navarro said that he would visit
Washington early the week of May 14 with a group of about ten
Panamanian and American business leaders to lobby for the
TPA. He hoped to meet with, among others, House Ways and
Means Chairman Charles Rangel.

Biofuels Offer Promise for Energy Independence & Jobs
-------------- --------------


4. (SBU) The Deputy Secretary asked Torrijos about biofuels
in Panama. Torrijos said the GOP hoped the TPA, together
with the development of biofuels, might spur much-needed jobs
growth in Panama's sugar industry. Lewis added that the GOP
saw biofuels as potentially significant, both in terms of
energy independence and in offering "big opportunities" for
Panama's impoverished rural areas. The Deputy Secretary
agreed, recalling his prior service in Honduras, where he saw
how important the sugar industry was to creating rural jobs.


5. (C) Noting President Bush's mention of an emerging
U.S.-Brazil biofuels deal during the Torrijos-Bush Oval
Office meeting earlier this year, Lewis said that Torrijos
planned to visit Brasilia in late May with the hope of
signing an offshoot bilateral deal with Brazil on biofuels
development. Assistant Secretary Shannon noted that, as
neither the U.S. nor Brazil could meet domestic demand for
biofuels, Central American countries could play a significant
role as suppliers.

UNSC's Kosovo Issue; Singapore-Panama Ties
--------------


6. (C) The Deputy Secretary thanked Torrijos for the GOP's
"good cooperation" on international security, including
counternarcotics and law enforcement, and as a fellow UNSC
member. Torrijos chuckled at how Panama's emergence as the
region's consensus pick for the UNSC late last year came as
"a big surprise." He noted that he took a May 10 call on
Kosovo issues from UN Secretary General Ban Ki-moon. Lewis
added that the key on Kosovo would be to discourage Russia
from exercising its veto and, after his recent visit to
Moscow, he saw "space for Russia to hold back" on its veto.


7. (C) Torrijos beamed when the Deputy Secretary mentioned
Panama's "good redevelopment" of former U.S. military
installations. He cited the conversion of SOUTHCOM's old
Headquarters into a node for R&D activities and UN agencies
(i.e., the "City of Knowledge" complex). Torrijos also said
that the GOP recently awarded a $400 million, eight-year deal
to a British firm (London & Regional) for the master planning
and redevelopment of the former Howard Air Force Base site.
Ferrer added that a Singaporean firm had already set up an
aircraft maintenance and repair operation at Howard that
would receive its first aircraft in May. The Deputy
Secretary suggested that a Singapore-Panama connection offers
Panama an important "window to Asia." Torrijos agreed and
recounted growing Singapore-Panama ties, including a recent
visit by Singapore's Prime Minister and growing bilateral
cooperation on ports, energy, and telecommunications.

OAS General Assembly: What does Hugo Want?
--------------


8. (SBU) Turning to the June 3-5 OASGA in Panama, the Deputy
Secretary noted that Secretary Rice looked forward to
participating. Lewis said that the GOP was enthused about
health-related activities planned in connection with the
OASGA, such as the launch of a Regional Healthcare Worker
Training Center (an HHS-GOP brainchild) and the OASGA's
consideration of a "Health Agenda for the Americas."


9. (C) Torrijos added that Venezuelan President Hugo Chavez
had indicated an interest in attending the OASGA. Torrijos
acknowledged that this would be a protocol and a political
problem. The OASGA is a ministerial-level assembly; aside
from the host country, heads of government or state do not
attend. Also, Torrijos said he assumed that the purpose of
Chavez's attendance would not be positive. He noted, "I am
not a psychiatrist, so I cannot figure out what Hugo is
thinking;" but, "I am waiting to see what Hugo wants."
Torrijos said he is planning a trip to Brazil in late May.
If Chavez persists in his desire to attend the OASGA,
Torrijos said, he would stop in Caracas on the way back from

Brazil to try to dissuade him.


10. (U) This message was cleared by the Deputy Secretary's
delegation.
EATON