COLOMBIA TO SIGN TRADE/INVESTMENT AGREEMENTS WITH

UNCLAS SECTION 01 OF 02 BOGOTA 004178 SENSITIVE SIPDIS STATE PASS USTR HARMAN EEB/TPP MUNTEAN WHA/EPSC ROONEY WHA/AND MERRIN E.O. 12958: N/A TAGS: ECON ETRD ECIN PREL APEC CO SUBJECT: COLOMBIA TO SIGN TRADE/INVESTMENT AGREEMENTS WITH CANADA AND CHINA AT APEC SUMMIT REF: A. BOGOTA 2459 ¶B. BOGOTA 2120 BOGOTA 00004178 001.2 OF 002 ¶1. (SBU) SUMMARY. Colombia plans to sign its Free Trade Agreement with Canada as well as a Bilateral Investment Treaty with China on the margins of the APEC Summit in Lima, Peru, November 22-23. Colombia will also use the occasion to formally accept an invitation from the P4 to begin accession negotiations. While not an APEC member, Colombia participates in several working groups and hopes to use the Summit to raise the profile of its candidacy to eventually join APEC. Colombia's ambitious economic agenda for the APEC Summit shows its seriousness about expanding trade and investment ties beyond traditional partners. END SUMMARY. MOVING AHEAD WITH CANADA -------------- ¶2. (SBU) President Uribe, accompanied by Foreign Minister Jaime Bermudez and Trade Minister Luis Guillermo Plata, will lead the GOC delegation to Lima. On November 23 Colombia and Canada will sign their bilateral Free Trade Agreement (FTA) and accompanying side agreements on labor and environment. There is a possibility they will sign a double taxation treaty as well. The two sides closed FTA negotiations last June (Ref B) and have completed the required legal scrub. According to Vice Minister of Trade Eduardo Munoz, the required approvals by the Colombian Congress and, subsequently, the Constitutional Court could take as long as six months each, implying entry into force toward the end of ¶2009. Canada is already growing in importance as a source of Colombian imports (ranked 13th in 2007) and the FTA will only make Canadian exports to Colombia more competitive. STRENGTHENING TIES WITH CHINA -------------- ¶3. (U) Colombia will also sign a Bilateral Investment Treaty (BIT) with China on the margins of the APEC Summit. While growth in bilateral trade has been heavily skewed toward imports from China (currently Colombia's second largest source of imports),and an FTA with China unlikely in the near term, Colombian companies are showing increasing interest in China as an investment destination (Ref A). The BIT will solidify this interest and deepen economic links between China and Colombia. REACHING ACROSS THE PACIFIC -------------- ¶4. (SBU) According to Munoz, President Uribe will use his meeting with leaders of the four current members of the Trans-Pacific Strategic Economic Partnership (P4) -- Brunei, Chile, New Zealand, and Singapore -- to formally accept their invitation to begin accession negotiations in parallel with the U.S., provisionally scheduled for March 2009. Colombian interlocutors on trade issues often lament the head-start that Chile and, increasingly, Peru enjoy in trade agreements with Asia, and hope the agreement with the P4 will help spur further efforts to diversify Colombia's trade toward Asia. COLOMBIA: AN ACTIVE NON-MEMBER OF APEC -------------- ¶5. (SBU) While Colombia is not a member of APEC, President Uribe was invited to give the keynote address to a group of private sector leaders. Colombia has made no secret of its desire to be "first in line" once APEC's moratorium on new BOGOTA 00004178 002.2 OF 002 members ends. Colombia has participated in several APEC Working Groups and Expert Groups in the past, and, according to Munoz, has renewed its commitment to being an active participant in the Investment and Energy Groups. Colombia hopes to leverage its APEC involvement and eventual membership to further increase its international economic profile. COMMENT: IS WASHINGTON PAYING ATTENTION? -------------- ¶6. (SBU) Colombia has made no secret of its intent to diversify international markets, with trade presently weighted heavily toward the U.S. and Venezuela. The stalled FTA with the U.S., and Venezuela's unstable political/economic climate, have served to quicken the pace of GOC trade diplomacy. The EU's recent decision to negotiate directly with Colombia, Peru, and possibly Ecuador received much domestic fanfare. These negotiations will likely begin in earnest at the beginning of 2009 and officials remain nominally committed to concluding talks by September, 2009. Munoz told us that the GOC goal was to have 90 percent of Colombia's exports fall under the auspices of a free trade agreement by 2010--a goal that necessarily requires an the U.S. agreement to be in force. While the formal attention on November 23 will be centered in Lima, Bogota, Ottawa and Beijing, the GOC is hoping that ears will be perking up in Washington as well. BROWNFIELD