Identifier
Created
Classification
Origin
08PORTOFSPAIN144
2008-03-25 20:07:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Port Of Spain
Cable title:  

SCENESETTER FOR VISIT OF WHA DIRECTOR OF CARIBBEAN AFFAIRS

Tags:  PREL EPET SENV PGOV PTER TD 
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VZCZCXYZ0000
RR RUEHWEB

DE RUEHSP #0144/01 0852007
ZNR UUUUU ZZH
R 252007Z MAR 08
FM AMEMBASSY PORT OF SPAIN
TO SECSTATE WASHDC 9065
UNCLAS PORT OF SPAIN 000144 

SIPDIS

SENSITIVE

SIPDIS

STATE FOR WHA/CAR

E.O. 12958: N/A
TAGS: PREL EPET SENV PGOV PTER TD
SUBJECT: SCENESETTER FOR VISIT OF WHA DIRECTOR OF CARIBBEAN AFFAIRS
VELIA DE PIRRO

SENSITIVE BUT UNCLASSIFIED; PLEASE PROTECT ACCORDINGLY

UNCLAS PORT OF SPAIN 000144

SIPDIS

SENSITIVE

SIPDIS

STATE FOR WHA/CAR

E.O. 12958: N/A
TAGS: PREL EPET SENV PGOV PTER TD
SUBJECT: SCENESETTER FOR VISIT OF WHA DIRECTOR OF CARIBBEAN AFFAIRS
VELIA DE PIRRO

SENSITIVE BUT UNCLASSIFIED; PLEASE PROTECT ACCORDINGLY


1. (U) Embassy Port of Spain warmly welcomes your April 5-9 visit to
Trinidad and Tobago (T&T). Your trip presents an opportunity to
reinforce engagement with T&T, building on the goodwill generated by
last June's Conference on the Caribbean and in advance of next
year's Summit of the Americas meeting. T&T is important to
America's energy security, having supplied more than two-thirds of
U.S. imports of liquefied natural gas (LNG) over the last five
years. It also has been expanding its political and economic
influence in the region, leveraging its dynamic and prosperous
economy. Trinidad, however, also is coping with an upsurge of crime
driven, at least in part, by narcotics trafficked from the South
American mainland. While T&T sometimes differs with the USG on
foreign policy matters, it is a friend, ally and strong supporter of
hemispheric free trade.


2. (U) This cable provides a brief overview of the country and look
at potential topics that will be covered during your stay. Meetings
with the Ambassador and Country Team shortly after your arrival will
provide further information and the opportunity to discuss issues at
length.

--------------
POLITICAL SNAPSHOT
--------------


3. (U) Prime Minister Manning' People's National Movement (PNM)
party retained its parliamentary majority when the citizens of
Trinidad and Tobago voted on November 5, 2007. The PNM won 26 seats
to the opposition United National Congress' (UNC) 15 slots. The
year-old Congress of the People (COP) party contested the election
as well, but won no seats. The PNM and UNC parties are heavily, but
not exclusively, based on ethnicity, with the PNM supported largely
by Afro-Trinidadians and the UNC by Indo-Trinidadians. The COP also
draws mostly from Indo-Trinidadians, though it consciously sought
(as did the other parties) in the last election to cross ethnic
lines.


4. (SBU) Manning first served as Prime Minister from 1991 to 1995,
when the PNM lost its parliamentary majority to the UNC and Basdeo

Panday became Prime Minister. An electoral deadlock in 2001
eventually led to the return of Manning and the PNM. With a secure
majority in Parliament, Manning need not call another election until

2012.

--------------
ECONOMIC SNAPSHOT
--------------


5. (U) T&T has a vibrant industrialized economy, buoyed by
relatively large natural gas reserves. It is our largest trading
partner in the Caribbean and the leading beneficiary of Caribbean
Basin Initiative trade preferences. T&T is experiencing strong GDP
growth, averaging 9.8% over the last five years, as a result of high
prices for oil and gas. While fiscal policy has generally been
restrained, rising spending coupled with a tight labor market have
contributed to rising inflation, which reached 10 percent
year-on-year in October 2006, moderated to 7.9 percent in August
2007, and climbed back to 10 percent as a result of wage agreements
concluded on the eve of November's national elections. T&T is
considered a low-risk investment destination. The T&T dollar
remains stable in value against the U.S. dollar (at about
6.25/dollar),contributing to the country's attractiveness to
foreign investment. Standard & Poor's raised its credit rating for
T&T to A- in 2005 and confirmed that rating in 2006 and 2007. GOTT
regularly courts foreign investors, with U.S. companies often taking
the lead.

--------------
A CLOSER LOOK AT ENERGY
--------------


6. (U) Oil was discovered in Trinidad in the mid-19th century, and
the local energy industry is celebrating the 100th anniversary of
commercial oil production in 2008. After riding the oil boom and
bust cycle of the 1970s and 1980s, Trinidad and Tobago has made a
major transition over the last ten years to an economy driven
largely by natural gas, both for export and for consumption in
domestic industries, attracting major foreign-investment projects in
liquefied natural gas (LNG),petrochemicals and steel. T&T also
continues to play a role in regional energy security, supplying
refined petroleum products to the rest of the Caribbean, although
competition from Venezuela backed by concessionary financing is
eroding its regional market share.


7. (SBU) USG interest in energy security centers on imports of LNG
from Trinidad, which has supplied two-thirds of U.S. LNG imports
over the past five years. While LNG accounts for only 10 percent of

U.S. overall natural gas imports, T&T's supply plays a critical role
in East Coast markets from New England to Louisiana. For this
reason, USG agencies recently conducted a vulnerability assessment
aimed at improving protection of critical infrastructure in T&T's
energy sector, an initiative that enjoyed full cooperation from the
GOTT and energy sector companies. The GOTT is also working with DOE
and SouthCom to host a regional energy infrastructure protection
conference in Port of Spain, currently planned for May 14-15.


8. (U) Atlantic LNG, the country's sole producer, is a consortium of
companies including BP (which absorbed Amoco several years ago),
British Gas, Repsol, Suez (which bought out Cabot's interests in
2000),and the local National Gas Company (NGC). In 2005, Atlantic
LNG completed Train 4, the largest ever built, expanding ALNG's
production capacity from 10 million to 15 million tons per year.
U.S. construction company Bechtel International was the primary
contractor on the Train 4 project, and GE Oil & Gas has an ongoing
service contract.


9. (U) While the GOTT is studying the feasibility of constructing a
fifth LNG train, possibly to supply Caribbean and other regional
markets, prospects depend on developing new gas reserves. 2006 and
2007 saw few significant discoveries and limited interest from
international energy companies in bidding for rights to explore
unassigned deep water blocks, fueling concerns that new discoveries
are not keeping pace with utilization. These concerns increased
with the August 2007 release of an independent audit of gas reserves
showing the ratio of proven reserves to current production at 12
years as of January 2007, down from previous estimates of 15-20
years. In January 2008, two Canadian companies announced
discoveries in T&T waters, with additional reserves estimated at
roughly one more year's worth of gas consumption. The GOTT is
optimistic that other planned exploratory wells will find more gas;
at the same time it is preparing to offer more favorable financial
terms in the offshore bid rounds it has scheduled for 2008 and

2009.


10. (SBU) The best near-term prospect for raising production is from
several large gas fields that cross T&T's maritime border with
Venezuela. Talks between the two governments on joint development
made significant progress in 2006-07, culminating in the signing of
a framework unitization agreement on March 20, 2007, during a visit
to Caracas by Prime Minister Manning. The agreement sets out the
legal terms for ownership and development of the cross-border
fields, but it does not specify on which side of the border the gas
will be monetized, nor for what purpose. The largest of these
fields is estimated at 10 trillion cubic feet (TCF),of which 2.7
TCF are assigned to T&T. Chevron has interests in this field on
both sides of the border. Progress on reaching a field-specific
accord with Venezuela has been stalled since June 2007; the T&T
Minister of Energy stated publicly in February 2008 that efforts are
under way to revive negotiations.


11. (U) The government also is focused on developing gas-based
downstream industries, in order to diversify the energy and metals
industries and facilitate the growth of manufacturing. Trinidad and
Tobago is already a world-class producer of ammonia and methanol,
with significant U.S. investment in several plants. New projects
would add steel, aluminum, ethylene and polypropylene production.
However, ALCOA's proposal to construct a 341,000 ton/year aluminum
smelter met with unprecedented resistance from local environmental
activists, culminating in the Prime Minister's late 2006
announcement that the smelter had been put on hold pending agreement
on a new site. Anti-smelter activists have since turned their
energies toward blocking Alutrint, a smaller proposed aluminum
smelter with 60% GOTT and 40% Venezuelan private ownership, as well
a new steel mill to be constructed by India's Essar Steel. It
remains to be seen whether U.S. company Westlake Chemical will meet
similar resistance to its proposed $1.5 billion ethylene plant,
slated for completion by 2011.

--------------
LABOR AND TRADE UNIONS
--------------


12. (SBU) Trade unions have at times been at odds with GOTT efforts
to increase competitiveness. In one example, after years of
thwarted negotiations with the airline workers' union, the GOTT took
the drastic step in 2006 of closing down BWIA, the unprofitable
national carrier, and creating a new, downsized entity. It is still
unclear if the new national carrier, Caribbean Airlines, will be
unionized. The Prime Minister suggested last year that the GOTT may
try a similar tactic with the far more powerful Oil Workers Trade
Union (OWTU) in an effort to create a new, unified national
petroleum company to replace the state-owned Petrotrin.

--------------
NARCOTICS TRAFFICKING
--------------



13. (SBU) The country's location just seven miles off the coast of
Venezuela makes drug trafficking a major challenge. Narcotics from
South America transit T&T's waters or move through its airports.
Illegal drug use and trafficking are on the rise. The narcotics
trade is likely linked to the persistently high number of murders
and other violent crimes that plague the country. The government
faces an uphill battle in trying to control these problems,
exacerbated by inadequate border controls, corruption in the police
service and a slow judiciary. T&T's vibrant petrochemical industry
has the potential to provide diverted precursor chemicals for use in
illegal drug production. The country's growing economy and
well-developed banking, communications and transportation systems,
facilitate a significant number of sizeable financial transactions
that can obscure money laundering.

--------------
CRIME
--------------


14. (SBU) Violent crime has been one area of particular concern over
the last several years. T&T saw significant increases in murders
and kidnappings from 2000 until present. In 2007 there were 388
murders, the highest number recorded in any one year. For the first
quarter of 2008, T&T has realized a staggering 93 murders which is
twice as many first quarter 2007. The GOTT has widely been viewed as
unable to effectively address the serious crime problem, partially
due to corrupt and inefficient police, inadequate disciplinary
systems, a slow-motion court system and political intransigence.
This, coupled with perceptions that some criminal organizations
operate relatively freely, has led to a loss of confidence in the
GOTT's ability to solve the crime problem. To date, the crime
situation has not affected foreign direct investment or tourism,
though several local business families have fled the country and
each day, local merchants raise more concern.

--------------
TERRORISM
--------------


15. (SBU) T&T has no significant indigenous terror groups, but some
criminal Muslim organizations remain a concern. T&T has a
considerable Muslim minority, comprising roughly six to ten percent
of the total population, though estimates vary widely. The majority
of Muslims are represented by moderate Islamic organizations, but a
few radical Islamic fundamentalist leaders have reportedly advocated
for actions to be taken against the United States. The most famous
of Trinidad's radical organizations is the Jamaat al-Muslimeen, a
local Afro-Trinidadian group that launched a violent failed coup
attempt in 1990. Over the last few years, however, several radical
splinter groups have emerged. Anti-American sentiments are
sometimes heard even from moderate Muslims, and several of the major
mainstream groups helped to organize protests against U.S. actions
in Iraq in early 2003. T&T is party to eleven of the twelve UN
anti-terror conventions, and in September 2005 passed anti-terrorism
legislation. Elsewhere, T&T has come into compliance with the
International Ship and Port Facility Security Code (ISPS),and the
T&T Central Bank cooperates with post in alerting financial
institutions to potential sources of terrorist finance.

--------------
REGIONAL INFLUENCE AND INTEGRATION
--------------


16. (SBU) PM Manning, bolstered by greater energy revenues and a
strong economy, is seeking to expand T&T's role regionally and
internationally, for example by offering technical assistance to
African oil and gas countries. Closer to home, he is a strong
backer of CARICOM integration and seeks US support for deploying T&T
ships to help patrol the Eastern Caribbean. A move toward regional
integration took place in October 2006 in advance of the Cricket
World Cup Tournament. In his capacity as chairman of CARICOM's
Security Committee, PM Manning signed a Memorandum of Agreement in
Port of Spain with visiting Secretary of Homeland Security Michael
Chertoff, paving the way for an Advance Passenger Information System
(APIS). APIS screened all travelers entering the region for the
tournament.


17. (SBU) In the wake of the brutal 2005 hurricane season, T&T
donated nearly TT$40 million (US $6.67 million) in disaster relief
to islands in the region. It also contributed troops, relief
supplies and volunteer workers almost overnight to the stricken
island of Grenada following Hurricane Ivan. Regional integration in
the form of the Caribbean Single Market and Economy (CSME) is
progressing but far from reality, however, as demonstrated by
periodic political backlash in Jamaica and Barbados over the success
of T&T businesses in penetrating those markets. Furthermore,
Venezuela, through its Petrocaribe program has now replaced T&T as
the Caribbean's largest energy supplier. For its part, T&T has been

contributing US$67 million annually to the CARICOM Petroleum Fund it
set up in 2004 to finance social development projects in
oil-importing member countries. At the most recent CARICOM Heads
meeting in the Bahamas, Manning announced an increase in T&T's
Petroleum Fund contribution as well as US$38 million in new money
for the CARICOM Regional Development Fund.


18. (SBU) Manning also is raising T&T's and the region's profile
internationally by hosting the Fifth Summit of the Americas (SOA) in
April 2009 and the next Commonwealth Summit about six months later.
T&T has assembled a capable team to manage these meetings, under the
experienced leadership of Luis Alberto Rodriguez. While the GOTT
has not yet come to grip with the logistical challenges of the SOA,
bilateral dialogue on themes and concepts for the Summit has been
constructive. T&T's focus on "human prosperity" offers scope for
both U.S. priorities like competitiveness and Caribbean priorities
such as crime and food security. T&T also should be receptive to
U.S. priorities in the two other thematic pillars it has put
forward, energy security and environmental sustainability.

--------------
POLICY DIFFERENCES
--------------


19. (SBU) Though a friend to the U.S., there are areas of policy
difference. Due in part to former President Robinson's role as a
"father" of the International Criminal Court (ICC),T&T was one of
the first ICC signatories. It has not signed an Article 98
agreement with the U.S. and likely never will. While not taken with
the systems in either Venezuela or Cuba, T&T seeks to maintain
positive ties with each of those nations and is an advocate of
dialogue between Washington and Caracas and Havana. T&T, along with
its neighbors, did not recognize Haiti's interim government in the
absence of a CARICOM consensus. T&T also did not support the U.S.
intervention in Iraq, and its media have been openly critical on
this issue. Its voting record at the U.N. also leaves much to be
desired from a U.S. policy perspective, though it is roughly in line
with its CARICOM partners.

--------------
CONCLUSION
--------------


20. (U) T&T remains an important ally, trading partner and regional
leader. It has a well-established and functioning democracy and
regularly cooperates with the U.S. on energy and security matters.
We look forward to facilitating a successful visit to T&T for you.

Austin