CODEL COSTELLO MEETS PRESIDENT TORRIJOS

UNCLAS PANAMA 000123 SENSITIVE SIPDIS C O R R E C T E D COPY - NAME IN SUBJECT CHANGED E.O. 12958: N/A TAGS: EAIR ECON ETRD EWWT OREP PGOV PM PREL SUBJECT: CODEL COSTELLO MEETS PRESIDENT TORRIJOS -------------- SUMMARY -------------- ¶1. (SBU) Summary. CODEL Costello, composed of members of the House Committee on Transportation and Infrastructure, called on President Martin Torrijos Espino during the afternoon of February 2 to discuss transportation and the overall bilateral relationship. During the cordial meeting, Torrijos emphasized Panama's growth and the excellent and synergistic relationship it enjoys with the United States. CODEL members thanked Torrijos for Panama's cooperation, with Chairman Costello emphasizing, "We have a great relationship, and we want to build on it." Other members expressed concern over a proposed transit fee hike for the Panama Canal. During the closing gift exchange/photo-op. Torrijos mentioned the pending U.S.- Panama Free Trade Agreement (FTA),stating, "It would seal our common future." The delegation, as part of their transportation-focused itinerary on February 2, also traveled to the Miraflores Locks on the Panama Canal for a briefing on Canal expansion and tour of operations, the Panama Ports facility, Maersk shipping representatives delivered a briefing at that facility. Ambassador Stephenson hosted both a country team briefing and reception for the visitors. End summary. -------------- PARTICIPANTS -------------- ¶2. (SBU) U.S. participants in the Presidential Palace meeting were: Ambassador Stephenson and members of the House Committee on Transportation and Infrastructure led by Aviation Subcommittee Chairman. Jerry Costello (D-IL). Committee members also included Rep. John Duncan (R-TN),Rep. Solomon Ortiz (D-TX),Rep. Tim Holden, (D-PA),Rep. Eddie Bernice Johnson (D-TX),Rep. Steve LaTourette (R-OH),Rep. Henry Brown (R-SC),and Rep. Dan Lipinski (D-IL). President Martin Torrijos Espino and First Vice President and Foreign Minister Samuel Lewis Navarro comprised the Panamanian side. -------------- BUILDING ON A "GREAT" RELATIONSHIP -------------- ¶3. (SBU) After a brief welcome by President Torrijos, Chairman Costello noted growth in Panama since his last visit over a decade ago. Costello praised Panama's stewardship of the Canal and stressed, "We have a great relationship and want to further build on it," adding, "Your excellent cooperation has not gone unnoticed." ¶4. (SBU) Responding to his guest, Torrijos noted "extraordinary cooperation" in many areas, including narco-trafficking, terrorism, and organized crime. He emphasized that these threats were common to both countries and others in the region and could only be effectively combated by coordinated action. He also showcased Panama's recent tenure on the United Nations Security Council as a bridge builder. "It was quite an experience, but we are done," said Torrijos in a voice of both pride and relief, evoking a chuckle among all participants. -------------- CANAL EXPANSION -------------- ¶5. (SBU) Turning to his second major theme, President Torrijos touted Panama's Canal expansion plans and overall economic growth as beneficial for the United States and all of the Americas. He stated, "The Canal will be ready for a world economic turnaround" and expressed pride in the fact that Panama - contrary to conventional advice - eschewed commercial financing and achieved multilateral financing totaling $2.3 billion in the midst of the global financial crisis. Torrijos confidently predicted that Panama's GDP growth for 2009 would be 5 percent in a worst case scenario. He cited Panama's 9 percent GDP growth in 2008 along with reductions over the past five years in poverty (from 38 to 29 percent),extreme poverty (from 19 to 12 percent) and unemployment (from 12 to under 6 percent). Reinforcing the theme of mutual economic interests, Torrijos noted that much of the nearly $2 billion in foreign direct investment in Panama came from the United States and that the bilateral relationship will continue to intensify as Panama continues to integrate itself into the logistics systems of the U.S. "We have a bright future together, "Torrijos concluded. -------------- OTHER TOPICS AND TORRIJOS EXTOLS FTA -------------- ¶6. (SBU) Torrijos opened the discussion to individual members of the CODEL. Representatives LaTourette and Bernice Johnson expressed concern about proposed Canal toll hikes, prompting a reply from Torrijos that the Canal will help the competitiveness of the entire region, with the expansion providing new economies of scale, adding that sea-to-sea transport remains the least expensive mode. Representative LaTourette also noted his interest in the pending Panama- Argentina civil aviation agreement, elaborating that Continental Airlines and Panama's Copa Airlines - which have a codeshare agreement - had heretofore been treated as one carrier by the Argentines. Representative Ortiz mentioned his long association with Panama, recalling his fishing trip with President Torrijos' father, the late Omar Torrijos. ¶7. (SBU) Torrijos concluded by revisiting his vision of Panama as the hemisphere's logistics center and how the efficiency of this center benefited the United States. He mentioned marquee planned projects that were awaiting financing and final approval such as the second round of Tocumen Airport expansion and the OXY/Qatar refinery, which at roughly $15 billion would be the largest investment in Panama dwarfing the $5.25 billion Canal expansion. Torrijos extolled the benefits to the region of Copa Airlines expansion, including the purchase by Copa of 12 Boeing 737 aircraft this year from orders that had been dropped by other carriers. During the closing gift exchange/photo-op, President Torrijos made a late, yet forceful argument for the pending U.S.- Panama Free Trade Agreement (FTA),stressing its advantages to U.S. exporters and asserting, "It would seal our common future." ¶8. (SBU) The delegation, as part of their transportation-focused itinerary on February 2, also traveled to the Miraflores Locks on the Panama Canal for a briefing on Canal expansion and tour of operations, the Panama Ports facility, and a briefing at that facility by Maersk shipping representatives. Ambassador Stephenson hosted both a country team briefing at the start of the day and reception for the visitors to conclude their visit. STEPHENSON