US embassy cable - 05BOGOTA5217

UNCLAS SECTION 01 OF 02 BOGOTA 005217 
 
SIPDIS 
 
SENSITIVE 
 
DEPT PLS PASS USTR 
 
E.O. 12958: N/A 
TAGS: ETRD, EAGR, CO, FTA 
SUBJECT: THE FTA AGRICULTURAL NEGOTIATIONS AT THE CROSSROADS 
 
 Sensitive but unclassified.  Please protect accoridngly. 
 
1.   (SBU) Summary.  The GOC is now facing increasing 
opposition from the agricultural sector for the FTA as it 
becomes clearer that the agreement will negatively affect the 
interests of some groups.  While these groups, interests are 
being challenged, potential winners are still not clearly 
identifiable, making it difficult for the GOC to build the 
coalition necessary to garner overall support for the 
agreement.   This combined with the political season in full 
swing makes the GOC loathe to risk losing political support 
from any group, especially one as well represented in 
Congress as the agricultural sector.  The GOC seeks some 
movement from the US on procedural issues (a date for the 
bilateral and a procedure for exchanging improved offers) in 
exchange for promises of improved access.  Given the GOC,s 
poor access offers to date, and the reality of their 
political difficulties, we may have much to gain.  It is 
clear, however, that the GOC has dug itself into a hole and 
needs our help in getting out. End Summary. 
 
The current problem 
------------------- 
 
2.   (SBU) Agriculture has long been the most sensitive area 
in the FTA negotiations.  Many believe that former 
agricultural minister Cano was removed from office, at least 
in 
part, because of his resistance to the FTA.  Cano and his 
successor, Andres Arias, have also played to protectionist 
elements in the public statements, although Arias, comments 
have been more balanced.  Given this backdrop, agricultural 
groups have been led to believe that the GOC would fight 
tooth and nail to maintain the current restrictive import 
regime.  Colombian agricultural offers through nine rounds of 
negotiation bore this out.  But it has always been clear that 
the need to build a pro-FTA coalition required the GOC to 
minimize opposition from agricultural interests or risk the 
stillbirth of the whole effort. 
 
3.   (SBU) After the Lima round of negotiations, the GOC 
realized it needed to dramatically improve its agricultural 
offers to close or even save the negotiations.  It had to 
demonstrate its willingness to offer the US improved 
agricultural access similar to what it had offered in the 
industrial sector.  On May 6, the GOC sent forward a series 
of improved offers on some basic grains.  The offers 
represented an improvement, but still offered the US less 
than current access in sectors such as wheat and soybeans 
where imports accounted for over 90 percent of the market. 
Local agricultural groups, surprised by the GOC,s movement, 
opposed the plan. Hoping to send a positive signal, GOC 
negotiators sent the proposals forward and unleashed a 
firestorm of opposition.  It is worth noting , however, that 
the Mercosur countries were able to negotiate improved access 
in these sectors, so access at least equal to their access is 
necessary or US exporters could find themselves at a 
structural disadvantage. 
 
4.  (SBU) A drumbeat of local criticism began immediately and 
has gathered force.  It focused on the GOC's positive 
overture without a corresponding movement from the US.  At 
Lima, the US had offered Colombia a TRQ for tobacco that 
matched 2004 exports, and the US offers across the board 
sought to better current access.  However, these offers were 
dismissed outright, as the GOC had aspirations of not the 
current 1000 tons of exports, but 30,000 tons.  The GOC 
negotiators, faced with the public uproar and growing 
disenchantment with the FTA in political circles connected to 
agriculture, placated the agricultural groups by expediently 
stating they would not continue negotiations in agriculture 
(and would not attend the next FTA round) unless the US 
improved its offers.  Later, they added that they also needed 
the US to set a firm date for bilateral meetings with 
Colombia on agriculture, as had been done for Peru and 
Ecuador.  On May 23rd, Colombia,s lead negotiator, Hernando 
Jose Gomez, traveled to Washington to try to secure dates for 
the next bilateral, but offered no improvements in the GOC 
position to demonstrate their desire to move forward on the 
negotiations.  He returned empty-handed. 
 
5.  (SBU) Emboldened by Gomez,s failed trip and seeing an 
opportunity for jingoism, agricultural groups leaked the 
government,s promises to the press and on May 27th, the 
leading agricultural group, the Colombian Farmer,s 
Association (SAC), sent letters to the Trade and Agriculture 
Ministers asking them to boycott the Guayaquil round of FTA 
negotiations June 6-10 unless there was positive movement 
from the US on agriculture.  This is particularly significant 
since the SAC includes sectors which already export to the 
U.S. market and have much to lose without an FTA for 
Colombia.  Their acquiescence is a sure sign that sentiment 
in the agricultural sector has shifted against us. 
 
The Requested Solution 
---------------------- 
 
6.  (SBU) The Agriculture and Trade Ministers as well as the 
chief FTA negotiator have met with the Ambassador and Embassy 
officials several times during the past few weeks to make the 
GOC,s case.  They claim that they need help to move the 
private sector along, and that they are willing to give the 
US important access on agricultural items of interest.  But 
they need the US to send a positive sign to maintain their 
rapidly collapsing support coalition. The Ministers have 
explained that they need signs from the US on items such as 
coffee (recognition of Colombian Coffee as a geographical 
denomination), beef and dairy (creation of a technical 
permanent committee on SPS issues), ethanol access (for the 
sugar growers) in order to build a string coalition to help 
deflect opposition from entrenched interests. 
 
7.  (SBU) The SPS issues are particularly important.  Many 
analyses, including ones contacted by USAID, argue that 
increased access of non-traditional exports under an FTA will 
more than make up for losses that may occur on traditional 
production when it is eventually faced with additional US 
competition.  Colombians are concerned that past problems 
that left merchandise rotting on the docks because of SPS 
problems are addressed within the FTA.  Many here are 
convinced SPS measures are a barrier to Colombian exports. 
They are convinced that an effective bilateral consultation 
mechanism (such as a permanent technical committee) could 
ease that burden.  At first the GOC was wed to the idea of a 
system similar to that in the Australia FTA, but now they 
seek something similar to what the US tabled in Lima, but 
argue that the terms of reference and timetable for the 
committee should be negotiated during the FTA round.  A 
revised Andean offer reflecting this should be sent to USTR 
prior to the Guayaquil round. 
 
8.  (SBU) We are in the run-up to the March 2006 
Congressional elections and May 2006 Presidential election. 
Our interlocutors highlight that the Government can ill 
afford to lose the support of powerful groups that support 
the FTA.  The non-traditional exporters are chief among those 
groups. 
 
9.  (SBU) The Ministers understand that movement on specific 
items may take some time, but requested that the US set a 
date for the next agricultre  bilateral and agree to move 
forward simultaneously on offers.  They have complained 
exhaustively about the negative dynamic at the agricultural 
table and believe such a procedural change would reverse that 
dynamic.  With these two items, they could bolster the 
failing support from key groups. Otherwise, they would lose 
this support, and in turn support for the FTA as a whole. 
The Ministers say they  cannot afford to &pay8 for the 
right to meet US negotiators with concessions in the 
negotiations since they would be pilloried at home.  On the 
other hand, a loud refusal to offer concessions merely to 
meet with the US will be met with praise here. 
 
The Future 
---------- 
 
10.  (SBU) The GOC has promised much and delivered less in 
the past.  Nonetheless, it is clear they are at a pivotal 
time in the negotiations.  Without a change in the process of 
the negotiations, private interest groups here may force them 
to a position that could send the negotiations into a 
tailspin.  What they request is in essence a change in the 
process of the negotiation, in return for which they have 
assured us privately they would be willing to make important 
substantive concessions.  We have yet to address the most 
sensitive issues on each side in agriculture.  If we reach an 
impasse at this stage over essentially process, it does not 
bode well for future substantive discussions. 
WOOD