US embassy cable - 05BOGOTA6013

C O N F I D E N T I A L SECTION 01 OF 02 BOGOTA 006013 
 
SIPDIS 
 
DEPT PLS PASS USTR BHARMAN AND RVARGO 
 
E.O. 12958: DECL: 06/21/2015 
TAGS: ETRD, EAGR, CO, FTA 
SUBJECT: GOC LAYS GROUNDWORK FOR FURTHER DELAYS IN THE FTA 
 
Classified By: DCM Milton K. Drucker, reasons 1.4 (b) and (d) 
 
1.  (C)  Summary:  Colombian Trade Minister Botero is 
preparing the domestic audience for further delays in the 
FTA.  In public comments, Botero stated that the negotiations 
were at their darkest and later reversed the GOC,s 
long-standing public line by stating that he could not 
guarantee that the negotiations would end this year.  This 
follows the refusal of key agriculture and industrial groups 
to back the latest GOC agricultural offers.  Privately, both 
GOC officials and industrial groups have told the Embassy 
that support for the agreement is waning and falling victim 
to the Colombian electoral season.  While the GOC hopes that 
its latest offers will reanimate the FTA negotiations, 
officials fear (rightly) that the offers fall short of the 
USG,s bottom line.  End Summary. 
 
Darkest before the dawn 
----------------------- 
 
2.  (U) Speaking at the opening of a graphics trade fair, 
Trade Minister Botero surprised the audience by stating that 
the FTA negotiations were &in the darkest night8 and we 
hoped that &we will see the dawn.8  Botero reversed the 
GOC,s contention that the negotiations would conclude later 
this year, stating that given current conditions, the 
government could not guarantee that the negotiations would 
close this year.  The President of the Trade Association 
Council (Consejo Gremial), Luis Carlos Villegas, agreed with 
the Minister, stating that the negotiations were at their 
most critical juncture.  Ex-President Samper, at the 5th 
Meeting of Ibero-American Ex-presidents also criticized the 
agreement, adding that it went far beyond mere trade and as 
such demanded too much of the poorer countries of Latin 
America. 
 
The ag offer 
------------ 
 
3.  (C) The controversy surrounding the GOC,s intention of 
presenting new agriculture offers to the USG set off this 
latest series of statements.  According to FTA lead 
negotiator Hernando Jose Gomez, with the new offer Colombia 
now has proposals on the table for all agricultural products. 
 This latest offer, to be sent June 23, has been condemned by 
most agricultural trade groups as being too aggressive 
because the USG offered to phase out only 3 percent of trade 
within five years or less and Colombia's export priorities 
all face tariff phase outs of over 10 years.  Opposition has 
been particularly fierce from groups currently enjoying 
protection from the Andean price bands.  These same groups 
prompted a previous controversy that almost forced the GOC to 
not attend the Guayaquil FTA round earlier this month.  These 
groups oppose any opening of the agricultural sector, even in 
areas such as wheat and soy where imports fill over 90% of 
the demand.  Given the situation, both industrial and 
agricultural groups, who helped the GOC design the new 
proposals, have told the GOC they will not officially support 
the new proposals. 
 
4.  (SBU) The GOC negotiators and several agricultural groups 
have broadly outlined the new proposals.  The offers still 
feature permanent safeguards on key products (fifteen 
products according to the main agricultural trade group); 
less than current market access; and higher duties than 
currently applied.  In other words, the US exporters would 
have less access than they currently enjoy without an FTA. 
 
5.  (C)  The GOC is also very concerned about pressure from 
rice producers, whose march on Bogota from their main 
production areas was called off on June 21 after the 
Agriculture minister agreed to a series of incentives aimed 
at ensuring that all national production would be purchased. 
The GOC blamed the delay in sending its complete agricultural 
offers on this latest problem with rice growers.  According 
to chief FTA negotiator Hernando Jose Gomez, the GOC had 
originally intended to send the offers June 20, but could not 
do so until the situation with the rice growers was resolved 
and the march called off. 
 
Comment 
------- 
 
6. (C) The Embassy, echoing statements made by USTR 
officials, has been clear in telling the GOC that they need 
to stop negotiating in the press.  The trade minister's 
latest comments and the public assertions that the USG agreed 
to respond to the newest agricultural offer within a week 
indicate the GOC is still not ready to put forward offers 
that the U.S. can use as a basis for negotiation.  This is 
either because the GOC cannot get out of a tactical mode, or 
because they are convinced that the U.S. cannot respond 
completely with CAFTA not yet approved by the U.S. Congress. 
The GOC may be afraid that any concession would, in the long 
term, prove to have been unwise.  Then too, the domestic 
battle between winners and losers under an FTA has not been 
joined. 
 
7.  (C)  The winners (some agricultural interests and most 
industries) have found it convenient to duck the shots of 
conservative agricultural interests.  As they come to realize 
that without an agricultural settlement there is neither an 
FTA, nor ATPDEA, their good-natured acceptance of 
conservative agricultural jingoists may shift markedly.  This 
is unlikely before CAFTA is approved, however.  End Comment. 
WOOD