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Cablegate: Colombia to Sign Trade/Investment Agreements With

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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

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