Cablegate: Codel Weller Underscores Good Relationship With

This record is a partial extract of the original cable. The full text of the original cable is not available.

C O N F I D E N T I A L SECTION 01 OF 03 PANAMA 000452


E.O. 12958: DECL: 02/25/2014

Classified By: Ambassador Linda Watt for Reasons 1.5 (b) and (d).

1. (U) Summary: Codel Weller,s February 19-22 visit to
Panama underscored our strong friendship and high level of
bilateral cooperation with GoP interlocutors, who included
President Moscoso, FM Arias, National Security Advisor
Jarvis, and VM for Foreign Trade Adames. Congressman Weller
expressed appreciation for GoP support on Iraq,
counter-terrorism, counter-narcotics, Canal management, and
added his strong backing for achieving a fair and balanced
outcome during upcoming FTA negotiations. President Moscoso
stressed that the US can "always count on us" and encouraged
completing FTA negotiations prior to her Administration
leaving office on September 1. She also voiced support for
Panama,s designation as a distant foreign port under the
Passenger Vessel Services Act (PVSA). On the FTA, Moscoso
noted that, with the exception of a few agricultural-sub
sectors, most private business firmly supports the FTA.
Regarding the upcoming May 2 national elections, Moscoso
assured that they would be open, transparent, and democratic.
The Codel also attended a dinner hosted by the Ambassador
with business and political leaders and visited the Panama
Canal Authority, Smithsonian Tropical Research Institute
facilities, and the Manzanillo International Terminal (the
largest container port in Latin America). Codel Weller
included Congressman Jerry Weller (R- Ill), Congressman
Collin Peterson (D- Minn), and Ted Brennan (Western
Hemisphere Subcommittee, Majority Staff). End Summary.

Meeting w/ President Moscoso and FM Arias:
"You Can Always Count on Us"

2. (SBU) Congressman Weller opened the February 19 meeting
by noting that Panama has been a "great friend" to the US and
thanked President Moscoso and FM Arias for Panama,s support
in joining the Coalition of the Willing, signing an Article
98 agreement, cooperating on regional security and
counter-terrorism, and assisting in the capture last month of
Colombian drug-kingpin Montoya. He added that he shares a
strong belief in free trade and that the U.S. wants a fair
and balanced outcome for both countries from the upcoming
negotiations. President Moscoso praised the bilateral
relationship calling the U.S. akin to the "father Panama grew
up with." She added that in recent years the relationship
has evolved and normalized. She noted that cooperation has
been excellent on security matters and on counter-terrorism.
The GOP is taking all prudent measures to bolster Canal
security. She added the US "can always count on us."

3. (U) Moscoso said the Canal,s increased revenues (a
portion of which are transferred to the GoP) have permitted
increased spending on hospitals, housing and education. She
said that the Panama Canal Authority (ACP) will finish a
study on Canal expansion in June 2004 regarding a project to
build a third-set of locks, and the GoP would subsequently
hold a national referendum on the issue sometime afterwards.
(Note: realistically the referendum will not likely take
place before late 2004.) The $ 4-9 billion dollar project
will create jobs and participation will be open to US

4. (U) Turning to the upcoming FTA negotiations, Moscoso
said that she would like to conclude negotiations "even if
she does not sign the accord" before leaving office September
1. She is pleased that the U.S. is thinking about Panama as
an FTA partner and that the vast majority of Panama,s
private sector supports the negotiation. She noted sensitive
areas for Panama are agriculture sub-sectors such as pork,
chicken, beef, and rice. FM Arias added -- for Congressman
Peterson,s benefit -- that Panama has a small sugar
industry, most of which is for domestic consumption.

5. (U) Moscoso assured the Codel that the upcoming May 2
national elections would be "open, transparent, and democracy
will be respected." She stressed that Panama had endured 21
years of dictatorship and knows how important it is to get
this right. Congressman Weller noted that democracy is a
fragile institution and that the U.S. is willing to work with
Panama to strengthen democratic institutions.

6. (SBU) Congressman Peterson said Panama,s desire to be
designated a "distant foreign port" under the Passenger
Vessel Services Act would be a difficult issue for the House
Transportation Committee's Chairman Young. FM Arias said he
understood there was a way to bring this change about on the
basis of executive branch authority. Peterson cautioned that
some in Congress might still try to block any such effort,
but volunteered to talk with Young. Arias explained that
U.S. companies also see the re-designation as a way to
increase business and that he will try to see Young when he
visits Washington in March.

7. (SBU) On other security issues, Moscoso added that Panama
is ready to implement the IMO,s ISPS code by the July 1
deadline, but that it needs help obtaining x-ray equipment to
inspect containers. (Note: Moscoso appeared to be confusing
ISPS implementation with the USG,s Container Security
Initiative (CSI) program.) She noted that Panama has also
taken substantial measures during her administration to
strengthen its anti-money laundering regime and in stopping
drug transits. Weller concluded by thanking Moscoso and
Arias for the long and special relationship the US and Panama
have enjoyed.

--------------------------------------------- ---------
Meeting with National Security Director, Ramiro Jarvis
--------------------------------------------- ---------

8. (C) Codel Weller met with Ramiro Jarvis, Executive
Secretary of the Public Security and National Defense

Council, on Feb. 19. Congressman Weller thanked Jarvis for
Panama,s strong security cooperation with the United States,
especially in the areas of counterterrorism and money
laundering. The discussion focused upon three themes: anti-
security threats to the Panama Canal, terrorist activity in
Panama, and regional cooperation.

9. (C) Jarvis noted that the 9/11 attacks caused Panama to
change its perspective on Canal security, and that the GoP is
continuously looking to enhance its capabilities to counter
any potential threat. He expressed gratitude to the USG for
its role in providing equipment, training, and information.
This collaboration has contributed to the strengthening of
Panama,s borders and its ability to quickly respond to any
situation. He stated that the GoP evaluates every vessel
that transits the canal, assigns it a threat level, and
searches those considered suspicious. Jarvis added that
Panama has adapted a global view regarding its approach to
national security. In addition to the Container Security
Initiative, Panama would like to sign the Proliferation
Security Initiative with the United States before the end of
the Moscoso administration. He further stated that any USG
assistance aimed at strengthening GoP immigration and customs
organizations would be greatly appreciated.

10. (C) Regarding possible terrorist activities in Panama,
Jarvis affirmed that the GoP has not/not identified any
specific terrorist financial activity in Panama, adding that
the UAF, Panama,s Financial Intelligence Unit (FIU), closely
monitors the issue. He noted Panama had recently made
improvements to its anti-money laundering regime. Responding
to Congressman Peterson,s question on possible mainland
Chinese encroachment into Panama, Jarvis responded that the
main interest of China is to diminish Taiwan,s influence in
Panama. China's interests in Panama are commercial, he said.
Panama has not/not seen any indication of suspicious Chinese
activities/penetration. Congressman Weller stated that
international cooperation amongst countries was imperative to
stopping terrorists and their networks. Jarvis concurred and
explained that while Muslim communities in Panama and the
region are well connected, Panama has not/not identified any
abnormal activity. He added that the GoP completes, with USG
assistance, a strict identification check on selected
individuals and foreign nationals coming to Panama and if
there is any information regarding possible terrorist links,
the GOP denies the visa.

11. (C) Jarvis continued that regional intelligence
cooperation is good, especially with Paraguay, Chile, and
Argentina. He elaborated that while arms trafficking has
increased in the region as a whole, the countries are working
together to stop it. As a transit country of weapons, Panama
continues to work closely with Colombia through a bi-national
border and maritime security group. Concerning the Darien
border, Jarvis stated Panama would like Colombia to (1)
strengthen the presence of its forces on the border and (2)
communicate better with Panama. Jarvis stressed that
satellite communication and the willingness to exchange
information are the keys to success. At the moment, there is
no means of communication at the border between the
countries, although communication and coordination between
Jarvis,s office and the Colombian Embassy in Panama City is
close. Ambassador Watt highlighted that the USG is working
with the GoP to establish a secure communication system that
is compatible between the two countries.

Meeting with VM for Trade, Romel Adames:
The FTA: Panama,s Concerns

12. (SBU) Codel Weller also met with Vice Minister for
External Trade, Romel Adames, and his advisor, Analisa
Palacios on Feb. 20. Adames stressed the importance of
beginning the FTA negotiations prior to Panama,s May 2
national elections; "beginning the negotiations in April
would send the message the FTA is a state project rather than
a political instrument in Panama." (Comment: It's really
just the opposite - the Moscoso Administration's timing
argument is mostly local politics and trying to gain
electoral advantage, although we see no downside with
beginning discussions in April. End Comment.) Adames stated
that while there are some agricultural concerns (namely rice,
onions, potatoes, dairy, and pork), the negotiations will
also focus on services. He specifically noted Panama,s
interest in reducing barriers for Panamanian banks entering
the US market. Regarding CAFTA, Adames stated Panama is "not
uncomfortable with CAFTA as a starting place" for the
negotiations. The GoP is currently studying CAFTA, and by
early March will have a better understanding of what changes
Panama wants. Congressman Weller stated that CAFTA,s
environmental additions would be important for Panama,s
tourism industry. Adames agreed and remarked that the
environment was beginning to be a issue for Panamanians.

13. (SBU) Adames said that Panama views its main competitor
for the FTAA Secretariat to be Miami. He shared (protect)
that Panama plans to offer its Atlapa Convention Center to
house the Secretariat. Weller stressed that the FTAA would
permit the hemisphere to compete with Asia and China; the FTA
between Panama and the U.S. is a key building block. Adames
concurred and called Brazil the region's largest stumbling
block because of their self-conceived idea of power.

14. (SBU) Congressman Weller asked Adames to elaborate on the
issue of public procurement related to the Canal and whether
American businesses are competitive in Panama. Adames
remarked that, in his opinion, the US initially pursued the
issue in the wrong forum (read: the WTO,s GPA). Panama, he
explained, does not want to activate the Neutrality Treaty
that permits the US to enter Panama to defend the Canal.
Consequently, the GoP fears that foreign companies procuring
in Panama could lead to allegations of active negligence,
which could activate the treaty. Panama is not giving
preference regarding public procurement to countries with an
FTA with GoP, but the GoP is willing to discuss the issue
with the US. (Comment: While this logic seems convoluted it
is clear the GoP will be prepared to discuss Canal
procurement in the context of a bilateral FTA. End Comment.)

Visit to the Canal and STRI

15. (U) Codel Weller also visited the Panama Canal
Authority's Visitor Center where they met the Canal
Administrator and received a briefing from Canal officials at
the Incident Management Center on Canal Security. The Codel
also had the opportunity to visit the Smithsonian Tropical
Research Institute's (STRI) Galeta Point Laboratory and
STRI,s Barro Colorado Island facility.

16. (U) Ted Brennan cleared for Codel Weller on paragraphs
1-7 and 12-16; he did not have the opportunity to clear on
classified paragraphs 8-11.

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