Cablegate: The Fta Agricultural Negotiations at the Crossroads
This record is a partial extract of the original cable. The full text of the original cable is not available.
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