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Cablegate: Scenesetter for Visit of Deputy Ustr John


DE RUEHBO #5651/01 2142010
R 022010Z AUG 07





E.O. 12958: N/A


1. (SBU) Post welcomes Deputy USTR John Veroneau to
Colombia. With U.S. help, President Uribe has made great
strides in fighting drug trafficking and terrorism. The
economy is growing, the investment climate is strong, and
there is both anticipation and nervousness over the fate of
the U.S.-Colombia Trade Promotion Agreement (CTPA) in hands
of the Congress in Washington. In January, the GOC
presented a Plan Colombia consolidation strategy, with a
heightened emphasis on social development. USAID programs
aim to strengthen democratic institutions, foster a culture
of human rights, create alternative development
opportunities, and assist people displaced by internal
violence. Colombia's human rights record is improving.
Truth about links between paramilitaries, politicians and
others is coming out as a result of the paramilitary
demobilization and the Justice and Peace Law process.
Talks with the National Liberation Army (ELN) are focused
on establishing a cease-fire agreement; the Revolutionary
Armed Forces of Colombia (FARC) have yet to start talks
with the GOC. The FARC has held three U.S. citizens for
more than four years; their safe recovery is a top
priority. End Summary

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Positive Economic Outlook

2. (U) Significant gains in security have helped boost the
Colombian economy. 2006 GDP growth was 6.8 percent, while
2007 first quarter growth reached 8.1 percent, the highest
in Colombian history. Both exports and imports grew more
than 20 percent in 2006. The U.S. is Colombia's largest
trade partner (approximately 40 percent of exports and 28
percent of imports). Colombian exports to the U.S. have
grown USD 1 billion per year since ATPDEA's inception in
late 2002, while U.S. exports to Colombia increased
approximately USD 2 billion. The largest U.S. investors -
Drummond (coal), ChevronTexaco and ExxonMobil - are
planning considerable expansion due to the improved
investment climate and security situation. 2006 Foreign
Direct Investment increased to USD 8.9 billion, quadruple
the FDI in 2002. Although unemployment has fallen from 18
percent when President Uribe took office to 11 percent, it
has remained in 11-13 percent range since 2006.

3. (SBU) The CTPA remains the GOC's highest economic
priority. The Colombian Congress approved the CTPA in
June. The modification protocol signed in June was
introduced in the Colombian Congress on July 20. The GOC
expects a vote on the protocol in September or October.
The U.S. Congress has extended trade preferences for
Colombian exporters under the Andean Trade Preferences Act
(ATPA) through February 2008.

4. (SBU) There is tremendous business confidence in
Colombia, and international investors are eyeing the
country both for its domestic market and as a platform to
reach regional markets. Standard and Poors raised
Colombia's credit rating in early 2007 to a step below
investment grade due to the GOC's strong fiscal
performance. Political controversies have thus far not
dampened the business climate; however, the international
investment community is concerned over the fiscal impact of
proposed changes in the transfer of funds from the central
government to local governments. Inflation remains
moderate, but has risen gradually in 2007 is expected end
the year at between 6 and 7 percent. Meanwhile the
Colombian peso has increased approximately 25 percent
against the U.S. dollar in the last year, putting cost
pressures on Colombian exporters and leading the GOC to
impose limited currency controls in May.

5. (U) In June 2006, the GOC, trade confederations, and
business representatives signed a Tripartite Accord at
International Labor Organization (ILO) in Geneva, removing
Colombia from discussion in the ILO's Committee for the
Application of Standards for the first time in 21 years.
A resident ILO representative arrived in Colombia in

January to implement the agreement committing the
government to financing the ILO Special Technical
Cooperation program and allocated USD 1.5 million to the
Fiscalia to prosecute cases of violence against trade
unionists. The GOC has assigned nearly 100 prosecutors
and investigators to this task. Labor leaders and
the UNHCHR's local representative praise the initiative.

6. (U) Although trade unionists continue to be victims of
violence for political reasons and due to common crime,
the GOC is determined protect labor. In 2006, the GOC's
Protection Program assisted 1,200 trade unionists and
10,000 human rights activists, journalists, politicians,
witnesses and other individuals under threat.

U.S. Assistance

7. (SBU) In January, the GOC presented a Plan Colombia
consolidation strategy. The proposal contains a heightened
emphasis on social development, assigning new resources to
human rights, displaced people, and Afro-Colombian and
indigenous communities. It also aims to reintegrate 42,000
demobilized ex-combatants and deserters and to promote
Colombia's competitiveness and licit exports. The GOC is
seeking funding from the United States and European

8. (SBU) USG security assistance combats drug trafficking and
terrorism and includes training, material aid, and technical
assistance to security forces and other institutions. The US
is Colombia,s most important ally and the GOC recognizes it.

Colombia is the closest ally of the U.S. in the region and
the GOC knows that too.

-- Plan Patriota, the military campaign to re-take areas
dominated by the FARC has been successful over the last three
years. Terrorists have not been successful in mounting a
major attack against Bogota and its environs since November
2003, although they have tried. The military is now
focused well to the south in the heartland of the FARC and
in some of the best coca growing regions in the country.
Landmines, IEDs, disease, logistic issues, limited airborne
mobility, and distance restrain the public forces, but they
are nonetheless making progress. Nonetheless, the FARC
remains able to launch attacks on isolated or smaller
government targets, but generally avoids direct contests
with larger units.

-- Center for Coordinated Integral Action: With U.S.
support, the GOC formed in 2005 an interagency center to
facilitate delivery of social services in seven areas that
have traditionally lacked state presence and been
controlled by illegal armed groups. The Center focuses on
providing immediate social services once security has been
established, including documentation, medical care, and
longer-term development projects. More than 40,000
individuals have been enrolled in state health care.
Judges, investigators, and public defenders are moving
into newly libnerated areas. The showpiece of this effort
is San Vicente del Caguan, which served as the unofficial
capital of the FARC's demilitarized zone during the peace
process with President Pastrana, but now has government
schools, clinics, justice services, etc.

Drug Eradication and Interdiction

9. (SBU) Eradication of coca and poppy crops and
interdiction of cocaine and heroin are at record levels,
but political support for aerial eradication is
deteriorating in the US Congress and in Colombia. Manual
eradication cannot fully replace aerial eradication
without a sharp increase in expenditures. Moreover, the
National Police and military forces seized over 203 metric
tons of cocaine (HC1) and coca base in 2006, a near record
quantity, and destroyed 200 HC1 laboratories, also a

--------------------------------------------- --------
U.S. Assistance to Development and Democracy Building
--------------------------------------------- --------

10. (U) The USAID Mission in Columbia funds programs in
four key strategic sectors. Alternative economic
development,and economic reform; modernization of the
criminal justice system, promote access to justice for
disenfranchised Colombians, and human rights;
demobilization/reintegration of former members of illegal
armed; assistance to internally displaced persons
(Colombia has between 2 and 3 million displaced persons.

--------------------------------------------- ----
Military Justice and Improved Human Rights Record
--------------------------------------------- ----

11. (SBU) The Uribe Administration continues to make
progress on human rights cases involving military abuse
or collaboration with paramilitaries. Human rights
training is mandatory for all members of the military
and police. Minister of Defense Santos has identified
military justice reform as a top priority; in October, he
named the first civilian - and the first woman - as
director of the Military Criminal Justice System. In
January 2007, MOD Santos relieved Colonel Hernan Mejia
Gutierrez, a highly decorated colonel, from command of the
13th Mobile Brigade due to allegations tying him to former
paramilitary leader Jorge 40. This was the first time the
MOD had taken such action against an active commander for
alleged paramilitary ties. The UN Human Rights Commission
and private NGOS are all active here to promote human
rights. Progress on certain high profile human rights
cases against the public security forces has been
agonizingly slow and has injured the GOCs reputation in
the international community.


12. (SBU) President Uribe is a strong supporter of the
U.S.-Colombia extradition relationship. Since taking
office, he has approved over 450 extraditions to the
United States ) 72 cases so far in 2007.

Demobilization and Peace Process

13. (SBU) Over 32,000 former paramilitaries have
demobilized since 2002, and a further 11,000 have deserted
from all illegal armed groups (about half from the FARC).
Some renegade former AUC members have joined new criminal
Groups. This is the largest such reintegration program
ever attempted and it is ongoing while the GOC continues
to battle the FARC and ELN. Job creation continues to be
priority one, but many of the recently demobilized have
few employable skills and need both psychosocial and
vocational training before they can enter the labor force.
The lure of returning to illegal activity remains the
&easy way8 out for them.

14. (SBU) The Justice and Peace Law confessions (version
libres) of ex-paramilitary chiefs began with ex-leader
Salvatore Mancuso testifying in December 2006. Rigorous
implementation of the law and ensuring the safety of
witnesses and victims are key to ensuring peace and justice
in Colombia. The version libre and related processes
continue to reveal truths that no other Colombian
administration has come close to discovering. President
Uribe strongly supports the Colombian Supreme Court's
investigations into links between paramilitaries and
politicians, even links between political allies and the
¶s,8 and has called for the Supreme Court,s
unit to probe deeper.

15. (SBU) The ELN has been negotiating with the GOC for
well over a year, but so far without success. Prospects
remain doubtful. Although the ELN retains hostages,
their military capability has been dramatically degraded.

U.S. Hostages

16. (SBU) The three U.S. contractors captured by the FARC

in February 2003 are the longest held U.S. hostages in the
world. Their safe release continues to be a top priority.
The Colombians are providing full assistance. President
Uribe has assured us that the U.S. hostages will be
included in any humanitarian exchange.

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