VZCZCXYZ0052
OO RUEHWEB

DE RUEHZP #0335/01 0522054
ZNR UUUUU ZZH
O 212054Z FEB 06
FM AMEMBASSY PANAMA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7436
INFO RUCPDOC/USDOC WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHDC
RHEHNSC/NSC WASHDC
RUEAIIA/CIA WASHDC
RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
RUEHCV/AMEMBASSY CARACAS 0950
RUEHME/AMEMBASSY MEXICO 2898
RUEHBR/AMEMBASSY BRASILIA 0266
RUEHBO/AMEMBASSY BOGOTA 2179
RUEHLP/AMEMBASSY LA PAZ FEB LIMA 0602
RUEHSG/AMEMBASSY SANTIAGO 0181
RUEHGP/AMEMBASSY SINGAPORE 0008

UNCLAS PANAMA 000335 
 
SIPDIS 
 
SENSITIVE 
 
SIPDIS 
 
DEPT FOR WHA/CEN - PIERCE 
ALSO FOR WHA/EPSC - URS AND GUMBINER 
ALSO FOR EP/TPP/BTA - LAMPRON 
STATE PASS USTR FOR CROWDER, LATIMER, FEDCHOK AND MALITO 
ALSO PASS USDA/FAS/ITP - SPITZER 
USDOC/MAC FOR GAISFORD 
 
E.O. 12958: N/A 
TAGS: ETRD EAGR USTR PGOV PM
SUBJECT: FTA - GOP TO GRANT SPS EQUIVALENCY TO U.S. 
 
REF: PANAMA 0233 AND PREVIOUS 
 
¶1.  Summary.  Panamanian officials announced February 19 
that it will soon grant "equivalency" to the U.S. system for 
food safety and sanitary and phytosanitary (SPS) protection. 
The GOP is finalizing a "decree law" that President Torrijos 
expects to issue by February 28 to create an autonomous, 
science-based "Panamanian Food Safety Authority."  The 
decree would, inter alia, clearly remove the Agriculture and 
Health Ministries from any role in imposing "any restriction 
in the importation of foods."  The GOP seeks a tenth 
negotiating round with USTR March 6-7 aimed at closing a 
free trade agreement (FTA).  End summary. 
 
GOP TO GRANT SPS EQUIVALENCY TO U.S. 
------------------------------------ 
 
¶2.  (U) Panamanian Agriculture Minister Guillermo Salazar 
and Health Minister Camilo Alleyne announced February 19 
that, based on a GOP team's Feb. 13-17 inspection of the 
U.S. system for food safety and SPS protection, the Torrijos 
administration will grant "equivalency" to the U.S. system. 
Alleyne, who led the GOP inspection team to visit USDA- 
APHIS, CDC, and other facilities in Washington, DC, Atlanta, 
and Miami, said, "We can guarantee Panamanians categorically 
that imports from the U.S. pose no risk to human health and 
national agricultural heritage."  Salazar emphasized that 
this equivalency determination is based on documentation the 
GOP has developed through visits to 110 processing plants in 
the U.S. since 1997 and the "reliable" information the 
inspection team obtained through last week's visit. 
 
¶3.  (SBU) President Torrijos' Cabinet expects to consider 
the inspection team's final report on Feb. 22 before issuing 
its final equivalency determination.  A high-level GOP 
official told Ambassador on Feb. 16 that the "decision is 
done" and that the Administration is finalizing its plans to 
sell the decision, and the FTA, to the public.  He added 
that, although Panamanian cattlemen and other protectionist 
producers continue to voice their opposition, he has also 
been approached by a growing number of producers anxious to 
conclude the FTA as soon as possible. 
 
GOP POLISHES PLANS FOR NEW "SPS ENTITY" 
--------------------------------------- 
 
¶4. (U) The Ministry of Industry and Trade (MICI) has led an 
inter-agency process to prepare a draft "decree law" through 
which President Torrijos plans to create a new entity, the 
"Panamanian Food Safety Authority." (As reported reftel, the 
National Assembly granted President Torrijos the authority 
to legislate by decree until February 28, after which the 
Assembly reconvenes.)  This entity would have administrative 
and budgetary autonomy.  The Health Minister would preside 
over a board of directors composed of the National Science & 
Technology Secretary, the Gorgas Institute Director, and 
several Department heads drawn from existing Agriculture and 
Health Ministry offices responsible for food safety and 
plant and animal health.  It would consolidate existing GOP 
offices responsible for issues related to these food and SPS 
issues.  It would require the application of SPS norms based 
strictly on scientific and technical criteria. 
 
¶5.  (SBU) MICI's revised draft is an improvement over the 
original proposal, in that it would clearly remove the 
Agriculture and Health Ministries from any role in imposing 
"any restriction in the importation of foods" and that the 
ministries would be "without competence on SPS matters 
related to food imports."  As revised, the draft decree 
would not include private sector representatives on the 
entity's board of directors (as originally proposed).  The 
decree also stipulates clearly that entity staff would be 
prohibited from having any active employment or interests in 
enterprises engaged in food production or importation. 
 
MICI SEEKS 10TH ROUND IN EARLY MARCH 
------------------------------------ 
 
¶6.  (SBU) MICI's Chief FTA Negotiator, Estif Aparicio, told 
Econ Chief February 19 that MICI hopes for a tenth (and 
final) negotiating round with USTR as early as March 6-7. 
He said closing FTA negotiations with the U.S. then would 
give a huge boost to Panama's biggest annual trade 
expositoin ("EXPOCOMER") set for the same week in Panama 
City.  The GOP expects to sign an FTA with Singapore shortly 
before then and aims to sign its recently concluded FTA with 
Chile during EXPOCOMER.  The GOP's aim is to use all three 
FTA-related events to boost momentum for Panama's moves 
toward free trade. 
 
¶7. (SBU) Comment: Amid a growing chorus of pro-FTA appeals 
from leading business groups (including the traditionally 
protectionist National Industrial Syndicate) and public 
opinion polls suggesting that support for an FTA has 
rebounded to 54%, the GOP appears intent on finally closing 
a deal.  Their aim is to do so before university students 
return to classes in mid-March, thereby keeping anti-FTA 
noise to a minimum.  It is widely believed that President 
Torrijos wants to close FTA negotiations now in order to 
open the way for the GOP to put its long-awaited referendum 
on the proposed Panama Canal expansion. 
 
EATON