VZCZCXYZ0000
PP RUEHWEB

DE RUEHBO #7748/01 3031941
ZNR UUUUU ZZH
P 301941Z OCT 07
FM AMEMBASSY BOGOTA
TO RHEHAAA/WHITE HOUSE WASHDC PRIORITY
RUEHRC/DEPT OF AGRICULTURE WASHDC PRIORITY
RUEHC/SECSTATE WASHDC PRIORITY 9813
INFO RUEHBR/AMEMBASSY BRASILIA 7827
RUEHCV/AMEMBASSY CARACAS 9480
RUEHPE/AMEMBASSY LIMA 5564
RUEHZP/AMEMBASSY PANAMA 0764
RUEHQT/AMEMBASSY QUITO 6203

UNCLAS BOGOTA 007748 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
USTR FOR MCARILLO; WHA/EPSC FOR JSALAZAR; EEB/TPP FOR 
WMUNTEAN 
 
E.O. 12958: N/A 
TAGS: ETRD ELAB EAGR OVIP PGOV PREL CO
SUBJECT: SCENESETTER FOR THE USTR SCHWAB-LED CODEL AND 
ACTING SECRETARY OF AGRICULTURE VISIT TO COLOMBIA - 
NOVEMBER 2-4, 2007 
 
 
 ------- 
Summary 
------- 
 
¶1. (SBU) Your delegation will visit a Colombia far safer, 
economically stronger, better governed and more democratic 
than it has been in decades.  Many Colombians say conditions 
today have improved to a level better than any other time in 
their lives or those of their parents.  During your visit you 
will have the opportunity to see how broadly the improvements 
extend--from major urban centers like Medellin to regional 
hubs such as Popoyan.  Murder rates declined 40 percent since 
¶2002.  Murders of union members dropped even faster--70 
percent during the same period.  Kidnapping rates plummeted 
76 percent.  The Government maintains a presence in all 
municipalities for the first time in memory.  Increased 
security has led to an economic boom, registering 7.5 percent 
growth in the first half of 2007 after reaching 6.8 percent 
in 2006.  The economic expansion has reduced poverty 20 
percent since 2002.  Regional elections October 28, the 
fourth under the Uribe Administration, went smoothly with 
limited violence and fraud.  More than 40,000 combatants, 
mostly paramilitaries, have laid down their arms.  Despite 
the progress, the Uribe Administration recognizes the need to 
reduce human rights violations further by beefing up the 
judiciary, speeding up the judicial process and protecting 
more at-risk union members, journalists and human rights 
workers.  The delay in U.S. congressional approval of the 
U.S.-Colombia Trade Promotion Act (CTPA) has raised concern 
about the commitment of the USG to Colombia.  Studies 
estimate the CTPA will create hundreds of thousands of jobs 
in Colombia; jobs needed to employ the poorly-educated young 
men that recently put down their weapons with the promise of 
reintegration in to legitimate society.  End Summary 
 
------------------------- 
Positive Economic Outlook 
------------------------- 
 
¶2. (U) Significant gains in security have boosted the 
Colombian economy.  GDP growth in 2006 hit 6.8 percent, while 
2007 first semester growth reached 7.5 percent.  Both exports 
and imports grew more than 20 percent in 2006.  The U.S. 
remains Colombia's largest trade partner (approximately 40 
percent of exports and 26 percent of imports).  Colombian 
exports to the U.S. have grown USD 1 billion per year since 
the Andean Trade Preferences Act's (ATPA) renewal and 
expansion in late 2002, while U.S. exports to Colombia 
increased approximately USD 2 billion.  The largest U.S. 
investors - Drummond (coal), ChevronTexaco and ExxonMobil - 
plan considerable expansion due to the improved investment 
climate and security situation.  Investors from around the 
world continue investing or considering investing in Colombia 
in large part because of the possibility of unfettered access 
to the U.S. market provided under the free trade agreement. 
In 2006, Foreign Direct Investment increased to USD 8.9 
billion, quadruple the 2002 level. 
 
¶3. (SBU) The CTPA remains the GOC's highest economic 
priority.  The Colombian Congress ratified the CTPA in June 
by a substantial margin, and should complete the ratification 
of the supplementary protocol on labor, environment and 
intellectual property in early November (only Senate approval 
remains).  The U.S. Congress has extended trade preferences 
for Colombian exporters under the ATPA through February 2008. 
 The Uribe Administration has redoubled efforts to win U.S. 
Congressional support for CTPA approval.  Visits in 2007 by 
high-level USG officials, including President Bush, Secretary 
of Defense Gates, Deputy Secretary Negroponte, DUSTR 
Veroneau, OPIC CEO Mosbacher, U/S Jeffery, and Commerce 
Secretary Gutierrez have reassured them of the 
 
SIPDIS 
Administration's commitment, but the GOC remains cognizant of 
the daunting political challenges ahead. 
 
-------------------- 
Jobs and Agriculture 
-------------------- 
 
¶4. (U) The Colombian agricultural sector provides 
approximately 12 percent of the GDP, but generates 20 percent 
 
 
of national employment and about 60 percent of rural 
employment.  While overall growth remains modest with respect 
to other sectors, the GOC expects the agricultural sector to 
play a more dynamic role in the future.  The agricultural 
sector has transformed since 2004 as a result of increased 
security in rural areas and improvements in transportation 
infrastructure.  Furthermore, with negotiations of several 
free trade agreements, such as the Andean-Mercosur, Chile, 
Central America, and the United States deals as well as the 
beginning of talks with Canada and the European Union, free 
trade has shaped Colombia's agricultural policy over the last 
two years.  Agricultural growth in the foreseeable future 
will likely come from the production of food commodities and 
raw materials for biofuels.  Palm oil production grew ten 
percent in 2006 compared to 2005, largely due to increased 
demand for biodiesel.  In 2006, Colombia exported 
approximately $1.6 billion of agricultural products to the 
U.S. mostly concentrated in coffee, cut flowers, and 
bananas--all hit hard by the weak U.S. dollar.  The CTPA, 
once implemented, will expand Colombia's exportable 
agricultural base and make market access to the U.S. 
permanent, which in turn will increase foreign direct 
investment and employment opportunities. 
 
------------------------ 
Medellin - A City Reborn 
------------------------ 
 
¶5. (U) Medellin, a city of just over 2 million, has rebounded 
dramatically over the last five years.  While known 
throughout Colombia for its entrepreneurial know-how, 
Medellin achieved international infamy for violence and 
mayhem.  In 1991, the nadir of the Pablo Escobar era, 
Medellin ranked as the most dangerous city in the world with 
a murder rate of 381 per hundred thousand, eleven times 
higher than Chicago.  Through an aggressive police and 
military effort to clear out the drug lords and guerrilla 
elements, proactive governance and an economic rebound driven 
in part by the unilateral trade preference program with the 
U.S., Medellin reemerged as a livable, prospering city.  By 
2006, the murder rate plummeted 920 percent to 29 per hundred 
thousand, a tad lower than Baltimore's.  Medellin's Mayor 
Sergio Fajardo has led efforts to reduce crime, increase 
access to services, and foster economic opportunity.  Alonso 
Salazar, who served in Fajardo's administration, won the 
October 28 race to succeed Fajardo and should continue with 
the reforms. 
 
¶6. (U) The success of the textile, apparel and cut flower 
industries, which employees tens of thousands of people, have 
buoyed the economy of Medellin and the surrounding area, as 
well as provided jobs and business to U.S. partners.  These 
industries flourished because of the access provided by ATPA. 
 However, the program's frequent expirations (2001, 2006, 
2007 and scheduled February 2008) has limited growth as 
companies refrain from making necessary capital investment 
and lose contracts because of the program's uncertainty.  In 
fact, Colombian apparel exports to the U.S. declined in the 
first half of 2007 due to competition with China and a steep 
appreciation of the peso.  U.S. Congressional approval of the 
CTPA, therefore, remains a top concern for business and 
political leaders in the region. 
 
---------------------------- 
Popoyan - Recovery In Action 
---------------------------- 
 
¶7. (U) The delegation will travel to Popoyan, located in the 
fertile southern valley region of Colombia.  Narcotics 
traffickers and insurgents long ransacked Popoyan's 
surroundings, but since the beginning of the Uribe 
Administration the area has experienced a significant 
recovery.  Agriculture and tourism, the twin economic pillars 
of the region, both rebounded.  Today, Popoyan has 
recuperated its position at the heart of Colombia's Catholic 
history, once again hosting the country's largest Easter Holy 
Week celebration.  As part of the effort to rebuild Popoyan's 
agricultural base and generate employment, USAID funds 
projects to assist small farmers in the area.  In addition to 
visiting one of USAID's projects, the trip to Popoyan will 
 
 
highlight President Uribe's commitment to rebuilding remote 
areas previously lacking security. 
 
--------------------------------------------- --- 
Democratic Security Fosters Successful Elections 
--------------------------------------------- --- 
 
¶8. (U) The establishment of greater GOC territorial control 
and the paramilitary demobilization allowed civil society and 
political parties to operate more openly than ever before. 
In May 2006, the leftist Polo Democratico candidate for 
president received over 2.5 million votes, the highest level 
ever for a leftist candidate.  Colombia's October 28 local 
elections occurred without significant violence or problems, 
according to the OAS, Embassy observers, and local press. 
The GOC deployed 167,000 police and military to voting sites, 
and electoral officials appeared well-organized overall.  The 
GOC and local officials quickly deployed security and 
investigative officials to the few areas where allegations of 
fraud--or localized violence--occurred.  Elections centered 
on local issues and alliances, and results did not represent 
a referendum on President Uribe or other national 
politicians--though the Uribe coalition fared well.  Samuel 
Moreno of the Polo Democratico Party won the key Bogota 
mayoral race.  Observers told us candidates and parties 
associated with the para-political scandal fared poorly 
overall--though a few questionable candidates did win. 
Fighting between security forces and the Revolutional Armed 
Forces of Colombia (FARC) forced the postponement of voting 
in the small town of Argelia Cauca, though voting proceeded 
normally in the remainder of the department. 
 
----- 
Labor 
----- 
 
¶9. (U) Labor violence and impunity remain major concerns in 
Colombia.  In June 2006, the GOC, trade confederations and 
business representatives signed a Tripartite Accord at the 
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 
2007 to implement the agreement committing the government to 
financing the ILO Special Technical Cooperation program and 
allocating USD 1.5 million annually 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. 
 
¶10. (U) Although trade unionists continue to fall victim to 
violence for both political reasons and common crime, the GOC 
remains determined to protect labor leaders.  In 2006, the 
GOC's Protection Program assisted over 1,500 trade unionists 
and 10,000 human rights activists, journalists, politicians, 
witnesses and other individuals under threat.  As a result, 
the murder rate for trade unionists has dipped below that for 
the general population.  The GOC expects to spend some $34 
million on protection in 2007.  Attorney General Mario 
Iguaran reaffirmed to Ambassador Veroneau in August that his 
office is committed to prosecuting cases of violence against 
labor.  Under his leadership the Attorney General's office 
focused resources for the human rights office's sub-unit 
concentrating on prosecuting 352 priority labor violence 
cases.  In those cases, the GOC has already scored 12 
convictions. 
 
--------------- 
U.S. Assistance 
--------------- 
 
¶11. (SBU) In January, the GOC presented a Plan Colombia 
"consolidation strategy" pledging a Colombian investment of 
$78 billion between 2007 and 2013.  The proposal contains a 
heightened emphasis on social development, assigning new 
resources to consolidate governance, 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 seeks funding from the United States and 
European countries, but also brings substantial resources of 
its own to the table.  USG security assistance combats drug 
trafficking and terrorism and includes training, material 
aid, and technical assistance to security forces and other 
institutions.  It also provides support for GOC aviation, 
essential for all programs--civilian or military--outside 
Colombia,s major cities. 
 
¶12. (U) The USAID Mission in Colombia funds $139 million of 
programs in four key strategic sectors:  alternative 
development and economic policy reform; justice reform, human 
rights and strengthening governance; demobilization and 
reintegration of illegal armed groups; assistance to 
internally displaced persons (Colombia has between 2 and 3 
million displaced persons), Afro-Colombians and other 
vulnerable populations. 
 
--------------------------------- 
Drug Eradication and Interdiction 
--------------------------------- 
 
¶13. (SBU) Eradication of coca and poppy crops and 
interdiction of cocaine and heroin reached record levels in 
2006, and political support for manual and aerial eradication 
continues to grow in Colombia.  President Uribe understands 
that manual eradication cannot replace aerial eradication 
without a sharp increase in expenditures, and he seeks a 
complementary approach using both methods.  The National 
Police and military forces seized over 203 metric tons of 
cocaine and coca base in 2006, a near-record quantity, and 
destroyed 200 cocaine laboratories, also a record.  We 
continue to work with the GOC to refine our eradication 
strategy and determine how best to transfer key tasks from 
the USG to the Colombian government. 
 
--------------------------------------------- ---- 
Military Justice and Improved Human Rights Record 
--------------------------------------------- ---- 
 
¶14. (SBU) The Uribe Administration continues to make progress 
on human rights cases involving military abuse or 
collaboration with paramilitaries.  All members of the 
military and police receive mandatory human rights training. 
Minister of Defense (MOD) Santos 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.  The UN Human Rights Commission and 
private human rights groups all play active roles here. 
Progress on certain high profile human rights cases against 
the public security forces has gone agonizingly slow and 
injured the GOCs reputation in the international community. 
 
----------- 
Extradition 
----------- 
 
¶15. (SBU) President Uribe remains a strong supporter of the 
U.S.-Colombia extradition relationship.  Since taking office, 
he has approved over 550 extraditions to the United States, 
including almost 100 cases so far in 2007. 
 
-------------------------------- 
Demobilization and Peace Process 
-------------------------------- 
 
¶16. (SBU) Over 32,000 former paramilitaries have demobilized 
since 2002, and a further 11,000 deserted from all illegal 
armed groups (about one-half from the FARC).  FARC desertions 
increased significantly in 2007, and this has resulted in the 
largest such reintegration program ever attempted and 
operates while the GOC continues to battle the FARC and the 
Army of National Liberation (ELN).  A small percentage of 
renegade former-AUC members have joined new criminal groups. 
Job creation remains a priority, but many of the recently 
demobilized have few employable skills and need intense 
psycho-social and vocational training before they can enter 
the labor force.  The GOC,s reintegration program has 
significantly increased the number of former combatants now 
employed or in training. The GOC has identified increased 
 
 
investment in small and medium enterprise development as a 
priority for promoting job creation for demobilized 
ex-combatants. 
 
¶17. (SBU) The ELN has negotiated with the GOC for well over a 
year, so far without success and prospects remain doubtful. 
Although the ELN retains hostages, their military capability 
continues to decline.  The FARC has refused to engage in any 
meaningful peace talks, and recently killed eleven state 
legislators they had held hostage.  At the end of August, 
Venezuelan President Hugo Chavez visited Colombia to offer 
his assistance in facilitating peace talks between the GOC 
and the FARC and ELN. 
 
------------- 
U.S. Hostages 
------------- 
 
¶18. (SBU) The three U.S. contractors captured by the FARC in 
February 2003 remain the longest held U.S. hostages in the 
world.  Their safe release continues as our top priority. 
The Colombians provide full assistance, and President Uribe 
has assured us that any humanitarian exchange will include 
the U.S. hostages. 
Brownfield