VZCZCXRO0629
PP RUEHCHI RUEHFK RUEHHM RUEHKSO RUEHNAG RUEHPB
DE RUEHBO #0015/01 0061559
ZNR UUUUU ZZH
P 061559Z JAN 09
FM AMEMBASSY BOGOTA
TO RUEHC/SECSTATE WASHDC PRIORITY 6359
INFO RUEHZU/ASIAN PACIFIC ECONOMIC COOPERATION
RUEHWH/WESTERN HEMISPHERIC AFFAIRS DIPL POSTS
RUEHSW/AMEMBASSY BERN 1515
RUEHNY/AMEMBASSY OSLO 0395
RUEHRK/AMEMBASSY REYKJAVIK 0003
RUEHBS/USEU BRUSSELS
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHDC

UNCLAS SECTION 01 OF 03 BOGOTA 000015 
 
SENSITIVE 
SIPDIS 
 
WHA/EPSC ROONEY 
EEB/TPP MUNTEAN 
STATE PASS USTR CARRILLO 
 
E.O. 12958: N/A 
TAGS: ECON ECIN ETRD PREL CO
SUBJECT: COLOMBIAN TRADE AGENDA: MAJOR ACHIEVEMENTS IN 
2008, BIG PLANS FOR 2009 
 
REF: A. BOGOTA 4234 
     ¶B. BOGOTA 4178 
     ¶C. BOGOTA 3786 
     ¶D. BOGOTA 3705 
     ¶E. BOGOTA 2706 
 
BOGOTA 00000015  001.2 OF 003 
 
 
¶1. (SBU) SUMMARY.  In 2008, Colombia made significant 
progress toward its stated goal of having nine free trade 
agreements with 45 countries by 2010.  In addition to signing 
free trade agreements with Canada and EFTA, Colombia's 
Congress ratified FTAs with Central America's Northern 
Triangle and Chile.  Also in 2008, Colombia's Constitutional 
Court approved the FTA with the U.S., and Colombia made solid 
progress in negotiations with Mexico and the EU.  Colombia's 
main trade objectives for 2009 are to conclude FTA 
negotiations with the EU, reach new (or deepen existing) 
agreements with several partners in the Hemisphere, and 
expand dialogue and engagement with Asia.  Despite the trade 
successes, Colombia remains in limbo over prospects for trade 
enhancement with its two largest trading partners, the U.S. 
and Venezuela, which account for over one-half of Colombia's 
exports.  END SUMMARY. 
 
URIBE ADMINISTRATION SEEKS BROADER TRADE HORIZONS 
--------------------------------------------- ---- 
 
¶2. (U) When President Alvaro Uribe came to power in 2002, 
Colombia had two free trade agreements with five countries 
(Venezuela, Peru, Ecuador and Bolivia via the Andean 
Community of Nations (CAN); and Mexico via the G-3). 
Colombia also enjoyed limited tariff preferences through 
regional agreements with its neighbors in South and Central 
America and the Caribbean.  The FTA between CAN and Mercosur 
entered into force in 2005, adding four more countries to 
Colombia's list of free trade partners.  In 2007, 28 percent 
of Colombian exports went to countries with which it had a 
free trade agreement.  Had all nine FTAs been in force at 
that time, the figure would have been 84 percent. 
 
CHILE AND NORTHERN TRIANGLE WILL SOON BE IN FORCE 
--------------------------------------------- ---- 
 
¶3. (SBU) Colombia's new Chief Trade Negotiator, Santiago 
Pardo, told us he expects Colombia's Constitutional Court to 
approve FTAs with Chile and Central America's Northern 
Triangle (Guatemala, Honduras and El Salvador) in early 2009, 
paving the way for the agreements, which were ratified by 
Congress in 2008, to enter into force by mid-year.  Colombia 
exporters already enjoy broad tariff-free access to the 
Chilean market; the FTA adds provisions for services, 
investment and IPR.  Colombia's previous trade agreement with 
Central America, signed in 1984, was much more limited in 
scope than the new FTA. 
 
COLOMBIA SIGNS WITH CANADA AND EFTA IN 2008 
------------------------------------------- 
 
¶4. (U) In November, Colombia signed FTAs with Canada and the 
European Free Trade Area countries (Switzerland, Norway, 
Iceland and Liechtenstein; Refs A and B).  While the five 
countries combine for only four percent of Colombia's exports 
and three percent of Colombia's imports, their share of 
Colombia's trade has been growing consistently over the last 
several years, and the FTAs offer Colombia the opportunity to 
further expand trade.  According to Pardo, the Canada FTA 
will offer greater possibilities for Colombia to export 
textiles, industrial goods, fruits, sugar and ethanol. 
Likewise, the Colombians see the agreement with EFTA as an 
opportunity to increase exports of remanufactured industrial 
goods, precious stones and plastics in addition to the tariff 
reductions won on traditional agricultural Colombian exports, 
including coffee, bananas and flowers.  Both FTAs await 
Congressional ratification and Constitutional Court approval 
before entering into force, possibly in late 2009, but more 
likely in 2010. 
 
EU NEGOTIATIONS PRIORITY NUMBER ONE FOR 2009 
-------------------------------------------- 
 
BOGOTA 00000015  002.2 OF 003 
 
 
 
¶5. (SBU) 2008 saw the bloc-to-bloc CAN-EU talks stall.  In a 
major victory for Colombia, the EU agreed to abandon that 
format and negotiate free trade agreements with willing 
Andean countries (Ref D).  According to Pardo, Colombia is 
anxious to start negotiating with the EU in February, 2009, 
following what it considers a "wasted" final six months of 
¶2008.  Pardo estimated that the two sides would be able to 
salvage much from the first three rounds of bloc-to-bloc 
negotiations and could possibly (though not likely) conclude 
negotiations in four or five rounds by the end of 2009.  The 
twenty-seven EU members buy about 15 percent of Colombia's 
exports, and supply over 12 percent of Colombia's imports, 
meaning that, considered as a single entity, the EU would be 
Colombia's second largest trading partner, following the U.S. 
 
SHORING UP TRADE IN THE NEIGHBORHOOD 
------------------------------------ 
 
¶6. (SBU) Colombia has had an FTA with Mexico since 1995, when 
the G-3, which included Venezuela, came into force. 
Nonetheless, Colombia and Mexico are in negotiations to 
broaden the scope of the agreement to include textiles, auto 
parts, and oil seeds as well as certain agricultural and 
dairy products.  Colombia, whose imports from Mexico in 2007 
were six times more than its exports (resulting in a 
bilateral trade deficit of USD 2.5 billion), considers the 
current agreement to be skewed in Mexico's favor and sees the 
current negotiations as a way to correct the imbalance. 
 
¶7. (SBU) Beyond the 45 countries covered by the nine FTAs, 
Pardo said Colombia is looking to reach a more limited 
agreement with the Dominican Republic (Colombia's 11th 
largest export market) to include chapters on goods, services 
and investment.  Similarly Colombia is interested in 
deepening its limited agreements (though likely not to the 
point of FTAs) with Caricom members and Costa Rica. 
 
ASIA: COLOMBIAN TRADE'S NEXT FRONTIER 
------------------------------------- 
 
¶8. (SBU) While there are no Asian countries in the 45 set to 
have an FTA with Colombia by 2010, Colombia nonetheless has 
its sights set on its partners across the Pacific.  Colombia 
makes no secret of its desire to join APEC as soon as 
possible and signed a bilateral investment treaty with China 
in November on the margins of the APEC Summit (Ref B). 
Colombia wants to become a member of the Trans-Pacific 
Strategic Economic Partnership (P4) and has requested to join 
the U.S., Australia and Peru when those three countries begin 
to negotiate their entry with the current members (Brunei, 
Chile, New Zealand and Singapore). 
 
¶9. (SBU) Colombia is close to concluding bilateral investment 
treaties with South Korea and India, and Pardo said he 
expects negotiations of a bilateral investment treaty with 
Japan (set to begin in January 2009) to proceed quickly. 
Pardo noted that in the cases of South Korea and Japan, FTAs 
are likely on the horizon.  Preliminary talks with South 
Korea point to potential Colombian export growth in 
traditional sectors, such as flowers, coal, and coffee, as 
well as non-traditonal products, including ceramic tiles, 
fungicides, palm oil, and bovine semen.  In the case of an 
FTA with Japan, Colombia envisions expanded exports of sugar 
refinery parts, animal fats, fruits, vegetables, and other 
food and agricultural products. 
 
THE ELEPHANT IN THE ROOM: THE U.S. 
---------------------------------- 
 
¶10. (SBU) The U.S., of course, is one of the 45 countries 
with which Colombia hopes to have an FTA.  The U.S. is 
Colombia's largest trading partner, though its share of both 
Colombian imports (26 percent in 2007) and exports (34 
percent) have been declining over the last several years.  In 
July 2008, Colombia's Constitutional Court approved the 
U.S.-CTPA, clearing the final hurdle from the Colombian side 
(Ref E).  GOC and Colombian private sector leaders, while 
 
BOGOTA 00000015  003.2 OF 003 
 
 
frustrated at the lack of action on the part of the U.S. 
Congress, have reluctantly accepted the notion that the 
agreement is caught up in U.S. domestic politics, with no 
present end in sight.  While they recognize that getting the 
agreement approved will require additional GOC commitments, 
particularly on the issue of labor violence, they are 
steadfast in insisting that the text not be re-opened.  Both 
Trade Minister Luis Guillermo Plata and private sector leader 
Luis Carlos Villegas have told us privately that 
re-negotiation of the text would be a non-starter due to 
Colombian political sensitivities.  "We cannot go back to our 
Congress for a third time" Plata noted. 
 
THE OTHER ELEPHANT IN THE ROOM: VENEZUELA 
----------------------------------------- 
 
¶11. (SBU) The reason the nine FTAs only cover 45 countries, 
instead of 46, is the problematic relations Colombia has with 
its second largest trade partner, Venezuela.  Venezuela 
announced its withdrawal from both the CAN and the G-3 in 
¶2006.  Venezuela remains bound by its CAN commitments for 
five years from its announced withdrawal, but Colombia has 
been continually frustrated in its attempts to establish 
rules of the game, post-2011 (Ref C).  Minister Plata 
regularly bristles over the fact that, despite repeated 
requests, he has never been granted a meeting by BRV 
counterpart William Contreras.  Venezuela bought 18 percent 
of Colombia's exports in 2007, but only supplied four percent 
of its imports, which helps to explain the Venezuelan 
Government's lack of enthusiasm for trade discussions.  Trade 
relations with Venezuela will likely remain a principal GOC 
headache for the foreseeable future, and, along with 
uncertainty over the U.S.-CTPA, dull what otherwise has been 
a lustrous Colombian trade agenda. 
NICHOLS