VZCZCXYZ0000
RR RUEHWEB

DE RUEHZP #0341/01 1172040
ZNR UUUUU ZZH
R 272040Z APR 09
FM AMEMBASSY PANAMA
TO RUEHC/SECSTATE WASHDC 3324
INFO RUCPDOC/DEPT OF COMMERCE WASHDC
RHMFIUU/DEPT OF HOMELAND SECURITY WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC
RUMIAAA/HQ USSOUTHCOM MIAMI FL
RHEHAAA/NSC WASHDC
RUEKJCS/SECDEF WASHDC
RHEHAAA/WHITE HOUSE WASHDC

UNCLAS PANAMA 000341 
 
SENSITIVE 
SIPDIS 
 
WHSC PLEASE PASS TO USTR 
 
E.O. 12958: N/A 
TAGS: ECON EFTA ELAB ETRD OREP OVIP PGOV PM PREL
SNAR 
SUBJECT: CODEL HOYER EXPRESSES SUPPORT FOR PANAMA FTA; 
LAUDS CLOSE RELATIONSHIP 
 
------- 
SUMMARY 
------- 
 
¶1. (SBU) On April 5, the members of Codel Hoyer met with 
President Martin Torrijos and selected members of his 
government to discuss continuation of what Majority Leader 
Hoyer described as an &extraordinarily close8 bilateral 
relationship, to thank President Torrijos for the cooperation 
that enhanced this relationship and shepherded accelerated 
economic growth and better governance before he leaves office 
on July 1, and to chart out next steps for passage of the 
U.S.- Panama FTA in Congress. The  no coat-no tie, Palm 
Sunday meeting at the President's Quarry Heights guest house, 
as opposed to the more formal setting of the Palacio de las 
Garzas, appeared to reflect the warm relationship enjoyed by 
this government and members of the delegation, a comfortable 
majority of whom voiced support for the FTA. &I want to get 
this done,8 emphasized the Majority Leader. End Summary. 
 
¶2. (SBU) U.S participants included Ambassador Stephenson, 
Majority Leader Steny Hoyer (D-MD), Rep. Roy Blunt (R-MO), 
Rep. Lucille Roybal-Allard (D-CA), Rep. Gregory Meeks (D-NY), 
Rep. Elijah Cummings (D-MD), Rep. Adrian Smith (R-NE), Rep. 
Gerry Connolly (D-VA), Rep. Debbie Wasserman-Schultz (D-FL), 
Rep. Aaron Schock (R-lL), and Rep. Norman Dicks (D-WA). 
Panamanian participants included President Martin Torrijos, 
First Vice President and Foreign Minister Samuel Lewis 
Navarro, Minister of Commerce and Industries Gisela de 
Porras, and Panama's Ambassador to the United States, 
Frederick Humbert. The Palm Sunday,  no coat-no tie, 
meeting took place at the President's rustically elegant 
Quarry Heights guest house, the former residence of the 
Southcom Commander. 
 
----------------- 
NEXT STEPS ON FTA 
----------------- 
 
¶3. (SBU) The fate of U.S.-Panama Free Trade Agreement, signed 
in June 2007, emerged as President Torrijos emphasized the 
need to work together to arrange the timing and sequencing of 
his push for labor and tax haven reforms desired by members 
of Congress. He and First Vice President Lewis explained that 
in order to successfully pass necessary measures in the 
National Assembly, they first needed an announcement that the 
FTA would be submitted to Congress. However, &time is 
short,8 stressed Torrijos, who will leave office on June 30. 
(Note: his pro-labor Democratic Revolutionary Party also 
controls the National Assembly; but the May 3 election places 
every national and local elective seat in contention.) Both 
Torrijos and Lewis noted that legislation would not pass if 
perceived by the Panamanian public as an &imposition8 by 
the United States. 
 
¶4. (SBU) Next, Lewis detailed the specific choreography: an 
Obama Administration announcement that the FTA would be 
submitted to Congress followed by legislation on labor * 
including changing the minimum number of persons necessary to 
form a union from 40 to 20* and immobilization of bearer 
shares, the anonymous instruments that facilitate tax evasion 
and money laundering. (Comment: Immobilization (regulation) 
of the shares would be a key advance in Panama,s financial 
transparency; without this measure, a Tax Information 
Exchange Agreement would have limited effectiveness, as no 
mechanism would exist to determine the beneficial owners of 
anonymous bearer shares.) Lewis predicted that lame-duck 
National Assembly action could be completed by the end of 
May. In response, Majority Leader (ML) Hoyer noted that a 
National Assembly vote on the labor and bearer shares issues 
would be &critical8 after an announcement by President 
Obama. &I want to get this done,8 the ML continued. 
However, he cautioned that a vote in the U.S. Congress might 
not be possible until after President Torrijos leaves office. 
 
------------------------------------- 
BUILDING ON AN EXCELLENT RELATIONSHIP 
------------------------------------- 
 
¶5. (SBU) Participants spent the larger part of the meeting 
praising and requesting suggestions for improving the overall 
 
bilateral relationship. Majority Leader Hoyer struck this 
theme in his opening remarks, emphasizing that the United 
States and Panama enjoy an &extraordinarily close 
relationship,8 and that &while the FTA is an important part 
of our partnership, our partnership goes beyond the FTA.8 
President Torrijos echoed this sentiment, expressing 
appreciation for Rep Dicks, remark that the transfer of the 
Canal was &the right thing to do.8 He also noted that 
strong relationship between U.S. and Panamanian 
infrastructure and the breadth of the bilateral relationship 
that included efforts such as English for Life, a Panamanian 
program to increase English education in Panama,s primary 
schools. Rep. Blunt thanked Torrijos for his commitment to 
capitalism and democracy, his fight against corruption, and 
his critical role in fighting against drug trafficking. 
 
¶6. (SBU) Turning to the theme of Panama,s brisk economic 
growth, Rep. Blunt stated that, &I don't know if any other 
country in the world has changed as much as yours in the past 
five years, and you don't get credit.8 Hoyer, commenting on 
the multitude of building cranes, designated Panama as 
&Dubai West.8 Rep. Dicks noted Seattle-based Stevedoring 
Services of America's concession to run Panama,s largest 
single port, Manzanillo International Terminal (MIT), a half- 
billion dollar investment. He also expressed gratitude at 
Copa Airlines, recent purchase of 13 Boeing 737 aircraft. 
Perhaps the most emblematic remark was made by Rep. Schock 
who noted that there are more Caterpillar D-11 bulldozers in 
Panama than in any other country in the world. Schock 
represents Caterpillar's headquarters in Peoria. (Note: 
Caterpillar recently broke ground on a $30 million training 
center in the former Howard AB and its equipment is widely 
used on Canal and infrastructure projects.) 
 
----------------------- 
SHARED SECURITY CONCERNS 
----------------------- 
 
¶7. (SBU) In response to questions by the Representatives, 
President Torrijos and his ministers discussed security and 
law enforcement concerns. He noted the capture of 400 kilos 
of cocaine the day before, stating, &the more drugs we stop, 
the less that gets into our country.8 VP Lewis added that 
&today we are not just transit, we are victims.8 He 
elaborated that drug traffickers now pay distributors with 
drugs, rather than cash, and that this practice has caused 
local crime rates to increase. Rep. Cummings expressed his 
concern about the devastating impact of drugs on cities such 
as Baltimore and praised Panama,s cooperation. Torrijos, 
responding to Rep. Cummings' query on what other assistance 
would be helpful, touted Panama,s high amount of drug 
seizures and efforts at regional cooperation, but lamented 35 
recent drug-related assassinations in Panama. He also asked 
for more intelligence sharing, a few radar installations, and 
more Coast Guard presence. 
 
¶8. (SBU) Rep. Roybal-Allard also discussed the value of the 
Coast Guard mission, noting that she is on the appropriations 
subcommittee the funds that organization. She focused her 
remarks on the value of youth programs to prevent gang 
activities and noted a strong correlation between funding 
alternative venues for vulnerable youth and a decrease in 
gang presence. President Torrijos embraced this topic, 
listing several youth initiatives of his government, 
including 180,000 scholarships, $90 million spent on sports 
facilities, and the purchase of 40,000 laptops for schools. 
Ambassador Stephenson stressed robust USG cooperation with 
Panama in this area by leveraging after school programs of 
organization such as the Kiwanas, Rotarians, and Lions Clubs. 
 
¶9. (SBU) Torrijos commented on the increasing sophistication 
of gangs, although noting that they are less a problem in 
Panama than in the rest of Central America. The President 
linked his crackdown on pirated CDs as a way to cut off gang 
revenues, and ML Hoyer noted the necessity of &following the 
money.8 
 
------------------------- 
PANAMA - "A REAL ECONOMY" 
------------------------- 
 
¶10. (SBU) Following the money lead to renewed conversation on 
tax havens. Torrijos explained, "We are a services economy, 
but a real economy. ... There is not a building here with 120 
companies. ... Banks here lend money for big projects, and 
finance trade through the Colon Free Zone distribution 
center.8 Torrijos also stated that Panama needed a &level 
playing field on this issue8 and a transition period. Lewis 
stated that the GOP was looking at ways to regulate bearer 
shares, and Minister of Commerce and Industries Porras added 
that her government aimed to ensure that lawyers know the 
identity of the beneficial owners of the shares. 
 
¶11. (SBU) Other topics included Panama,s implementation of 
an accusatory system of justice, raised by ML Hoyer. 
President Torrijos replied that this change may take longer 
than expected to implement. Rep. Wasserman-Schultz expressed 
gratitude for Panama,s abstention on two anti- Israel 
resolutions in the UN, but also requested that Panama abstain 
on a third resolution on Palestinian rights. VP Lewis noted 
that Panama examines all resolutions on a case-by-case basis 
and would like to see resolutions on this topic combined or 
eliminated, rather than simply rolling over every year. 
 
¶12. (SBU) The visit of Codel Hoyer also included a tour of 
the Miraflores Locks at the Panama Canal, a briefing on the 
$5.25 billion Canal expansion project by Administrator 
Alberto Aleman, and a dinner hosted by President Torrijos 
that included the majority of Torrijo,s cabinet. During 
toasts at dinner, Rep. Blunt mentioned that although he and 
his friend of many years, ML Hoyer, rarely voted the same way 
on most issues, they both would vote for passage of the 
U.S.-Panama FTA. 
 
 
STEPHENSON