VARGO: Ok, we had our sixth round of
negotiations with Panama on a free trade agreement last
week here in Washington DC. I think we made excellent progress
during the week. And we agreed that
our next round would be the week of January 10. And we’ll do that here in
As far as
kind of where we stand in the talks right now, we have very few text issues
left. During the last round, we
were able to conclude our discussions on telecommunications, on sanitary and
phyto-sanitary text, on financial services, importantly including
insurance. We reached agreement on
the treatment of lawyers and the remaining professional services. So, I would say that our market access
issues in general are well advanced in the areas of industrial goods, government
procurement and services and investment.
Some selective issues remain; some of which relate to unique aspects of
the Panama Canal Authority.
the discussions that we had on agriculture were constructive. That’s an area that still needs more
work, but we’re making progress.
And on most issues, I would say we have some pending proposals for review
and work between the rounds.
REPORTER: Yes, this is Peter Shinn with the
National Associations of Farm Broadcasters. Just a quick, firm follow up on the
agriculture issues. What are the
primary key issues on agriculture between
Panama and the
VARGO: We actually have Al Johnson on the line
here too. Let me ask Al to respond
JOHNSON: Ok, well, first of all, good morning to
everyone. It’s a lot of the similar
issues that you would expect there to be in an agreement such as this we’ve seen
in the past. I mean there’s
sensitivities related to poultry, pork, beef, dairy, the issues related to corn,
rice. In their case, they’re
sensitive about things like potatoes and onions. Our case, we’re sensitive about sugar
and then a whole series of horticultural products that they would like on their
side to consolidate their CBI access they currently enjoy and we’d like to make
sure we have good access for our horticultural products into their
REPORTER: Al, this is Doug Palmer with
Reuters. I mean, do you think that
there will be any products excluded from this agreement, or is it just a matter
of finding how to structure more market access?
JOHNSON: Well, I never start any other
these negotiations with the attitude of exclusions. So, from my perspective, I think we’re
going to make a good effort in trying to deal with the sensitive issues. As you all know, in all the other
negotiations that we’ve had, including Central America, there’s a balance that
we try to get with the number of export products that I just mentioned – I
should also put in there vegetable oil is another one that is sensitive to them,
soy bean oil, etc. - in trying to
get access for our products into their markets while dealing with our issues
sensitively and the foremost one of which is sugar. But I anticipate that, at least so far,
my observation is that these folks are seriously engaged in trying to find a way
to include everything in the negotiations and provide some meaningful market
access opportunities. But, we’re
going to have to wait and see at the end of the day what the package looks
like. Obviously from our point of
view, we always start with the attitude that everything needs to be included.
REPORTER: Ambassador, this is Corey Henry with
Inside US Trade. Have you had an
opportunity to exchange market access requests and offers on sugar
JOHNSON: We’ve talked about sugar. We really haven’t exchanged any specific
offers. It’s mainly getting a
better feeling for each other as to what their interests are. And most of these situations ends up
being…they’re stressing the things they want offensively and how much they want
from us. And we’re doing the same
thing in reverse. And so, we
haven’t responded with any specific proposal at this point as it relates to
sugar. But, you know, obviously,
that’s something that we are going to have to undertake in the new
REPORTER: Doug Palmer again with Reuters. Just to be clear. I mean, you kicked off like a long list
of sensitive items. Those items are
mostly sensitive on the Panama side in terms of wanting to
control how much market access is provided?
JOHNSON: Yeah, and it’s typically how these
work. I mean, again, keep in mind,
for many of these negotiations, Central
was this way too, which is that the vast majority of the products they have
export interest in, they have already enjoy access in CBIs. So, from our perspective, as
proved to be, you know there’s a tremendous upside opportunity. Some sensitivities with some
commodities, but for the most part, we are trying to get access into a market
that largely already has access to us.
REPORTER: Allen, this is Peter Shinn with
NAFB. If I could just ask a kind of
a silly question. Why didn’t
Panama get wrapped in with
JOHNSON: Well, probably the better person to ask
that to is Regina.
VARGO: (Laughter). A variety of different issues at the
time. One is they are not part of
the economic Central American common market. They have a political affiliation, but
not an economic one. Part of that
relates to the fact that they are much more of a services oriented economy, as
opposed to a goods-oriented economy.
And finally, we had a number of investment kinds of disputes with them, a
number of bilateral issues that we wanted to clear the decks of before we
proceeded with a bilateral FTA, which we have done.
REPORTER: Thank you.
REPORTER: Regina, this is Martin Vaughn with
Congress Daily. Given your assessment that the text is nearly complete on this,
what are the prospects of sending this agreement to the Hill next year, possibly
in conjunction with the CAFTA? Do
you see that as a possibility?
VARGO: Marty, my job is to negotiate agreements
and somebody else makes the decisions about how they package them and when they
go. So, I really don’t have an
answer for you on that question.
REPORTER: Well, what’s your assessment of how
close you are, I guess, to being able to complete it? Is it going take one more round, a
couple more rounds?
VARGO: I think we have good prospects for
concluding in the next round. But,
that of course, depends on the right kind of give-and-take when we get
there. We’re going to look for a
good agreement so we don’t have a firm deadline.
REPORTER: And, just to clarify, you mentioned at
the very beginning that you had completed negotiations on telecom and SFP and
financial services and so forth.
Was that this round?
VARGO: Yes, no I was highlighting what we
concluded this round.
REPORTER: Ok, thank you.
VARGO: For example, we’ve already concluded
intellectual property rights, the services text was concluded previously, labor
and environment had previously been concluded. So, those were some of the remaining
issues that we had to deal with this time around.
REPORTER: Regina, it’s Corey Henry at Inside US
Trade. You mentioned that you
settled the issues with regard to lawyers and some other professional services
market access. Can you explain just
a little on how you were able to reach agreement on that issue, and maybe you
could give an update on negotiations on maritime services.
VARGO: Well, our lawyers would be able to
participate in the Panamanian market with respect to issues of US law and
international law. And we treated
most of the remaining professional services, and earlier we had handled other
US priorities, so for the remaining,
there are probably something like 30 or 40 categories of professional
services. We agreed to handle them
through temporary licensing.
REPORTER: This is Sally Schuff with
Feedstuff. Does the fact that the
agricultural issues remain for this upcoming round, does that signify that they
will be the most sensitive and most difficult? And how much opposition do you
anticipate from the US sugar lobby which traditional
opposes negotiating sugar in bilaterals?
VARGO: Al, you want to take that? Are you still
JOHNSON: I was giving a very eloquent response
while I was on mute.
(Laughter). So you really
missed out on the best part, Sally.
But, I’ll try to recreate it for you. At any rate, you’ve been around long
enough that you know that agriculture is generally, and
Regina’s welcome to disagree with me on
this, generally the most sensitive issue and one of the most difficult issues to
resolve. So that in and of itself
should be, you know, that disorienting or of a concern because we are usually
able to work them through. On the
sugar issue, specifically, I would expect the sugar industry’s position is not
going to change in terms of they’d prefer to not see these things dealt with in
a bilateral agreement. But, we’re
going to try to address sugar in the same way we have consistently in the past:
very sensitively. So that we can
achieve our offensive with all the different commodities I just mentioned. Many of which are grown or produced in
states that also produce sugar. And
at the same time, deal with it sensitively so it doesn’t disrupt our market or
REPORTER: Thank you.
REPORTER: This is Cesar Munoz with EFE. I have a follow up question on
this. I, for what you said, I
understand that you are not excluding sugar from the agreement, as you have in
other agreements? And if I may, a
question for Regina. On this issue of the investment
disputes, I wonder if you could elaborate on that, whether if you have resolved
all of them, or any that are outstanding?
JOHNSON: Well, on the first part of that, I think
we’ve already been clear on that.
We start everyone of these negotiations with the attitude that we are
going to include all the products and that’s our approach to this one as
well. And each one of these
negotiations ends up sort of differently in the process. I think, in this case, we’ll be able to
manage it in a similar way that we have in the past and, again, doesn’t disrupt
the sugar industry or the program.
VARGO: And on the investment disputes, just let
me say, we had a quite a broad range of them if you go back 2 years or so
ago. They either have all been
resolved or they’re well on their way to being resolved in a way that the
companies are all satisfied with the progress that’s been
REPORTER: Regina, this is Doug with Reuters. Up at the top in your introduction, you
were saying that market access issues are in general well-advanced, but then you
said that were some issues that were outstanding unique to the operation of the
Panama Canal Authority. Could you
talk about…what it is you’re talking about there?
VARGO: Well, we’re looking at government
procurement issues relative to the Panama Canal Authority. They actually run quite a good and
efficient operation right now and they would like to see that reflected in the
commitments that are made. Let me
say, in a general way, under Panamanian law, the Panama Canal Authority operates
fairly independently. So, we’ve
needed to be careful in this agreement to make sure that whatever access we
secure that’s important to us, that we receive it not only for the country of
Panama, but also for the Panama Canal Authority.
REPORTER: I see. Because the Panama Canal Authority will
have control over contracts related to expansion of the Panama
itself or anything…
VARGO: That’s right. And it’s a sensitive issue for them that
we’re proceeding with very carefully.
We don’t want any appearance of any
US interest in ownership of the
canal. That issue is behind
us. So, we’re merely looking at
they way US companies would participate in commercial activity that the Panama
Canal Authority would decided to open to private sector
REPORTER: Regina, this is Corey at Inside US
Trade. Can you tell us whether or
not you mentioned that the services negotiations have largely been wrapped
up? Are there still any attempts by
the Panamanians to secure any concessions in maritime
VARGO: The Panamanians still are interested in
the maritime issues. I think that
they are doing their own soundings here with respect to their prospects in that
MODERATOR: Anybody else?
MODERATOR: Yes, go ahead and ask your
REPORTER: Yes, this is Nestor Ikeda from the
Associated Press. I have a question
for Regina. Have you scheduled the date for the
probably the last date of these negotiations?
VARGO: Well, I’m not going to call it the
last round, but we are meeting the week of January the tenth in
MODERATOR: Great, if there are no more questions,
we’ll conclude this conference call.
REPORTER: Neena, this is for the
MODERATOR: Yes, for the record.