USTR - Conference Call with Regina Vargo, Assistant U.S. Trade Representative for the Americas and Chief US Negotiator for US-Andean FTA Negotiations And Allen F. Johnson, Chief US Agriculture Negotiator
Office of the United States Trade Representative


Conference Call with Regina Vargo, Assistant U.S. Trade Representative for the Americas and Chief US Negotiator for US-Andean FTA Negotiations And Allen F. Johnson, Chief US Agriculture Negotiator
Washington, DC 12/13/2004

  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 Washington DC.

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.

I think 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.

I’ll take your questions.

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 United States?

VARGO:  We actually have Al Johnson on the line here too.  Let me ask Al to respond to that.

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 markets.

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 yet?

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 year.

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 America 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 Central America 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 CAFTA?

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 there?

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 the program.

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 made.

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 Canal 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 participation.

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 services?

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 area.


MODERATOR:  Anybody else?


MODERATOR: Yes, go ahead and ask your question.

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 Washington, DC.

MODERATOR:  Great, if there are no more questions, we’ll conclude this conference call.

REPORTER:  Neena, this is for the record?

MODERATOR:  Yes, for the record.

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