business

This time, the sticking point was about cattle. Archive photo by Carlos Navarro

RP-US free trade talks stall over agriculture again

by Eric Jackson

On Friday the 13th the ninth round of free trade negotiations between the Republic of Panama and the United States of America broke off without an agreement, after several days of spectacular developments on the agricultural front. The week’s negotiations in Washington started badly on January 10, when Agricultural Development Minister Laurentino Cortizo submitted his resignation more or less simultaneously with the leak of a note sent last September by the Torrijos administration to the US Trade Representative.

Cortizo’s resignation was accepted by the president, who immediately appointed Guillermo Salazar as the new agricultural development minister. The following day Panama’s agricultural quarantine director, Concepción Santos, also quit. Santos called a press conference at the office he was leaving to explain his motives, but the new minister was able to intervene in time to prevent the event from happening.

The disputed note, purportedly bearing the signatures of Cortizo, Health Minister Camilo Alleyne and Commerce and Industry Minister Alejandro Ferrer, purported to confirm an agreement by which Panama would accept all health certifications of American meat and poultry at face value, without conducting any Panamanian inquiries. Panama would also renounce all agricultural quarantine regulations as apply to pet foods. But Cortizo said that his name was affixed to the note without his approval, and accused the Torrijos administration of putting Panamanian agricultural health at great risk.

Panama was one of more than 40 countries that banned US beef imports in the wake of two reported cases of Bovine Spongiform Encephalopathy (BSE, or mad cow disease). The first time it happened the Moscoso administration was in power and the report was years old, but the ban was maintained until shortly after Mireya left office. Many observers considered those measures to have been unduly prolonged due to the 2004 election campaign. Then last year another mad cow case was reported in the United States and a new set of Panamanian restrictions was imposed. In both instances US cattle ranching interests and the government in Washington bitterly protested that Panama’s standards are unscientific and that American meat is perfectly safe.

Cortizo, himself a cattle rancher, is a staunch supporter of this country’s relatively strict agricultural quarantine rules. Panama has no hoof and mouth disease, the Darien jungle being one of the effective barriers against the malady that afflicts Colombian cattle herds, but the United States occasionally does. We have not seen a mad cow infection on the isthmus, also unlike the Americans.

The National Agrcultural Organization (ONAGRO), took Cortizo’s resignation as a courageous act of principle. In a press release on the occasion of the former Solidaridad legislator’s exit from the Torrijos cabinet, the group noted a promise made last November to a farmers’ meeting in Los Santos, in which Cotizo vowed that he’d never sign a document that weakened this country’s agricultural sanitation controls. ONAGRO president Enrique Athanasiadis added at a press conference the following day that as far as his group is concerned, acceptance of American agricultural certifications would be a direct threat to the health of the Panamanian people and will not be tolerated. “If a free trade agreement is approved under these conditions,” he vowed, “we’re going to form a fighting team.” ONAGRO’s non-negotiable points also include a rejection of any duty-free importation of subsidized US farm products and the “first come, first served” system of import permits that Washington would impose in lieu of country by country agricultural quotas for various products.

Meanwhile in Washington, the Panamanian rancher’s observer delegation at the talks walked out and went home.

ONAGRO could be described as the militant end of the Panamanian farmers’s political spectrum, and their January 11 press conference was a joint production with the nation’s most militant labor unions and leftist organizations. Athanasiadis said that if an unacceptable free trade agreement is signed, “we’re going to take action --- drastic, but always avoiding violence.”

“We wouldn’t want to cut the nation’s food supply,” the ONAGRO leader warned, “but if necessary we’ll do it.”

Gabriel Castillo, speaking for the militant CONUSI labor federation, cited a number of practical and ideological objections to free trade with the United States, ranging from pressures that he said keep wages down to nefarious cultural effects. One of the unions’ bottom lines, he specified, was that “we can’t allow meat from sick animals.”

It wasn’t just the left. The more moderate and less effective CONATO labor federation (with whom CONUSI had a bitter falling out over last year’s Seguro Social reforms) also blasted the Torrijos administration’s apparent willingness to tear down Panamanian agricultural health protections and said that her organization would fight any such attempt in the courts. Virtually all Panamanian farm groups, even those representing the wealthiest and most conservative rural oligarchs, joined in making statements rejecting the contents of the leaked note to the US Trade Representative.

In the face of such pressures, Torrijos at least temporarily backed down. Over US protests that a deal had been struck, his administration characterized the infamous note as a mere draft and pleaded that it had not backed down on phytosanitary controls. The talks ended on January 13 without a deal, and the president commissioned a complete study of Panamanian agricultural health regulations that will be completed before another round of free trade talks with the Americans is held.

It has been reported that, aside from the agricultural issues, most terms of a US-RP free trade deal have been agreed. However, the talks have been held in secret, with such information as leaks out being parsimoniously doled out at the discretion of the respective governments. It is said that one outstanding unresolved non-agricultural issue is the US insistence upon a bidding process that gives American companies a better shot at Panamanian government contracts, especially in case a large Panama Canal expansion project is approved. If and when a deal is approved and its text is made public, it would be a safe bet that not only ranchers and organized labor would raise objections.

On the other side, this country’s American Chamber of Commerce (AmCham) and organizations representing grocers and restaurateurs are vociferous in their support for the principal of free trade between the United States and Panama. Their main selling point to the public will be cheaper imported products for consumers.

In a speech to AmCham, US ambassador William Eaton maintained that “the US negotiators have never asked their trade partners, including their Panamanian colleagues, to diminish quality or health standards.” Calling a free trade deal “a positive sign on the horizon,” he expressed confidence that differences would be worked out and asked AmCham to do what it can to mobilize Panamanians in favor of an agreement.

President Torrijos, for his part, set off on a tour of rural areas designed to reassure the nation’s suspicious farmers. “We are committed to bringing the sectors in the Interior of this country an opportunity to earn a dignified living and educate their children,” he said. He pleaded that in today’s world economy new rules are necessary.

Some objections rest on ideological principles that are unlikely to be satisfied. Archive photo by Eric Jackson