VARGO: Tucson where we have been holding the sixth round of negotiations with Columbia, Peru and Ecuador.  And we have a Bolivian team here as well as an observer.  We began meeting on Tuesday.  Some of the topics will continue their discussion through today.  Intellectual property rights will continue through tomorrow and telecommunications and e-commerce will take place in Washington, DC next week.  Those were to handle some scheduling conflicts.

But we just held a brief press conference for the Andean press that’s here at the negotiations.  And I think it’s interesting that my counterparts characterize this round, each of them, as the same way I would: that this is the most productive round that we have had yet.  We had a number of important developments.

First, I would highlight that coming in that we agreed that we could benefit from some additional work past January, which had been up til now has been our last scheduled round.  So we have agreed that we will meet the week of January 31^st, the next location will be in Columbia.  That we will do another round in mid-March, but that we will continue to assess what our needs are here in terms of timing and progress.  But we all would like to see these negotiations conclude in the early part of next year. 

We made some good progress here this round on the industrial market access talks.  (On the good sides our market-access talks are divided into three different areas: agricultural products, textiles and industrial goods).  We made improved, we enhanced our offers with Peru and Columbia, as they did.  And we are in the process of doing so with Ecuador.  They needed a little bit more time to evaluate the offer that was on the table.  But, we have moved a long way towards consolidating their ATPA preferences on industrial goods, and for their part, they made a significant movement to addressing areas of US interests.  We have some more work to do there, but I think now we are getting down to the finer issues in terms of improving the quality of the offer in some areas.

We also had a good exchange on agriculture.  We worked principally at a bilateral level and we were able to develop a work plan with each country to kind of work through our priorities and sensitivities.  And everybody has their objectives for information and ideas to bring into the next round. 

On the text side, we now have all of our proposals out on the table. In virtually every area, not necessarily uniformly evenly, but really virtually every area, we were able to make progress on the text, to begin to streamline text and remove brackets and make agreements on various elements.  So, the overall sense here at this round was very positive.

On the edges of the round, regarding if you will the atmospherics and other things that took place, I think it’s interesting that we started off our week here with Congressman Kolbe who was here for two days and very generous with his time in meeting with a number of the participants that were here.  For their part, Columbia and Peru, in particular, came with large Congressional delegations.  They had on the order of 20-30 people apiece.  Ecuador hosted the last round; I think they didn’t feel the same need to bring a group like that this time.  OPIC came and presented some very interesting programs that they will be operating that can help with the credit needs of micro-companies in the region.  We had a networking business exchange with the local Tucson businessmen.  So, we had a variety of other activities that were happening here alongside the negotiations as well.  But it’s been a good week.  What kinds of questions can I answer for you?

REPORTER:  Janet Van Grasstek with the Washington Trade Report.  Was there any progress made on the price band issue in the agriculture talks?

VARGO:  I don’t think that that is an issue that’s just going to, you know, vanish one day.  I think part of the positive discussion that was in agriculture was people did do a little bit more brainstorming on the issue.  But in particular, this idea that we will begin to focus in on this issue product by product and see what are the various tools that we can lend to the process that would help address some of the objectives that the price band provides for the Andeans.

REPORTER:  Regina, this is Corey Henry with Inside US Trade.  Can you tell us, you know specifically always in the past, the goal had been to try and get the negotiations wrapped up before or around Inauguration Day in January.  But is it fair to characterize that there’s, you know, sort of continuing a lot of differences of agriculture, IPR that would make let the decision to extend the talks into March, or what would you pinpointed as the areas of cause that you would need to delay the deadline?

VARGO:  Well, I think the first thing I’d say, is that the pace that we had set up for January, we always realized was a challenging one.  And the Andeans are not only coming into this negotiation with their own thoughts, but they need to coordinate.  And I think that added just a time element to the process that made January unrealistic.  Beyond that, Corey, I think you have accurately identified the two most difficult areas of the negotiation, which are intellectual property and agriculture, but we had as I said, everybody felt that while we had no concrete result to point to at this point, everybody felt that the discussion, the tone and the development of the work plan [on agriculture] was very positive.  And intellectual property is still meeting, but we had good talks so far this week in the areas of copyright and enforcement.  So, you know, all of the groups are making some headway.

REPORTER:  Joanna Ramey, Fairchild Publications.  Regina, what progress can you, what specifics can you give on the textile parts of the negotiations and are TPLs an issue?

VARGO:  I would say, first of all, that textiles is still meeting today.  So, I don’t have a full report on this round from textiles.  More generally in this agreement, we’ll be trying to build on the kind of textile partnership that already has a base in the Andean Trade Preferences Act.  Now within the textile area, in negotiations, almost everybody starts out by asking for TPLs, but they are sensitive in the United States.  And we are very careful in how we approach them.  One of the things though that I think distinguishes the Andean region is that they are fabric producers themselves as well, so it is perhaps somewhat less of a concern to them than to some other countries we may be in discussion with.

REPORTER:  Regina, it’s Corey again at Inside US Trade.  You mentioned in your opening remarks that there had been full exchange, there’s now full exchange of text on the table.  And I wonder if it would affect agriculture, if that includes US offers on sugar and other TRQ commodities, and likewise for the Andeans that include some of their sensitive agriculture commodities?

VARGO:  At the beginning of the negotiation, everyone indicated that they we willing to deal on all products.  But as you would expect from the negotiating process you’re familiar with, the normal pacing would be to begin with the easier products and leave some of the more contentious and sensitive products for later, and I think the same thing is true here.

REPORTER:  OK.

REPORTER:  Regina, this is Doug Palmer with Reuters.  I just wonder, I mean you have done a couple of these now…

VARGO:  I feel that way… (laughter).

REPORTER:  I mean, is there greater uncertainty in your mind at this point about being able to come away with a successful agreement that’s going to be satisfactory for US agriculture and US industry than say other negotiations that you’ve been involved in?

VARGO:  That’s an interesting question, Doug.  And I would have to say no.  I don’t feel any less confident, if you will, being able to reach an agreement with these countries that can work for everybody.  I think we just have to be careful to keep our minds open to some creative solutions.

REPORTER:  Ok, thanks, thanks very much.

REPORTER:  Janet Van Grasstek, Washington Trade Report.  Is there any concern that the additional rounds of negotiations could start to run into the expiration of TPA which expires in the middle of the year and has to be reauthorized?

VARGO:  It’s possible that the negotiations… First of all, I believe the way TPA is written, to use the initial grant of authority, you actually have to sign before that runs out.  The Miscellaneous Trade Bill made clear that the date we are looking at there is, it’s either June 30 or July 1, I’m not sure which one, but you have to recall that also under TPA procedures, we need to provide the Congress with a 90 day notice of intent to sign.  So, if we conclude in say, the first quarter, we could probably make use of that grant, and in the second quarter, maybe not.  So, is there a possibility, yes, there’s the possibility that we would not conclude in that timeframe.  I think that we’re more concerned at the table about getting a good outcome that could be widely supported than trying to meet a forced deadline.

REPORTER:  Regina, this is Doug Palmer again.  Do you expect to be around through the end of these negotiations?  (Laughter.)

VARGO:  Well, Doug, I am not a political appointee, I am a career appointee.  And since I don’t know when these negotiations are going end, I don’t know how to answer your question.  But, I have no plans at this point to do anything other than what I’m doing right now.

REPORTER:  Ok, thanks.

REPORTER:  Regina, its Corey again at Inside US Trade.  Was there any discussion this week on a number of the investment problems that have been raised with respect to Peru and Ecuador and the possibility that if there was no movement on those issues, that those countries could be left behind?  I just…

VARGO:  I’m sorry.  Could you go back, Corey?

REPORTER:  Sure.  There’s this issue of some investment disputes of Peru and Ecuador that have been raised as possibly leading to these countries excluded from the agreement.  And I was just wondering if there was any discussion this week on these issues?  Perhaps an update on progress these countries have made.

VARGO:  Yes, now we don’t discuss them in the context of the FTA directly, but we always take up the full range of bilateral issues that we have with the countries.  And we certainly do monitor the progress on these investment disputes because they are extremely important.  Peru, in particular, has recently appointed a gentleman, hold on a minute…  We’ll look around and get you the specific name, but he’s a man of some stature in Peru.  He’s a former defense minister.  And they have put him in the role of looking into each one of these disputes and trying to make sure that they are operating, monitoring progress and looking for ways to move them forward successfully.  His name is, I’ll spell it for you, it’s Loret de Morla.  And similarly, we’ve reviewed with Ecuador where their issues are right now too.

REPORTER:  (Corey Henry) Do you detect any progress with Ecuador?  Did they give you any sort of research that they were trying to respond…

VARGO: It’s clear that efforts are underway.  The other thing I’d say is a number of the Ecuadorian cases have actually, are in the courts right now.

REPORTER:  Regina, (inaudible)…

VARGO:  If you want to hold on for one second…

REPORTER:  Sure.

VARGO: Ok, go ahead.

REPORTER:  (Doug Palmer) I just want to understand, is the working goal right now to try to finish at the March round, but it’s just uncertain whether you will be able to do that or not?  Is that sort of the target…

VARGO:  I think that’s probably a pretty good description.  Yeah, I think we’ve laid out two more rounds, but we don’t want to be overly confident that two more rounds will be sufficient.  So, you know, we’ll continue.  This is a work in progress and we’ll continue to assess.

REPORTER:  Ok, thank you.

VARGO:  But we’re hoping this doesn’t turn into the eternal negotiation, you know… (Laughter).  We’re looking at this kind of step wise.

REPORTER:  Regina, Joanna Ramey again at Fairchild Publications.  Regarding CAFTA, do you have any latest insight on the timing of sending that to the hill?  And also the DR conclusion and the latest on the spat with the high-fructose syrup soda act?

VARGO:  I guess I can say two things.  One is I haven’t been in Washington.  There may have well been some discussions on the timing of the CAFTA legislation, but that would be handled by our legislative affairs, and you might want to direct that question to them, because it hasn’t been my focus this week.

I am, though, aware of some of developments on the high fructose corn syrup front with the Dominican Republic.  I believe it was either Thursday or Friday morning that the three major political parties put out a kind of manifesto with a number of points in it.  One was that they all agreed that the high fructose corn syrup tax should be repealed.  And that they also thought it was appropriate that the government should look at ways to reinforce the competitiveness of the Dominican Republic sugar industry.  I don’t think those are their exact words, so please take those as kind of trying to capture the idea.  On that basis, the Senate took the issue up, I believe in session on Friday.  Suspended that work to focus more on that second aspect: what is it the government could do to, that would be WTO and CAFTA consistent, that could enhance the competitiveness of their sugar industry.  And they are going to resume, I think, discussions in the early part of next week.

REPORTER:  Is there a deadline that the US has given the DR to get this through?

VARGO:  We have not given them a specific date.

REPORTER:  Then, how long do you think you’ll before moving forward on CAFTA?

VARGO:  As I said, I’m not privy to it, whatever is the latest on the CAFTA timing, so I would a great deal of difficulty giving you a good answer to that question.

REPORTER:  Thanks so much.

VARGO: Ok?

MODERATOR:  Thank you very much you guys.