HONDURAN VIEWS OF WTO CANCUN MINISTERIAL

C O N F I D E N T I A L SECTION 01 OF 02 TEGUCIGALPA 002355

SIPDIS

STATE FOR WHA/CEN, WHA/EPSC AND EB
PASS TO USTR FOR ANDREA GASH DURKIN

E.O. 12958: DECL: 10/03/2013
TAGS: ETRD EAGR ECON ELAB PREL HO WTO
SUBJECT: HONDURAN VIEWS OF WTO CANCUN MINISTERIAL

REF: A. (A) STATE 268181


B. (B) STATE 270764

C. (C) STATE 257469

Classified By: Ambassador L. Palmer for reasons 1.5(B) and (D)

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Summary
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1. (C) In the wake of the breakdown of the Doha agenda
negotiations at the Cancun WTO ministerial, Honduran
officials seemed most interested in the impact on the
agricultural talks in the Central America Free Trade
Agreement (CAFTA) negotiations. The GOH will now push
strongly in the CAFTA talks for special safeguards or
continued tariff protection for products that receive U.S.
export subsidies and/or domestic supports. GOH trade
officials also are very keen to understand how Brazil's
leadership role in the G-20 plus group (called G-21 or G-23
here) will affect USG strategy in the Free Trade Agreement of
the Americas (FTAA). Within the Doha (DDA) negotiations,
Honduras is seeking a certain form of special and
differentiated treatment in the agricultural tariff
reductions. Honduras steered clear of being drawn into the
G-21 during Cancun. To the extent that USG negotiators can
be responsive to its approach, Honduras may become an ally
for constructive and ambitious DDA agricultural negotiations.
End Summary.

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Cancun May Make the CAFTA Agriculture Talks Easier
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2. (C) Honduran Trade Policy Director and chief CAFTA
negotiator Melvyn Redondo went straight to the Managua round
of the CAFTA negotiations directly from Cancun with one
question for the USDEL: How is the USG going to respond to
Central American concerns about U.S. agricultural subsidies
and domestic supports in the CAFTA "now that it is clear that
there will be no reductions agreed to in the WTO?"
Negotiatiions over a limited agricultural safeguard are now
seen as a potential answer to that question. Comment: Thus,
from one point of view, it appears that the Cancun
developments may make it easier to reach agreement on
agriculture in the Central American talks. End Comment.

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But What Does It Mean for FTAA?
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3. (SBU) EconOffs met with Minister of Industry and Trade
Norman Garcia and Redondo on September 30. They delivered
Ambassador Zoellick's Financial Times op ed piece on Cancun
and the CAFTA Labor Track II demarche as requested in refs b
and c. Garcia asked about the USG's strategy for moving the
FTAA negotiations along. EconCouns reiterated the USG's
commitment to pursuing an FTAA on the established timeframe.

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Honduras' Objectives in the WTO
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4. (SBU) Going into Cancun, the GOH's key objective for the
Ministerial was to fight for special and differentiated
treatment, vis-a-vis agricultural tariff reduction, for
developing countries like Honduras that already have
relatively low bound and applied tariffs. In a September 5
meeting with EconCouns, Redondo said that the number of
developing countries with similar tariff structures was very
small and mentioned Sri Lanka as an example. He added that
Honduras would not be required to cut industrial tariffs
because of its income level. After Cancun, Garcia and
Redondo seemed a bit bemused by their Central American
colleagues' involvement in the G-21 and a bit glum that their
"good behavior" hadn't been recognized (this was a dig at the
fact that USTR Zoellick is not visiting Honduras in his early
October trip to the region).


5. (C) Comment: The GOH's trade team is very thin, and CAFTA
has been the focal point of its trade policy this year. In
any case, Honduran trade policy in the WTO is typically very
narrowly focused. In Doha, for example, Honduras' prime
focus was to maintain and expand the country's exception for
free trade zones under Article 7 of the Subsidies Agreement.
In the DDA negotiations themselves, the key objective has now
shifted to protection from further tariff reduction on
approximately 20 categories of "strategic" and "sensitive"
agricultural products, in recognition of Honduras' relatively
modest tariff levels compared to other developing countries.
If the USG is able to be responsive to this approach,
Honduras may become an ally for constructive and ambitious
DDA agricultural negotiations. End Comment.
Palmer