CAFTA Debate Heats Up Ahead of Possible December 15

UNCLAS SECTION 01 OF 02 TEGUCIGALPA 002757

SIPDIS

STATE FOR WHA/CEN, WHA/EPSC, EB/TPP, INR/B AND DRL/IL
STATE PASS USTR
STATE PASS AID FOR LAC/CAM
DOL FOR ILAB
GUATEMALA FOR AGATT SHUETE
TREASURY FOR DDOUGLASS
ROME for Embassy The Vatican

E.O. 12958: N/A
TAGS: ETRD ECON PGOV EAID KIPR EAGR ELAB PINR HO
SUBJECT: CAFTA Debate Heats Up Ahead of Possible December 15
Vote; Ratification Remains Likely But Vote Could Be Delayed

REF: A) Tegucigalpa 2483

B) Tegucigalpa 2315


1. Summary: As the Honduran Congress considers CAFTA and
moves closer to a vote, both supporters and opponents of the
agreement have been making their views known in public fora
and through the press. In recent weeks CAFTA has been
publicly denounced by Roman Catholic Cardinal Oscar
Rodriguez (considered to be one of the leading Latin
American candidates to be the next Pope),campesino leaders,
and a ruling party congressmen, who is a presidential
candidate. In response, administration officials have
stepped up their efforts at outreach and promotion, ahead of
a ratification vote which they hope will take place on
December 15. Though the opposition has turned up the volume
on their objections, administration officials are still
expressing confidence that CAFTA will be approved. Post
also expects that the National Congress will approve CAFTA
when it votes on this issue. The vote could be delayed
until late January/early February. End summary.


2. In the weeks since October 28, when legislation for the
approval of U.S.-Central America Free Trade Agreement
(CAFTA) was submitted to Congress (ref A),groups and
individuals opposed to CAFTA have increasingly been making
very vocal public statements to express their opposition to
the agreement.

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Cardinal Rodriguez: CAFTA "Anything but free"
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3. On November 26, in comments widely covered by the
Honduran press, Cardinal Oscar Rodriguez declared that the
so-called Free Trade Agreement is "anything but free".
While attending the annual assembly for Central American
bishops in Costa Rica, Rodriguez stated that CAFTA "is only
free for the party which has power, and Central Americans do
not. How can we talk about free trade when protectionism
persists in the United States?"


4. Rodriguez acknowledged that the agreement will provide
benefits for certain sectors of the Central American
economies, but not, he claimed, to the agricultural sector,
where poor Central American farmers will be forced to
compete against subsidized products from the United States.
"It will be impossible for our farmers to compete under
these conditions."

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Campesino Organization: "An Economic Conquest"
-------------- -


5. The General Secretary of the Coordinating Council for
Honduran Campesino Organizations (COCOCH),Felix Vasquez,
has announced that a march on Congress will be held December
14, the day before administration officials say that
Congress will vote on CAFTA. Speaking to the press on
December 1, Vasquez denounced CAFTA as an "economic
conquest" of Honduras, saying that "small and medium-sized
businesses will disappear, since no protection of our
products or our markets was negotiated" in the agreement.
Vasquez claims to have collected ten thousand signatures on
a petition against CAFTA, which he hopes to present to
President of the Congress (and National Party presidential
candidate) Porfirio "Pepe" Lobo at the culmination of the
march on December 14.

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Gilberto Goldstein: "CAFTA is premature"
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6. The only presidential candidate to have spoken publicly
about CAFTA is National Party Congressman Gilberto Goldstein
(considered to have very little chance of winning his
party's nomination). Goldstein came out against CAFTA in
comments published in the press on November 29, arguing that
the details of the agreement have not been sufficiently
explained to all sectors of the Honduran economy, and that
poor Honduran farmers have not been adequately trained and
prepared for the transition that CAFTA will bring. He
further suggested that Central America is politically
unready for such an agreement, saying that, "Before signing
any commercial treaty that involves all Central Americans,
we should first solidify and unify ourselves, we who form
the great Republic of Central America, in which we have
invested 50 years without achieving our desired goal."


7. Comment: While Post understands that President of the
Congress Porfirio "Pepe" Lobo is working closely to promote
congressional approval of CAFTA, neither he nor any of the
other leading presidential candidates, such as National
Party candidate Miguel Pastor or leading Liberal Party
candidate Mel Zelaya, have spoken publicly about the
agreement. See septel for reporting on their comments
during private meetings with EmbOffs. End Comment.

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GOH Continues to Get Its Message Out
--------------


8. At the same time, administration officials have
intensified their efforts to promote CAFTA and explain its
contents to a skeptical public. (Note: A September CID-
Gallup poll put public support for CAFTA in Honduras at 49
percent, the lowest level of support in Central America. End
Note.) Minister of Trade and Industry Norman Garcia and
Minister of Agriculture Mariano Jimenez have now held closed-
door outreach meetings with every party in Congress (ref B),
though some Congressmen still complain to the press that
they lack a sufficient understanding of the agreement.
Other GOH officials, including the Minister-Advisor for
Promotion of Foreign Investment Camilo Atala and the usually
reticent Chief CAFTA Negotiator Melvin Redondo, have been
appearing on radio and television news programs explaining
the benefits of CAFTA. In the last week of November the
Ministry of Trade and Industry published a special six-page
section in all four national newspapers, entitled "Myths and
Realities About the Free Trade Agreement."

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Pushing for a December 15 Vote
--------------


9. Minister Garcia told EconOffs that Congress will vote on
CAFTA on December 15, and other Trade Ministry officials say
that President Ricardo Maduro has scheduled a meeting with
congressional leaders to discuss the agreement on December

14. Melvin Redondo has even announced the December 15 date
publicly, a clear sign that administration officials are
pushing Congress to act before the year-end recess.
However, National Party Congressman Juan Orlando Hernandez,
the "Whip" of the Congress, has said that a vote on CAFTA is
unlikely during the week of December 13-17, as there is
still some vocal opposition to the agreement, including
within the National Party delegation. According to
Hernandez, while the executive branch is pushing for a quick
vote on the agreement, congressmen, who have to face voters
soon on the issue (primary elections are in February 2005),
are much more reluctant.

Pierce