NATIONAL AND MEDIA REACTION TO CONGRESSIONAL APPROVAL OF

UNCLAS SECTION 01 OF 02 SAN SALVADOR 002174

SIPDIS

DEPT PASS USTR FOR RVARGO

E.O. 12958: N/A
TAGS: ETRD KPAO ES
SUBJECT: NATIONAL AND MEDIA REACTION TO CONGRESSIONAL APPROVAL OF
CAFTA-DR LEGISLATION



1. SUMMARY: Salvadoran elation at the July 28 U.S. Congressional
approval of the U.S.-Central America-DR free trade agreement (CAFTA-
DR) was evident in the first hours after the vote, when President
Saca called it a victory for democracy. Subsequent days have
brought heavy and constant press coverage of U.S. politics around
CAFTA-DR, of the agreement itself, and of the likely impact of the
agreement on El Salvador. The principal theme that has emerged is
that now that CAFTA-DR is a reality, the private and public sectors
must take steps to see that CAFTA-DR opportunities are exploited as
fully as possible. Additional reactions are likely to be muted
this week, when government offices are closed and much of San
Salvador is enjoying the country's August feast days. End Summary.

Official Reaction


2. President Saca appeared on the national news immediately after
the vote Thursday morning to express his satisfaction with the
outcome, calling the event "an important night for democracy and
for the country." In that statement and interviews the following
morning, Saca stressed that the vote was a good message for Central
America and democracy, economic openness and the free market. Saca
emphasized CAFTA-DR's benefits in generating stability, creating
employment opportunities, and making Central America attractive to
investors. On Thursday evening, Saca used time on national
television and radio to thank President Bush for his strong
support.

Opposition Reaction


3. The left-wing FMLN opposition party's reaction was negative,
criticizing CAFTA-DR for ignoring economic asymmetries between the
U.S. and Central America and predicting that Central America would
be overwhelmed by U.S. economic strength. A representative of
left-leaning rule of law advocacy group FESPAD (Fundacion de
Estudios para la Aplicacion de Derecho) claimed that CAFTA-DR is
inconsistent with labor provisions of the Salvadoran Constitution
and that CAFTA-DR article 1 violates the Central American Regional
Integration System (SICA) regulation. On Sunday, July 31, the FMLN
placed a paid statement that expressed its concern over the absence
of consensus among the political, social and productive sectors of
the U.S. and CA over CAFTA-DR and included a litany of well-known
and unsubstantiated allegations about the effects of the agreement.
The left-wing think tank FUNDE responded in a more moderate way
with a paid ad on July 29, "CAFTA-DR: A reality to Be Adequately
Addressed" that calls for the extension of CAFTA-DR benefits to
groups historically excluded from economic opportunity and for
measures to protect the vulnerable. Repeating a familiar concept,
FUNDE's ad says that the country cannot continue "privatizing
opportunity and socializing threats" and offered its collaboration
toward socioeconomic, institutional and legal changes necessary to
maximize opportunity and minimize threats in favor of the poor and
vulnerable.

Press Coverage


4. Salvadoran reaction to the early-morning July 28 vote by the
House of Representatives to approve CAFTA-DR implementing
legislation was received with initial elation that quickly evolved,
among all but the far political left, into a metaphoric rolling-up
of sleeves to prepare for life with CAFTA-DR. On July 28, the two
largest-circulation dailies, center-right "La Prensa Grafica (LPG)"
and right-wing "El Diario de Hoy (EDH)," carried large, front-page
headlines such as "Yes to CAFTA-DR: Bush Put It all in Play (LPG)
and both devoted considerable space to the story. The smaller
dailies also carried considerable coverage. Centrist El Mundo's
first three pages were devoted to the story and highlighted the
opportunities and challenges to be faced in preparation for the
entry into force of CAFTA-DR. Afternoon leftist daily Co-Latino's
five-page coverage included the news of approval in the House and
President Saca's positive reaction but also last-ditch efforts by
opponents to defeat CAFTA-DR, the FMLN's plans for a constitutional
challenge, and an article claiming that the general public had not
been adequately about "the dubious benefits" of the agreement. The
same sorts of reactions, positive and negative, also dominated the
news coverage on all national television channels on July 28 and

29.



5. Subsequent newspaper columns continued to exhort Salvadorans to
rise to the occasion and take advantage of CAFTA-DR:

LPG's July 28 editorial, "We Have CAFTA-DR Now," called for
confronting the hard reality of CAFTA-DR, overcoming special
interests, and using the period from now until entry-into-force to
accelerate preparation. The paper cited the agreement's symbolic
importance, saying Central America is now "on another page" and
that the day would remain a "date of maximum importance in the
history of our development."

On July 29, the EDH editorial entitled "CAFTA-DR opens doors for
regional development" echoed the theme of regional integration
raised a day earlier by centrist El Mundo and credited U.S.
Congressional approval to efforts of Central American presidents,
generational struggles in favor of globalization and the market
economy, and above all to "the conviction and moral force of
President George Bush."

LPG's July 29 editorial, "From Concession to Compromise," reminded
readers that "nothing is free," that the fundamental benefits of
the agreement are the stability of such a multilateral agreement
but that the moment called for unleashing the adrenaline that the
country needs to change.
"U.S. Approves FTA with Central America, Celebrated in El Salvador"
(left-wing Co-Latino, July 30): Lamenting that "preparation for
serious competition" did not start at the moment the idea of CAFTA-
DR was conceived, this editorial said, "for those of us who were
only mute witnesses of the negotiations and listeners to the [back
and forth], it only remains for us to wait and prepare for what
comes." The editorial characterized President Saca's "call for all
Salvadorans to celebrate" as "fairly difficult" since the
population never realized what was being negotiated, but even this
editorial leaves the choice to Salvadorans to wait either passively
or actively.

"CAFTA-DR Approved: Now What?" (LPG, July 30): Business columnist
Luis Membreno wrote: "We've mentioned many times before the
necessity of looking for new engines of .economic growth (and)
.generation of employment. We have no doubt that exports should be
one of these new growth engines.nor do we doubt that the way to
take advantage of opportunity of CAFTA is through the spawning of
hundreds and thousands of small, medium and large enterprises that
are capable of exporting to the U.S. market.. Let's take advantage
of the opportunities and minimize the risks so that this agreement
becomes the catalyst for development that we've been seeking.."

"Getting Them to Embrace CAFTA-DR" (LPG, July 31): Columnist Kalena
de Velado applauds supporters of CAFTA-DR who put the national good
above parochial interests and supported CAFTA-DR, and called on
Salvadorans to pull together like a family to ensure that maximum
good comes out of it.

"And How Will CAFTA-DR Benefit Me"? (EDH July 31): Columnist
Pedro Roque opined, "CAFTA-DR is here and represents challenges
for all. How any individual will benefit will depend on his
attitude and how he prepares for the challenge."

"Today it Depends on Us!" (EDH, July 30): Columnist Eduardo Torres
calls on Central America to thank President Bush for making CAFTA-
DR the center of his trade policy and for stressing the
geopolitical importance of the agreement. Given the great
confusion of the left in Latin America and the mixed outlook for a
number of countries, Torres calls CAFTA-DR a powerful tool to bring
democracy and development to the region.

"CAFTA-DR: A Great Opportunity to Exploit" (LPG, August 1):
Banking association executive Claudio de Rosa cites the challenges
to be met to take advantage of CAFTA-DR: upholding ILO labor
standards; respecting intellectual property; and respecting
environmental laws. Anything less, he writes, could lead to loss
of businesses and jobs. De Rosa also cites the benefits of
institution-building to be brought by CAFTA-DR.


6. Reactions for the remainder of the week are likely to be muted,
with the government closed and much of San Salvador away in
celebration of the August feast days. But the government and
private sector organizations are focused, and work will begin in
earnest on August 8. Issues that will be of immediate interest
will include the structure of the administrative body that will
implement CAFTA-DR, and programs to support social and producer
groups likely to be affected by implementation of CAFTA-DR. We
expect more attention to the process of ratification in Costa Rica,
Nicaragua, and the Dominican Republic, an issue that has not caught
the imagination of the Salvadoran press over the last several days.
BARCLAY