CODEL BLUNT URGES PRESIDENT SACA TO RESOLVE

UNCLAS SAN SALVADOR 003567 SIPDIS E.O. 12958: N/A TAGS: OREP PREL ETRD ECON ES CAFTA SUBJECT: CODEL BLUNT URGES PRESIDENT SACA TO RESOLVE REMAINING CAFTA-DR IMPLEMENTATION ISSUES ¶1. Summary: In a positive December 20 meeting with President Saca, a congressional delegation headed by Acting Majority Leader Roy Blunt (R-MO) acknowledged the efforts of the Salvadoran government in getting ready for CAFTA-DR implementation by January 1, and urged the President to resolve outstanding issues in the next few days so that CAFTA could enter into force with El Salvador and the United States on that date. The delegation also met with board members of the American Chamber of Commerce to hear opinions of the business community on CAFTA-DR. End summary. ¶2. A congressional delegation headed by Acting Majority Leader Roy Blunt (R-MO) and including Solomon Ortiz (D-TX), Mark Foley (R-FL),Ruben Hinojosa (D-TX),Gregory Meeks (D- NY),Dennis Moore (R-KS),and Mike Conaway (R-TX) arrived in El Salvador for a five-hour visit on December 20 to discuss CAFTA-DR with government and business leaders. Ambassador Barclay and a core Embassy country team briefed the delegation upon arrival. ¶3. The delegation lunched with several members of the American Chamber of Commerce (AmCham) board to discuss CAFTA- DR. The AmCham representatives said that CAFTA-DR was a terrific opportunity for business and that it had already improved economic conditions for some companies, even though the free trade agreement had not yet come into force. They emphasized the importance of Central America as a market of 40 million people, not just an internal market of 6 million in El Salvador. In addition AmCham said the benefits of trade capacity building programs would help all companies in international markets, citing exporters of specialty foods as an example of the type of small company that can benefit from free trade. ¶4. The delegation emphasized that American companies in Central America are a bridge to the U.S., and need to promote social responsibility in the countries where they are located. Several members said that U.S. companies provide benefits to those who work for them, but this does not come across back in the U.S.: instead, companies are bashed as exploitative of foreign labor. By increasing their profile in community development programs, U.S. investors would be able to preempt these arguments, and make promotion of U.S. companies doing business overseas easier for U.S. lawmakers. ¶5. The delegation met for 30 minutes with President Elias Antonio Saca, Foreign Minister Francisco Lainez, Minister of Economy Yolanda Mayora de Gavidia and Technical Secretary of the Presidency Eduardo Zablah. The tone was warm and supportive. President Saca opened by saying CAFTA-DR should enter into force on January 1, and that El Salvador is ready. He said economic signals about the agreement are positive, and the best migration policy is to create growth and jobs in El Salvador so Salvadorans remain home. ¶6. Mr. Blunt thanked President Saca for his personal leadership role in a tough legislative battle over CAFTA-DR. He asked Saca to maintain his leadership moving toward implementation, and highlighted El Salvador's potential to be the first country to take advantage of CAFTA. The delegation expressed support for a January 1 entry into force date but urged the GOES to use the pressure of the impending deadline to resolve remaining issues that could hold up entry into force with El Salvador. ¶7. President Saca insisted that remaining issues had been addressed, and he stressed the importance of a January 1, 2006 start date and its influence in setting a pace for other countries to follow. Minister Gavidia explained that all necessary legal reforms had been completed December 15, and summarized the Salvadoran efforts to resolve remaining issues. ¶8. Due to time constraints there was no opportunity for any press events; the only coverage came from photos released by the President's office of the meeting with the delegation. ¶9. This cable was not cleared by the Codel. Barclay