Honduran CAFTA Outreach to Environmental and Small

UNCLAS SECTION 01 OF 02 TEGUCIGALPA 000934

SIPDIS

STATE PASS USTR FOR AMalito and JYoung
STATE FOR WHA/CEN, WHA/EPSC, EB/CBA, EB/TPP/MTA
GUATEMALA FOR COMATT

E.O. 12958: N/A
TAGS: ETRD ECON HO
SUBJECT: Honduran CAFTA Outreach to Environmental and Small
Business Stakeholders.



1. Summary: On April 15th and 18th, the Ministry of Trade and
Industry hosted events entitled, "Getting Ready to Take Advantage
of CAFTA (Central American Free Trade Agreement)," and "CAFTA
Environmental Chapter Implementation and Environmental
Cooperation Agreement." The first seminar educated 22 micro,
small, and medium enterprises (MIPYMES, for its initials in
Spanish) on the provisions of CAFTA. The second seminar raised
awareness of the Environmental Cooperation Agreement among 80
private and public sector officials. This seminar was a part of
an ongoing effort by the GOH to ensure cooperation and
collaboration in the implementation of CAFTA environmental
commitments. Both events represent the important work that the
GOH is doing to ensure vulnerable groups in Honduran society can
benefit from CAFTA. End summary.


2. On April 15th, the Ministry of Trade and Industry sponsored a
seminar to explain the commercial benefits that CAFTA could bring
for small enterprises. Participants expressed their need for
technical assistance and funds to improve their production and
compliance capacities. Ministry representatives responded by
highlighting an announcement made earlier this year that the GOH-
owned mortgage and real estate lender, Fonaprovi, will be
transformed into a state bank, to be called Bancaprovi. Ten
percent of Bancaprovi funds will be used to finance MIPYMES.
International organizations, such as the Inter-American
Development Bank (IDB),Central American Bank for Economic
Integration(CABEI),and various German NGOs have offered funds to
the Honduran government to train small businesses in export
regulations and compliance. The Ministry of Trade and Industry
is also exploring ways to simplify complicated procedures that
currently limit MIPYMES' ability to export and import products to
and from the U.S. Participants said that if MIPYMES do not
receive government assistance, they would have difficulties
harnessing the potential benefits of CAFTA.


3. A second, environmentally-focused seminar was held on April
18, and included 80 participants from state, municipal, private
and non-governmental organizations (NGOs). Minister of Trade and
Industry Norman Garcia opened the meeting by emphasizing that,
although environmental industries are not well known in Honduras
and have yet to develop relationships with commercial interests,
their interactions will increase under CAFTA. He explained that
commercial business should be in compliance with environmental
laws. Humane Society representative, Marta Prado, explained
that, in her opinion, environmental protection and monitoring
should be the responsibility of non-governmental organizations.
Participants expressed concern that currently neither the
government nor private sector has the capacity to monitor and
enforce environmental laws in Honduras. If environmental groups
were responsible for ensuring compliance with current laws, then
civil society and NGOs would have authority to report violations
of environmental laws.


4. The representative of the Honduran Private Sector Council
(COHEP),Armando Urtecho, said that the private sector has every
intention of following environmental standards. That said, while
there are many laws and agencies that deal with this matter, very
few government officials truly understand it. Delayed and at
times unfair resolutions frustrate those that are trying to
comply with present standards. Urtecho questioned whether all
Honduran producers or only those exporting to the U.S. need to
comply with environmental regulations. GOH representatives
concluded that all producers ought to comply with environmental
laws. Participants suggested that the government, municipal,
public, and private organizations should set up new procedures
and work in coordination to accomplish environmental goals.
Presenters emphasized that CAFTA Chapter 17 (on environment)
creates new procedures for solving environmental disputes.


5. In his closing remarks, Minister Garcia indicated that, in
recognition of the aforementioned complications in resolving
environmental disputes, the Ministry of Trade and Industry and
the Ministry of Natural Resources and Environment are working
together and have opened liaison offices tasked with coordination
between Ministries. Vice-Minister of Natural Resources and
Environment Gerardo Salgado affirmed that enforcement of
standards currently on the books would foster environmentally
sustainable development in compliance with CAFTA commitments.
His ministry is hoping to develop public environmental awareness
campaigns and expedite claims processing procedures. He
recognized the need for transparent and expeditious dispute
resolutions and the need to consult public and private
stakeholders before passing new environmental laws. Were the
government to be successful in instituting the above procedures
and policies, it would represent a significant stride towards
prioritizing environmental sustainability. Private sector
representatives who were present, however, doubted GOH capacity
to accomplish these commitments.


6. Assistant USTR Mark Linscott presented the USG view, saying
the policy of the U.S. government is not to impose new
regulations on any country. He emphasized the need for the
government to allow civil society to become custodians of the
environment and to advise on transparent, fair, and expeditious
ways to solve environmental disputes. He concluded by
emphasizing the importance of empowering agencies and
organizations responsible for enforcing environmental law with
enough credibility and authority to successfully accomplish their
objectives.


7. Comment: Even though CAFTA has already been ratified here,
the GOH recognizes the continuing need to educate the public
about the agreement. Outreach events like the two recent ones
are intended to increase public acceptance of the accord and to
ensure that vulnerable Honduran groups are prepared to benefit
fully from CAFTA. During the first seminar, small entrepreneurs
complained that small and medium companies do not receive
government assistance and guidance in navigating international
trade procedures. We expect that continued GOH outreach efforts
should help to allay those concerns. () End Comment.

PALMER