Identifier
Created
Classification
Origin
07SANSALVADOR476
2007-03-13 15:51:00
UNCLASSIFIED
Embassy San Salvador
Cable title:
A/S Sullivan and MCC Bent Visit on CAFTA Anniversary
how-toVZCZCXRO4037 RR RUEHLMC DE RUEHSN #0476/01 0721551 ZNR UUUUU ZZH R 131551Z MAR 07 FM AMEMBASSY SAN SALVADOR TO RUEHC/SECSTATE WASHDC 5494 INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE RUCPDOC/USDOC WASHDC RUEATRS/DEPT OF TREASURY WASHINGTON DC RUEHLMC/MILLENNIUM CHALLENGE CORP WASHINGTON DC RUEHRC/USDA FAS WASHDC
UNCLAS SECTION 01 OF 02 SAN SALVADOR 000476
SIPDIS
STATE PASS USAID/LAC
STATE ALSO PASS USTR
USDOC FOR 4332/ITA/MAC/WH/MSIEGELMAN
3134/ITA/USFCS/OIO/WH/PKESHISHIAN/BARTHUR
SIPDIS
E.O. 12958: N/A
TAGS: ECON ETRD EINV EAGR EAID ES
SUBJECT: A/S Sullivan and MCC Bent Visit on CAFTA Anniversary
Summary
-------
UNCLAS SECTION 01 OF 02 SAN SALVADOR 000476
SIPDIS
STATE PASS USAID/LAC
STATE ALSO PASS USTR
USDOC FOR 4332/ITA/MAC/WH/MSIEGELMAN
3134/ITA/USFCS/OIO/WH/PKESHISHIAN/BARTHUR
SIPDIS
E.O. 12958: N/A
TAGS: ECON ETRD EINV EAGR EAID ES
SUBJECT: A/S Sullivan and MCC Bent Visit on CAFTA Anniversary
Summary
--------------
1. Assistant Secretary of State for EEB Daniel Sullivan and
Millennium Challenge Corporation Deputy CEO Rodney Bent visited El
Salvador February 28 and March 1 to commemorate the one-year
anniversary of CAFTA-DR's entry into force. In meetings with GOES
officials, the private sector, and the media, both officials
highlighted the role of CAFTA-DR in stimulating economic growth as
part of a broader agenda of total economic engagement. A/S Sullivan
and Ambassador Glazer discussed the GOES' refusal to allow U.S.
table eggs into El Salvador with Vice President Ana Vilma de Escobar
and other senior GOES officials. Other meetings brought attention
to domestic bio-fuel production, El Salvador's potential as a
regional transportation and logistics hub, and violent crime as a
deterrent to economic growth. End summary.
CAFTA-DR at One Year
--------------
2. Ambassador Glazer and A/S Sullivan joined President Saca and
other GOES officials at a formal ceremony marking CAFTA-DR's one
year anniversary on March 1. In a speech extensively covered by
national media, A/S Sullivan congratulated the Salvadorans for their
remarkable progress since 1992 in reducing poverty and rebuilding a
war-torn society. He recognized the role of the GOES in creating
economic opportunity for its people through an aggressive reform
agenda and taking a leading role in CAFTA-DR implementation.
Highlighting U.S. - Salvadoran bilateral cooperation, he described
CAFTA-DR as one part of our total economic engagement with El
Salvador, which also includes programs run by the MCC, USAID, OPIC,
TDA, and other USG agencies (see www.state.gov/e/eeb/ for the full
text of the speech). President Saca reinforced many of these themes
and clearly stated his objective to ensure that economic growth has
a direct role in alleviating poverty.
3. A/S Sullivan visited Arrocera San Francisco, a Salvadoran food
processor and distributor that has taken advantage of CAFTA-DR
opportunities to expand its product line for export to the United
States and add 200 new employees in the last year. The firm exports
its own products and serves as a distributor for a number of smaller
food processors that otherwise would find it difficult to reach U.S.
markets. Arrocera San Francisco has already established a
distribution center in the United States and plans to establish five
more, creating more jobs in the United States. In press events and
meetings with GOES and other officials, A/S Sullivan drew attention
to the company as an example of how CAFTA-DR benefits both nations
by directly employing more Salvadorans and more Americans as a
result of increased trade.
4. Beginning with his first event with Minister of Agriculture
Mario Salaverria, A/S Sullivan pressed the GOES to allow U.S. table
eggs and other poultry products into El Salvador. He also raised
the same USG concerns with Vice President Ana Vilma de Escobar and
Minister of Economy Yolanda de Gavidia the following day. He
stressed that such trade irritants must be resolved so our two
governments could focus attention on broader areas of interest and
cooperation. Still claiming that it was a technical issue,
Salaverria said he was willing to meet again with USDA and USTR
officials to try to resolve the matter. The Ambassador has since
raised this issue with Technical Secretary Eduardo Zablah, President
Saca's chief of staff and principal economic advisor.
5. Conversations with Vice President de Escobar, Technical
Secretary Eduardo Zablah, Minister of Economy de Gavidia, and other
SIPDIS
GOES officials also focused on El Salvador's potential to become a
regional logistics and transportation hub for the region. The Vice
President mentioned the development of seaport infrastructure and a
road network to complement the country's large, modern airport.
Minister de Gavidia, meanwhile, noted efforts to simplify government
regulation in an effort to lower transportation costs.
Bio-fuels
--------------
6. During his visit, A/S Sullivan highlighted USG interest in El
Salvador's fledgling bio-fuels industry in conversations with Vice
President de Escobar, Minister of Agriculture Salaverria, and
Minister of Economy de Gavidia. He also visited the La Cabana sugar
mill and refinery, one of two bio-fuel plants in El Salvador, but
the only one using Salvadoran inputs. The plant is currently
producing about 70,000 liters of ethanol daily, and plans are to
increase production to about 140,000 liters. The other bio-fuel
facility de-hydrates Brazilian ethanol and exported $134 million to
the United States in 2006.
7. A/S Sullivan congratulated the Salvadorans for their initiative
in developing bio-fuels, both to take advantage of CAFTA-DR trading
SAN SALVAD 00000476 002.2 OF 002
opportunities and for domestic consumption. He underscored that
diversifying types of fuels was critical for both U.S. and
Salvadoran energy security. Minister de Gavidia noted that the
country imported $715 million in petroleum products in 2006, making
bio-fuel development an important priority. Vice President de
Escobar mentioned that the government is finalizing legislation on
bio-fuels that would spur its use and provide incentives to increase
production.
Total Economic Engagement
--------------
8. Throughout the visit, A/S Sullivan highlighted the importance of
total economic engagement--that is, an effort to integrate USG
trade, investment, and foreign assistance. With local businessmen
in the northern farming town of Nueva Concepcion and a visit to a
nearby papaya farm, A/S Sullivan and MCC Deputy CEO Bent emphasized
the opportunities for economic growth created by CAFTA-DR, the
assistance already provided by USAID to take advantage of those
opportunities, and the assistance that will be provided by MCC over
the next several years.
9. A papaya farm the delegation visited epitomized the total
economic engagement approach. In early 2006, farm owner Manuel
Quijada planted 2,700 papaya trees on 5 acres of land previously
used for rice cultivation. USAID technical assistance focused on
teaching Quijada how to grow papayas, including the installation of
a drip irrigation system. IDB assistance has focused on marketing
and sales. Currently, the papayas are sold locally, competing with
Guatemalan imports. To date he has harvested about 30,000 pounds of
fruit, earning about $4,000, nearly three times more than he would
earn growing rice. With additional technical assistance on
post-harvest processing, Quijada is positioned to take advantage of
the road network to be built by the MCC to expand his market, and in
association with other papaya growers, eventually export under
CAFTA-DR.
10. In a meeting with Vice President de Escobar and Minister of
Economy de Gavidia, A/S Sullivan raised the Alliance for Growth and
Progress (AGP) proposal currently under discussion in Washington.
The Vice President and Minister of Economy welcomed the idea of
expanding upon and deepening the connections between the countries
with free trade agreements and other like-minded countries in the
hemisphere. Minister de Gavidia mentioned a recent APEC meeting in
Colombia where similar issues were discussed, and both GOES
officials said they would be interested to hear more about AGP. A/S
Sullivan also raised with the Vice President and Minister de Gavidia
the issue of crime and security and how increases in these troubling
trends could undermine economic growth and poverty reduction
efforts.
Comment
--------------
11. Much attention has been paid (and rightfully so) to the
one-year anniversary of CAFTA-DR implementation in El Salvador.
This visit to El Salvador of two high-ranking State Department and
MCC officials brought added attention to the benefits of free trade
agreements in creating jobs and business opportunities in both
countries. In addition, the visit highlighted the fact that the
U.S. commitment to El Salvador extends beyond trade agreements to
total economic engagement for the benefit of both nations.
Throughout the visit, however, Salvadoran interlocutors noted that
unabated violent crime remains a significant obstacle to taking
advantage of these opportunities for growth. End comment.
12. A/S Sullivan cleared this message.
Glazer
SIPDIS
STATE PASS USAID/LAC
STATE ALSO PASS USTR
USDOC FOR 4332/ITA/MAC/WH/MSIEGELMAN
3134/ITA/USFCS/OIO/WH/PKESHISHIAN/BARTHUR
SIPDIS
E.O. 12958: N/A
TAGS: ECON ETRD EINV EAGR EAID ES
SUBJECT: A/S Sullivan and MCC Bent Visit on CAFTA Anniversary
Summary
--------------
1. Assistant Secretary of State for EEB Daniel Sullivan and
Millennium Challenge Corporation Deputy CEO Rodney Bent visited El
Salvador February 28 and March 1 to commemorate the one-year
anniversary of CAFTA-DR's entry into force. In meetings with GOES
officials, the private sector, and the media, both officials
highlighted the role of CAFTA-DR in stimulating economic growth as
part of a broader agenda of total economic engagement. A/S Sullivan
and Ambassador Glazer discussed the GOES' refusal to allow U.S.
table eggs into El Salvador with Vice President Ana Vilma de Escobar
and other senior GOES officials. Other meetings brought attention
to domestic bio-fuel production, El Salvador's potential as a
regional transportation and logistics hub, and violent crime as a
deterrent to economic growth. End summary.
CAFTA-DR at One Year
--------------
2. Ambassador Glazer and A/S Sullivan joined President Saca and
other GOES officials at a formal ceremony marking CAFTA-DR's one
year anniversary on March 1. In a speech extensively covered by
national media, A/S Sullivan congratulated the Salvadorans for their
remarkable progress since 1992 in reducing poverty and rebuilding a
war-torn society. He recognized the role of the GOES in creating
economic opportunity for its people through an aggressive reform
agenda and taking a leading role in CAFTA-DR implementation.
Highlighting U.S. - Salvadoran bilateral cooperation, he described
CAFTA-DR as one part of our total economic engagement with El
Salvador, which also includes programs run by the MCC, USAID, OPIC,
TDA, and other USG agencies (see www.state.gov/e/eeb/ for the full
text of the speech). President Saca reinforced many of these themes
and clearly stated his objective to ensure that economic growth has
a direct role in alleviating poverty.
3. A/S Sullivan visited Arrocera San Francisco, a Salvadoran food
processor and distributor that has taken advantage of CAFTA-DR
opportunities to expand its product line for export to the United
States and add 200 new employees in the last year. The firm exports
its own products and serves as a distributor for a number of smaller
food processors that otherwise would find it difficult to reach U.S.
markets. Arrocera San Francisco has already established a
distribution center in the United States and plans to establish five
more, creating more jobs in the United States. In press events and
meetings with GOES and other officials, A/S Sullivan drew attention
to the company as an example of how CAFTA-DR benefits both nations
by directly employing more Salvadorans and more Americans as a
result of increased trade.
4. Beginning with his first event with Minister of Agriculture
Mario Salaverria, A/S Sullivan pressed the GOES to allow U.S. table
eggs and other poultry products into El Salvador. He also raised
the same USG concerns with Vice President Ana Vilma de Escobar and
Minister of Economy Yolanda de Gavidia the following day. He
stressed that such trade irritants must be resolved so our two
governments could focus attention on broader areas of interest and
cooperation. Still claiming that it was a technical issue,
Salaverria said he was willing to meet again with USDA and USTR
officials to try to resolve the matter. The Ambassador has since
raised this issue with Technical Secretary Eduardo Zablah, President
Saca's chief of staff and principal economic advisor.
5. Conversations with Vice President de Escobar, Technical
Secretary Eduardo Zablah, Minister of Economy de Gavidia, and other
SIPDIS
GOES officials also focused on El Salvador's potential to become a
regional logistics and transportation hub for the region. The Vice
President mentioned the development of seaport infrastructure and a
road network to complement the country's large, modern airport.
Minister de Gavidia, meanwhile, noted efforts to simplify government
regulation in an effort to lower transportation costs.
Bio-fuels
--------------
6. During his visit, A/S Sullivan highlighted USG interest in El
Salvador's fledgling bio-fuels industry in conversations with Vice
President de Escobar, Minister of Agriculture Salaverria, and
Minister of Economy de Gavidia. He also visited the La Cabana sugar
mill and refinery, one of two bio-fuel plants in El Salvador, but
the only one using Salvadoran inputs. The plant is currently
producing about 70,000 liters of ethanol daily, and plans are to
increase production to about 140,000 liters. The other bio-fuel
facility de-hydrates Brazilian ethanol and exported $134 million to
the United States in 2006.
7. A/S Sullivan congratulated the Salvadorans for their initiative
in developing bio-fuels, both to take advantage of CAFTA-DR trading
SAN SALVAD 00000476 002.2 OF 002
opportunities and for domestic consumption. He underscored that
diversifying types of fuels was critical for both U.S. and
Salvadoran energy security. Minister de Gavidia noted that the
country imported $715 million in petroleum products in 2006, making
bio-fuel development an important priority. Vice President de
Escobar mentioned that the government is finalizing legislation on
bio-fuels that would spur its use and provide incentives to increase
production.
Total Economic Engagement
--------------
8. Throughout the visit, A/S Sullivan highlighted the importance of
total economic engagement--that is, an effort to integrate USG
trade, investment, and foreign assistance. With local businessmen
in the northern farming town of Nueva Concepcion and a visit to a
nearby papaya farm, A/S Sullivan and MCC Deputy CEO Bent emphasized
the opportunities for economic growth created by CAFTA-DR, the
assistance already provided by USAID to take advantage of those
opportunities, and the assistance that will be provided by MCC over
the next several years.
9. A papaya farm the delegation visited epitomized the total
economic engagement approach. In early 2006, farm owner Manuel
Quijada planted 2,700 papaya trees on 5 acres of land previously
used for rice cultivation. USAID technical assistance focused on
teaching Quijada how to grow papayas, including the installation of
a drip irrigation system. IDB assistance has focused on marketing
and sales. Currently, the papayas are sold locally, competing with
Guatemalan imports. To date he has harvested about 30,000 pounds of
fruit, earning about $4,000, nearly three times more than he would
earn growing rice. With additional technical assistance on
post-harvest processing, Quijada is positioned to take advantage of
the road network to be built by the MCC to expand his market, and in
association with other papaya growers, eventually export under
CAFTA-DR.
10. In a meeting with Vice President de Escobar and Minister of
Economy de Gavidia, A/S Sullivan raised the Alliance for Growth and
Progress (AGP) proposal currently under discussion in Washington.
The Vice President and Minister of Economy welcomed the idea of
expanding upon and deepening the connections between the countries
with free trade agreements and other like-minded countries in the
hemisphere. Minister de Gavidia mentioned a recent APEC meeting in
Colombia where similar issues were discussed, and both GOES
officials said they would be interested to hear more about AGP. A/S
Sullivan also raised with the Vice President and Minister de Gavidia
the issue of crime and security and how increases in these troubling
trends could undermine economic growth and poverty reduction
efforts.
Comment
--------------
11. Much attention has been paid (and rightfully so) to the
one-year anniversary of CAFTA-DR implementation in El Salvador.
This visit to El Salvador of two high-ranking State Department and
MCC officials brought added attention to the benefits of free trade
agreements in creating jobs and business opportunities in both
countries. In addition, the visit highlighted the fact that the
U.S. commitment to El Salvador extends beyond trade agreements to
total economic engagement for the benefit of both nations.
Throughout the visit, however, Salvadoran interlocutors noted that
unabated violent crime remains a significant obstacle to taking
advantage of these opportunities for growth. End comment.
12. A/S Sullivan cleared this message.
Glazer