Identifier | Created | Classification | Origin |
---|---|---|---|
09SANSALVADOR604 | 2009-06-30 22:00:00 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy San Salvador |
VZCZCXRO2898 PP RUEHAO RUEHCD RUEHGA RUEHGD RUEHGR RUEHHA RUEHHO RUEHMC RUEHMT RUEHNG RUEHNL RUEHQU RUEHRD RUEHRG RUEHRS RUEHTM RUEHVC DE RUEHSN #0604 1812200 ZNR UUUUU ZZH P 302200Z JUN 09 FM AMEMBASSY SAN SALVADOR TO RUEHC/SECSTATE WASHDC PRIORITY 1301 INFO RUEHWH/WESTERN HEMISPHERIC AFFAIRS DIPL POSTS RUCPDOC/USDOC WASHDC RUMIAAA/USCINCSO MIAMI FL RUCNDT/USMISSION USUN NEW YORK 0120 RHEHNSC/NSC WASHINGTON DC |
UNCLAS SAN SALVADOR 000604 |
1. (SBU) SUMMARY. The Government of El Salvador (GOES) instituted a "commercial embargo" on Honduras and closed the border to trade the evening of June 29. The border remains open to non-commercial traffic. The initial embargo is expected to last 48 hours, but could be extended if the situation in Honduras does not "improve." The private sector in El Salvador has come out strongly against the measures, arguing that private companies in El Salvador should not be penalized for the actions of government institutions in Honduras. Should the embargo continue beyond 48 hours, it is likely to adversely affect the economy of El Salvador. END SUMMARY. 2. (SBU) Amcham Executive Director Carmen Aida Munoz (protect) alerted Emboffs to the embargo the evening of June 29. In an official declaration signed in Managua, the CA-4 Presidents (Costa Rica, El Salvador, Guatemala, and Nicaragua) agreed to suspend commerce with Honduras for 48 hours as "an initial measure." 3. (SBU) Munoz expressed concern on behalf of Amcham member companies, many of whom bring in raw materials and export via Puerto Cortez in Honduras. Munoz said that Hanes and Fruit of the Loom were the companies expected to be hit the hardest and, if the embargo lasted, might have to close their textile operations temporarily. Munoz also identified La Constancia (owned by SABMiller) and Kimberly Clark as member firms directly affected by the border closing. Amcham had been unable to reach any officials from the Ministry of Economy or the Technical Secretary (Chief of Staff) to the President to discuss the embargo. 4. (SBU) On June 30, Munoz told A/Econcouns that Amcham had spoken with representatives from Maersk, who had confirmed the Salvadoran border closing. Maersk had reported that Honduran officials had not taken any official actions on their side of the border, but traffic had been very slow since Sunday and there were many obstacles on Honduran roads. 5. (SBU) Munoz also stated that Salvadoran Chamber of Commerce President Jorge Daboub had spoken with Minister of Economy Hector Dada on June 29. Dada reportedly advised Daboub that the business sector should "get used to these measures" if the situation in Honduras did not improve. 6. (U) An official of the Directorate of Migration informed Conoffs on June 30 that the land borders remained open to non-commercial traffic. The official advised, however, that the borders were being closed at night due to the curfew in Honduras. 7. (U) Under the auspices of the Salvadoran Private Enterprise Association (ANEP), the heads of various chambers and private sector associations, including Amcham and the Salvadoran Chamber of Commerce, spoke out against the embargo in a June 30 press conference. The private sector argued that they should not be the ones penalized for the actions of government institutions in Honduras and urged diplomatic rather than economic pressure. Daboub stated that the border closings represented a loss of $2.5 million per day and put 10,000 jobs at risk. 8. (SBU) COMMENT: Should the GOES extend the embargo beyond 48 hours, we expect the economy of El Salvador to suffer along with the economy of Honduras. Since El Salvador lacks an Atlantic port, Salvadoran firms are heavily dependent on access to the ports in Guatemala and Honduras for their imports and exports. El Salvador also enjoys a trade surplus with Honduras ($52.1 million through April 2009), and so would be the bigger loser on bilateral trade. END COMMENT. Blau |