US embassy cable - 03GUATEMALA403


Identifier: 03GUATEMALA403
Wikileaks: View 03GUATEMALA403 at
Origin: Embassy Guatemala
Created: 2003-02-13 23:30:00
Classification: CONFIDENTIAL
Redacted: This cable was not redacted by Wikileaks.
This record is a partial extract of the original cable. The full text of the original cable is not available.

E.O. 12958: DECL: 02/10/2013 
Classified By: PolCouns David Lindwall for reason 1.5 (d). 
1. (C) Summary:  During a two-day visit to Guatemala, WHA/CEN 
Director Paul Trivelli discussed counter-narcotics 
certification and free trade with Vice President Reyes and 
the Acting Foreign Minister; CAFTA and fiscal responsibility 
with the economic cabinet and business leaders; and support 
for human rights programs with human rights leaders.  He 
visited the site of an exhumation from the internal conflict 
to show support for the work of threatened human rights 
activists seeking to heal wounds left over from the  war. 
GOG and private sector interlocutors were uniformly excited 
about the prospects of a free trade agreement with the US, 
and recognize that many non-trade related issues must be 
addressed in order for CAFTA to be approved.  Human rights 
leaders are refining their proposals for the creation of an 
international commission to investigate the operations of 
clandestine groups and welcomed our support.  Guatemalans 
view 2003 as a pivotal year for the future of the country, as 
elections and CAFTA negotiations will determine if Guatemala 
will embrace the 21st century at the same pace as its 
neighbors. End summary. 
Vice President bullish on CAFTA 
2. (C) The Ambassador, visiting WHA/CEN Director Trivelli and 
visiting AID Assistant Administrator Franco met with Vice 
President Franciso Reyes on February 6 to discuss the full 
range of bilateral issues.  The meeting was frank and 
cordial.  AID/LAC Franco said the USG was pleased to see 
Guatemala field a capable team of negotiators to the first 
CAFTA meeting in Costa Rica, and said the U.S. views a free 
trade agreement as the best hope for reducing poverty in the 
region.  Franco noted that CAFTA would bring with it a deeper 
relationship between our governments and societies, and said 
that Congress would have to consider a range of non-trade 
issues in the bilateral relationship as "background" to 
ultimately approving CAFTA.  The Ambassador, Trivelli and 
Franco all noted that corruption, counter-narcotics 
cooperation, effective investigation of Amcit murders, and 
human and labor rights performance were matters that would be 
raised by critics of globalization who will question why the 
United States is seeking a special relationship with 
Guatemala at this time.  Vice President Reyes acknowledged 
that these issues are ultimately inseparable from a free 
trade relationship, calling them "links in the same chain," 
and said the GOG has the political will to address them.  He 
said that President Portillo has asked him to coordinate the 
efforts of the different GOG entities that were participating 
in the trade talks. 
3.  (C) Vice President Reyes said that the GOG would like to 
have CAFTA ready to sign by September, 2003 (note: two months 
before national elections. end note).  He believes the 
agreement with Chile could serve as a point of departure, but 
said that Central America's unique situation would require 
modifications.  He said that many in the private sector 
oppose a free trade agreement because they believe it will 
threaten their long-held monopolies.  AID/LAC Franco 
responded that it is important that the government address 
these concerns by consulting the private sector and civil 
society throughout the negotiating process. 
4. (C) WHA/CEN Trivelli told the Vice President that it is 
critical that Guatemala's counter-narcotics cooperation 
improve rapidly.  He also observed that continuing 
decertification status for Guatemala would seriously 
complicate finalization of a free trade agreement.  Trivelli 
noted that there will be a formal review of Guatemala's 
counter-narcotics performance in September, and it is crucial 
that major advances take place before that.  Vice President 
Reyes said that bi-weekly consultations had been set up 
between the GOG and the Embassy to address our specific 
concerns, and that the GOG would like to achieve 
re-certification as soon as possible. 
5. (C) Trivelli also told the Vice President that the USG 
applauded the Human Rights Ombudsman's recent call for the 
creation of an international commission to investigate the 
illegal activities of "clandestine groups," and that we hope 
the GOG will support the proposal.  Vice President Reyes said 
that President Portillo had already expressed his support for 
this endeavor, but that he (Vice President Reyes) was 
withholding judgment until he knew more about its goals. 
6. (C) The Ambassador raised our request for GOG support for 
Secretary Powell's February 5 UNSC statement on Iraq 
(reported septel), and asked the Vice President to urge the 
Ministers of Agriculture and Environment to resolve quickly a 
dispute that has put a temporary halt to a joint 
U.S.-Mexico-Guatemalan program to eradicate the Mediterranean 
fruit fly.  The Vice President promised to get in touch with 
the Ministers of Agriculture and Environment that day to see 
how this problem, which could have serious consequences for 
the eradication program in Guatemala, could be resolved 
Foreign Ministry makes CAFTA priority 
7. (C) The Ambassador and WHA/CEN Director Trivelli met with 
Acting Foreign Minister Rony Abiu at the MFA on February 6 to 
discuss CAFTA, border talks with Belize and an Article 98 
agreement.  Vice Minister Abiu, who had only been appointed 
two weeks previously and who handles the MFA's economic and 
trade portfolios, said that the MFA has made securing a free 
trade agreement with the U.S. its "highest priority."  He 
said that the Ministry of Economy had the lead in the 
negotiations, but that the MFA had responsibility for matters 
involving regional integration.  In that vein, he said that 
the MFA was tasked with managing the parallel talks with the 
other Central American partners to establish a customs union 
as a foundation for CAFTA.  The Ambassador and WHA/CEN 
Trivelli noted that it would be crucial to address 
counter-narcotics cooperation, threats against human rights 
workers and the unresolved murders of Amcits before the CAFTA 
process can be finalized.  Abiu acknowledged that "free trade 
agreements have important underlying political components," 
and said the GOG is determined to address those issues. 
8. (C) Trivelli raised USG disappointment at the failure of 
Guatemala to embrace the recommendations of the facilitators 
regarding the border demarcation with Belize, noting that it 
is crucial at this juncture that both sides agree to 
confidence and security building measures (CSBM's) that will 
reduce border tensions.  Abiu said the GOG also placed a high 
value on extending the CSBM's, and said the GOG was hopeful 
that there would be an agreement with Belize which would 
allow Foreign Minister Gutierrez to sign a CSBM's agreement 
with Belize on February 8. 
9. (C) Trivelli closed the meeting by noting that the USG was 
hopeful that Guatemala would sign an agreement with us 
extending to U.S. military personnel in Guatemala protections 
under Article 98 of the Treaty of Rome.  He noted that U.S. 
military assistance to countries that had not signed these 
agreements would be limited by law, making it difficult for 
the U.S. to continue carrying out humanitarian exercises in 
those countries that had not signed Article 98 agreements. 
The Embassy sent a diplomatic note to the MFA in 2002 
proposing the signing of an agreement, but had not received a 
response.  Abiu said he was unfamiliar with the matter, but 
promised to look into it and get back to us soonest. 
Economic Cabinet:  CAFTA and fiscal discipline 
--------------------------------------------- - 
10. (C) The Ambassador and WHA/CEN Trivelli met with Minister 
of Finance Eduardo Weymann, Minister of Economy Patricia 
Ramirez and chief GOG CAFTA negotiator Salomon Cohen on 
February 7.  Cohen, just returned from the first CAFTA 
negotiating session in San Jose, said that the first round of 
free trade talks had gone well, and that all sides were 
energized by the possibilities.  He said that the Chilean 
agreement was a good starting point, but noted that Guatemala 
would require "special attention" to issues not covered in 
the Chilean agreement, including sugar, poultry and textiles. 
 On textiles, Cohen said that Guatemala is interested in 
talking about "cotton-forward," a concept he said USG 
negotiators had neither accepted nor discounted.  Cohen and 
Ramirez both said Guatemala was concerned that the 
negotiations would "start at zero," (applied MFN tariffs) not 
taking into consideration that Guatemala already had 
significant benefits under GSP and CBI.  They acknowledged 
that market access talks with Chile had started with applied 
tariff rates, but feared that Guatemala producers would find 
it unacceptable that Guatemala would have to negotiate from a 
base which did not take into consideration tariff concessions 
they already have.  Negotiator Cohen said that for CAFTA to 
work, it would be critical for the USG to provide significant 
infrastructure assistance to Guatemala (he mentioned 
irrigation specifically), noting that otherwise Guatemala was 
unlikely to compete well in any free trade arrangement. 
Trivelli noted that it is critical that the GOG bring the 
private sector and civil society along by consulting 
regularly with them, as their support will be crucial if 
CAFTA is to work. 
11. (C) Finance Minister Weymann, overwhelmed by the ongoing 
teachers' protest demanding a 60% salary increase, said that 
the GOG must impose fiscal discipline.  He said the IMF 
agreement is the only lever he has to compel the cabinet to 
exercise some discipline in spending in an election year.  He 
acknowledged USG concerns over Guatemala's low rate of 
taxation (just over 10 percent), and said that taxes will 
have to be raised.  He said that even so he does not know how 
the GOG will pay the 100 Quetzales (roughly $13) monthly 
increase being offered teachers, and he fears it could create 
unmanageable expectations from the rest of the public sector. 
 Weymann said that the government is floating eurobonds for 
the purpose of financing a major reduction in the military, 
providing counterpart funds for foreign aid projects, 
providing support for victims of the internal conflict and 
former civil patrol members, and armor-plating the Quetzal in 
an election year.  The Ambassador expressed the international 
community's concern that the proposed uses of the bond's 
proceeds had not been clearly explained.  Weymann countered 
that he and Central Bank President Sosa has stated clearly to 
the press how the funds would be used.  He then mentioned 
some of the changes that had been made to the original plan. 
(Comment: In fact the FRG is trying to float the Eurobonds 
for some projects of dubious economic benefit but with 
potential political payoffs in an election year.) 
Business leaders optimistic despite confrontation with 
--------------------------------------------- --------- 
12. (C) Following lunch with the Economic Cabinet, WHA/CEN 
Trivelli met with representatives of Guatemala's private 
sector -- Peter Lamport, Richard Aitkenhead and William 
Stixrud, former Finance Ministers and/or Ambassadors to 
Washington during the PAN administration of Alvaro Arzu.  All 
agreed that the private sector strongly supports the 
conclusion of a free trade agreement with the U.S.  While 
they acknowledged that there was some concern over the lack 
of dialogue with the GOG on CAFTA, they believe that 
ultimately they will be consulted by Guatemala's new 
negotiating team.  Lamport commented that some members of the 
private sector are concerned about the fate of poultry and 
sugar in the negotiations, and are not convinced that the 
GOG, currently confronted with the private sector, will look 
after their interests in these areas. 
13.  (C) The business leaders said that they would welcome 
dialogue with the GOG, but said the Portillo Administration 
had consistently shunned contact with them.  They said that 
former Minister of Economy Arturo Montenegro lost his job for 
trying to establish a dialogue with the private sector.  The 
private sector leaders acknowledged the need for increased 
tax collection, but said the government had reneged on its 
promises made regarding the fiscal pact.  They do not believe 
Portillo can be trusted to stick to any agreement they reach, 
and have placed their hopes in the election of a new 
government this fall.  The businessmen said that if the FRG 
is re-elected this fall, it would be calamitous for 
Guatemala, and investment would disappear. 
14.  (U) Guatemala's organized private sector views El 
Salvador as a model for just about everything -- pragmatic 
government, strong political parties (read ARENA), and a 
private sector that is deeply involved in social development. 
 The private sector leaders said that they are in constant 
contact with their Salvadoran counterparts for the purpose of 
adapting their successes to Guatemala's situation.  Lamport 
nevertheless agreed with Trivelli that the Salvadoran example 
was not perfect, as ARENA lacked a credible counterweight on 
the moderate left. 
Human Rights groups welcome USG support for commission 
against clandestine groups 
--------------------------------------------- --------- 
15. (SBU) WHA/CEN Director Trivelli met with human rights 
leaders Helen Mack, Mario Polanco, Claudia Samayoa, and 
Orlando Blanco at the Myrna Mack Foundation on February 6. 
After a brief press conference, Trivelli thanked the 
activists for the meeting and reiterated our strong support 
for advancing human rights in Guatemala and our specific 
interest in the latest initiative to investigate the illegal 
activities of clandestine groups.  Mack thanked him for the 
overwhelming USG support and advice.  Polanco cautioned that 
the human rights groups still needed more guidance to make 
the commission effective.  Trivelli mentioned that the USG is 
looking into ways to help technically support as well as fund 
the international commission which will look into the 
operations of clandestine groups and that we hope other 
donors follow suit.  Trivelli also recommended that the human 
rights groups finalize the details of their proposal before 
entering into negotiations with the GOG.  Mack agreed and 
said they hoped to formulate a proposal that was credible and 
16. (SBU) After discussion of the clandestine groups 
proposal, Mack expressed concern over the new law regulating 
NGO's which is currently being discussed in Congress.  The 
human rights groups worry that this law will allow the 
government to control the activities of NGO's at a time when 
civil society has been in the forefront of opposition to the 
Portillo Administration.  Trivelli recognized their concern 
and said that we would review the law closely. 
17. (SBU) In response to a question about the status of 
threats against human rights workers, Samayoa responded that 
the threats have been cyclical.  Some months there are 
numerous new threats and others are relatively quiet. 
Overall, she said threats were continuing and were a grave 
concern to human rights activists. Trivelli and the DCM 
responded that the USG views the protection of human rights 
workers as one of our highest priorities in Guatemala and 
that they should never hesitate to solicit our support in 
specific cases of threats. 
Healing scars from the internal conflict in San Jose Poaquil 
--------------------------------------------- ------- 
18. (U) On February 7, WHA/CEN Director Trivelli, PolCouns, 
HROff, and ConOff drove out to San Jose Poaquil, in the 
remote mountainous region of Chimaltenango Department where 
the Army and the guerrillas had turned the sparsely inhabited 
river valleys into a no-mans land during the early 1980's. On 
the banks of the Motagua River we observed an exhumation of 
war victims' remains performed by the Guatemalan Forensic 
Anthropology Foundation (FAFG).  The remains were those of a 
family, including small children, who had been murdered by 
"armed, uniformed men" as the family tried to protect their 
seed corn from pillaging.  The only survivors were small 
children at the time, and they did not know if the 
perpetrators had been military, PACs or guerrillas, all of 
whom operated in the area.  FAFG director Fredy Peccerelli 
described the process by which the sites are identified and 
the legal process the FAFG must follow so that all of the 
information collected during the exhumation can be preserved 
for future legal cases.  Family members of the victims were 
also present to observe the exhumation of their loved ones. 
They were effusive in their thanks to the FAFG and the USG, 
and said they had been waiting over 20 years to give their 
slain relatives a proper burial. 
19. (U) Trivelli thanked the FAFG for all of their brave work 
and asked Peccerelli what his personal motivation was to 
soldier on with the exhumations (this was the FAFG's site 
number 252) despite the multiple death threats and 
intimidations he encounters.  Peccerelli responded that while 
in the long term the information the FAFG collects may be 
used to put war criminals behind bars, he said his motivation 
is the thousands of family members they have helped heal.  He 
said, "the wounds left by the internal conflict run deep and 
the people of Guatemala have suffered.  If I can help my 
country heal, one exhumation at a time, then I feel like I am 
helping to make a difference." 
20. (C) WHA/CEN Trivelli's visit came at a time of growing 
internal political confrontation, revolving around the 
upcoming election, and increasing hope of economic 
opportunities generated by a free trade agreement with the 
U.S.  All sides view 2003 as a pivotal year for Guatemala, 
and acknowledged that Guatemala will have to successfully 
address long festering problems of human and labor rights, 
counter-narcotics cooperation, the murders of Amcits, 
official corruption and political confrontation if it is to 
join its Central American neighbors in reaching a new trade 
relationship with the United States.  Guatemalans are 
optimistic that they meet this challenge. 
21. (U) This cable was cleared by WHA/CEN Director Paul 

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