US embassy cable - 03TEGUCIGALPA2355

C O N F I D E N T I A L SECTION 01 OF 02 TEGUCIGALPA 002355 
 
SIPDIS 
 
STATE FOR WHA/CEN, WHA/EPSC AND EB 
PASS TO USTR FOR ANDREA GASH DURKIN 
 
E.O. 12958: DECL: 10/03/2013 
TAGS: ETRD, EAGR, ECON, ELAB, PREL, HO, WTO 
SUBJECT: HONDURAN VIEWS OF WTO CANCUN MINISTERIAL 
 
REF: A. (A) STATE 268181 
 
     B. (B) STATE 270764 
     C. (C) STATE 257469 
 
Classified By: Ambassador L. Palmer for reasons 1.5(B) and (D) 
 
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Summary 
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1. (C) In the wake of the breakdown of the Doha agenda 
negotiations at the Cancun WTO ministerial, Honduran 
officials seemed most interested in the impact on the 
agricultural talks in the Central America Free Trade 
Agreement (CAFTA) negotiations.  The GOH will now push 
strongly in the CAFTA talks for special safeguards or 
continued tariff protection for products that receive U.S. 
export subsidies and/or domestic supports.  GOH trade 
officials also are very keen to understand how Brazil's 
leadership role in the G-20 plus group (called G-21 or G-23 
here) will affect USG strategy in the Free Trade Agreement of 
the Americas (FTAA).  Within the Doha (DDA) negotiations, 
Honduras is seeking a certain form of special and 
differentiated treatment in the agricultural tariff 
reductions.  Honduras steered clear of being drawn into the 
G-21 during Cancun.  To the extent that USG negotiators can 
be responsive to its approach, Honduras may become an ally 
for constructive and ambitious DDA agricultural negotiations. 
 End Summary. 
 
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Cancun May Make the CAFTA Agriculture Talks Easier 
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2. (C) Honduran Trade Policy Director and chief CAFTA 
negotiator Melvyn Redondo went straight to the Managua round 
of the CAFTA negotiations directly from Cancun with one 
question for the USDEL: How is the USG going to respond to 
Central American concerns about U.S. agricultural subsidies 
and domestic supports in the CAFTA "now that it is clear that 
there will be no reductions agreed to in the WTO?" 
Negotiatiions over a limited agricultural safeguard are now 
seen as a potential answer to that question.  Comment:  Thus, 
from one point of view, it appears that the Cancun 
developments may make it easier to reach agreement on 
agriculture in the Central American talks.  End Comment. 
 
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But What Does It Mean for FTAA? 
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3. (SBU) EconOffs met with Minister of Industry and Trade 
Norman Garcia and Redondo on September 30.  They delivered 
Ambassador Zoellick's Financial Times op ed piece on Cancun 
and the CAFTA Labor Track II demarche as requested in refs b 
and c.  Garcia asked about the USG's strategy for moving the 
FTAA negotiations along.  EconCouns reiterated the USG's 
commitment to pursuing an FTAA on the established timeframe. 
 
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Honduras' Objectives in the WTO 
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4. (SBU) Going into Cancun, the GOH's key objective for the 
Ministerial was to fight for special and differentiated 
treatment, vis-a-vis agricultural tariff reduction, for 
developing countries like Honduras that already have 
relatively low bound and applied tariffs.  In a September 5 
meeting with EconCouns, Redondo said that the number of 
developing countries with similar tariff structures was very 
small and mentioned Sri Lanka as an example.  He added that 
Honduras would not be required to cut industrial tariffs 
because of its income level.  After Cancun, Garcia and 
Redondo seemed a bit bemused by their Central American 
colleagues' involvement in the G-21 and a bit glum that their 
"good behavior" hadn't been recognized (this was a dig at the 
fact that USTR Zoellick is not visiting Honduras in his early 
October trip to the region). 
 
5. (C) Comment: The GOH's trade team is very thin, and CAFTA 
has been the focal point of its trade policy this year.  In 
any case, Honduran trade policy in the WTO is typically very 
narrowly focused.  In Doha, for example, Honduras' prime 
focus was to maintain and expand the country's exception for 
free trade zones under Article 7 of the Subsidies Agreement. 
In the DDA negotiations themselves, the key objective has now 
shifted to protection from further tariff reduction on 
approximately 20 categories of "strategic" and "sensitive" 
agricultural products, in recognition of Honduras' relatively 
modest tariff levels compared to other developing countries. 
If  the USG is able to be responsive to this approach, 
Honduras may become an ally for constructive and ambitious 
DDA agricultural negotiations.  End Comment. 
Palmer