US embassy cable - 04TEGUCIGALPA2314

UNCLAS TEGUCIGALPA 002314 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR WHA/CEN, WHA/EPSC, AND EB 
STATE PASS USTR 
 
E.O. 12958: N/A 
TAGS: ETRD, ECON, EAGR, PGOV, HO, WTO 
SUBJECT: Honduras' Reaction to July Framework: Cautiously 
Positive 
 
REF: A) State 168991 
 
     B) Tegucigalpa 778 
     C) Tegucigalpa 1567 
     D) Montevideo 1459 
 
1. (U) Summary: GOH trade officials are reasonably satisfied 
with the WTO July Framework, regarding it as an agreement 
that recognizes Honduras' key interests but nonetheless 
defers most difficult decisions for future negotiation. 
Honduras will support the candidacy of Perez de Castillo of 
Uruguay for the position of next WTO Director General.  End 
Summary. 
 
2. (U) Speaking with EconOff on October 12, Director of 
Trade Policy Melvin Redondo spoke favorably of the 
negotiating framework adopted by the WTO General Council on 
August 1 (ref A).  He specifically cited the successful 
efforts of the G-33, of which Honduras is a member, to 
establish recognition in the framework of two key issues. 
First, the framework (in paragraph 42) calls for the 
establishment of a Special Safeguard Mechanism for use by 
developing countries.  Second, the framework (in paragraph 
41) allows developing countries to designate certain 
products as Special Products eligible for more flexible 
treatment, based on criteria including rural development 
needs.  (Note: As reported in reftels B and C, and as 
evidenced by Honduras' strategy in the CAFTA negotiations, 
the securing of special treatment for sensitive products is 
one of Honduras' top priorities in any trade agreement, due 
to the domestic political sensitivities attached to 
agricultural products such as maize, rice, poultry and dairy 
products.  End note.) 
 
3. (U) Redondo tempered his enthusiasm, however, by saying 
that the framework is only a basic guide for future 
negotiations, and that most of the difficult decisions still 
lie ahead.  The July framework, for example, does not 
address one of Honduras' outstanding concerns, that of 
establishing a tariff-reduction formula that will not 
discriminate against countries such as Honduras that already 
have low bound tariff rates.  Still, given the failure of 
talks at Cancun, Redondo views the July framework as a 
positive step. 
 
4. (SBU) Regarding the selection of a successor to WTO 
Director General Supachai, Redondo confirmed that Honduras 
supports the candidacy of Ambassador Carlos Perez de 
Castillo of Uruguay (ref D).  Redondo had heard press 
reports that Brazil was putting forth a rival candidate, but 
did not know the Brazilian candidate's name or anything 
about him.  Redondo said that he believes Perez de Castillo 
has the support of the other Central American countries as 
well, as they have worked with him in the past and are 
comfortable and familiar with him. 
 
Pierce