US embassy cable - 04TEGUCIGALPA2645

UNCLAS TEGUCIGALPA 002645 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR WHA/CEN, WHA/EPSC, EB AND DRL/IL 
STATE PASS USTR FOR AMALITO 
STATE PASS AID FOR LAC/CAM 
DOL FOR ILAB 
GUATEMALA FOR AGATT SHUETE 
TREASURY FOR DDOUGLASS 
 
E.O. 12958: N/A 
TAGS: ETRD, ECON, PGOV, EAGR, ELAB, HO 
SUBJECT: GOH Trade Officials Worried about DR Exclusion from 
CAFTA 
 
REF: Tegucigalpa 2483 
 
1. (SBU) Summary:  GOH trade officials are increasingly 
concerned that the exclusion of the Dominican Republic from 
CAFTA would require Honduras to re-sign CAFTA and re-start 
its process of Congressional approval and ratification. 
They believe that there is no legal mechanism under Honduran 
law by which Honduras could approve and ratify the current 
(August 5) version of CAFTA if the Dominican Republic is 
excluded.  Instead, the GOH would have to sign a new 
agreement and present the new agreement to Congress for 
approval, which would delay ratification until early 2005 at 
best.  End Summary. 
 
2. (SBU) In the past two weeks, Minister of Trade and 
Industry Norman Garcia and Director of Trade Policy (and 
Lead Negotiator for CAFTA) Melvin Redondo have expressed 
growing concern that the exclusion of the Dominican Republic 
from CAFTA will make it impossible for Honduras to approve 
and ratify CAFTA by the end of this year as planned.  Since 
an approval decree for the August 5 version of CAFTA (which 
the includes the Dominican Republic) has already been 
presented to Congress (reftel), exclusion of the Dominican 
Republic at this stage would require, according to Redondo, 
signing a new agreement and re-starting the process of 
Congressional approval using this new agreement.  Minister 
Garcia, though admitting that he has not analyzed the legal 
issues himself, says that his legal advisors are convinced 
that Congress could not approve the August 5 version of 
CAFTA if the Dominican Republic is not included. 
 
3. (SBU) According to Redondo, the question of the Dominican 
Republic's exclusion "has actually become more difficult 
than CAFTA itself," and he has also expressed concern that 
opponents of the agreement could use the exclusion of the 
Dominican Republic "as propaganda against CAFTA".  However, 
even under the worst-case scenario of a lost opportunity for 
Congressional approval in 2004 and a re-start in 2005, 
Redondo and Garcia seem confident that CAFTA will still have 
enough Congressional support to pass. 
 
------------------------------- 
Comment: Process, not Substance 
------------------------------- 
 
4. (SBU) Comment: It is worth noting that Garcia and Redondo 
seem troubled only by the logistical headaches that removal 
of the Dominican Republic would cause; they are not 
bemoaning the trade benefits foregone or the negative impact 
on regional integration.  In addition, neither Garcia nor 
Redondo has at any point blamed the U.S. for coming down too 
hard on the Dominican Republic; they seem to understand the 
political necessity of the U.S. position.  Still, with the 
process of ratification well under way and proceeding 
according to plan, it is understandable that they would 
bitterly regret having to completely lose current momentum 
and start again fresh next year.  End comment. 
 
Palmer