US embassy cable - 05TEGUCIGALPA364

UNCLAS SECTION 01 OF 03 TEGUCIGALPA 000364 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR WHA/EPSC, WHA/PPC, AND WHA/CEN 
STATE FOR DRL/IL, OES, AND EB/TPP/BTA/EWH 
STATE PASS USTR 
STATE PASS AID FOR LAC/CAM 
DOL FOR ILAB 
 
E.O. 12958: N/A 
TAGS: ETRD, ELAB, PGOV, EAGR, SENV, HO 
SUBJECT: HONDURAN LABOR LEADERS' OPPOSITION TO CAFTA: MORE 
IDEOLOGICAL THAN INFORMED 
 
 
1. (U) Summary: In a February 9 meeting with EmbOffs and 
WHA/PPC Labor Advisor, leaders of Honduras' three major labor 
confederations explained the reasons for their opposition to 
CAFTA.  Their complaints were wide-ranging, including 
insufficient protection for labor rights in the agreement, 
"fines" to be charged against the government but not against 
businesses which violate labor laws, and the loss of 
sovereignty implied by signing an agreement which will be 
"above the Honduran constitution."  They also complained that 
the GOH did not adequately consult with labor leaders while 
the agreement was being negotiated.  However, it was clear 
from the conversation that none of the three union leaders 
had in fact read the labor chapter of CAFTA, and they had 
several major misperceptions as to CAFTA's contents, 
procedures for ratification, and probable impact.  End 
summary. 
 
2. (U) On February 9, LabAtt, EconOff, and visiting WHA/PPC 
Labor Advisor met with the leaders of the three major 
Honduran labor confederations to discuss labor's views of 
CAFTA.  The labor union leaders were Israel Salinas of the 
CUTH (United Confederation of Honduran Workers), Altagracia 
Fuentes of the CTH (Confederation of Honduran Workers), and 
Daniel Duron of the CGT (General Workers Confederation).  The 
CUTH and the CTH are affiliated with the ICFTU (as is the 
AFL/CIO); the CGT is affiliated with the WCL.  Together, 
these three confederations comprise all of the major labor 
unions in Honduras. 
 
--------------------------------------------- ----- 
Labor's Case Against CAFTA: A Long and Varied List 
--------------------------------------------- ----- 
 
3. (U) Salinas of the CUTH began the discussion by saying 
that CAFTA threatens the conditions of workers in Honduras. 
He said that CAFTA does not guarantee the right of workers to 
organize, or if so, it does so only "superficially." 
Regarding the monetary assessments established by the 
dispute-settlement mechanism (referred to by the Hondurans 
throughout the conversation as "fines"), Salinas complained 
that, in case of a violation of Honduran labor law, these 
fines would be levied against the government, but not against 
the company that was actually guilty of the violation.  Duron 
of the CGT echoed this point, saying that a fine imposed on 
the government is essentially a fine against "the people," 
while the company would go unpunished.  (In the past, Salinas 
has also complained that the fines are "economically 
insignificant" and would not deter companies that actively 
impede union organizing.) 
 
4. (U) Salinas also listed many other arguments against CAFTA 
that were not directly related to labor issues.  He expressed 
fears that Honduran farmers would not be able to compete with 
subsidized agricultural products from the United States. 
Regarding environmental issues, Salinas complained that 
nothing in the agreement restricts the use of 
genetically-modified crops or toxic agricultural chemicals, 
and that the agreement contains no guarantees of air or water 
quality.  Finally, Salinas expressed the view that CAFTA 
would represent a loss of Honduran sovereignty, since CAFTA 
would be "above the constitution," would prevent Honduras 
from passing any law which is counter to the terms of the 
agreement, and would establish "external tribunals" with the 
power to assess fines. 
 
5. (U) Duron of the CGT also had a list of arguments against 
the agreement, though again most of his arguments were not 
related to labor in particular.  Referring to a document that 
he said he received at a recent conference in Costa Rica, 
Duron argued that CAFTA will lead to patent protection of 
certain medicines for which generic versions are now 
available, which will lead to an increase in the price of 
these medicines for Hondurans. 
He stated that the Central American economies are too small 
to benefit from an agreement with an economy as large as that 
of the U.S.  He denounced the "failed neo-liberal economic 
model" that CAFTA represents, and said that while NAFTA was 
intended to stem illegal immigration from Mexico to the 
United States, such immigration has in fact continued and 
increased under NAFTA. 
 
6. (SBU) Duron also argued that the benefits of a free market 
economy and increased "openness" have been promised to 
Hondurans before, yet in the end the rich and powerful have 
been the only ones to benefit.  He gave the example of the 
privatization of the cement industry in the 1990s: a 
state-owned industry was rapidly transformed into a duopoly 
in which the two companies (both owned by rich Hondurans) 
work together to keep prices high.  (Comment: On this 
particular point, Duron is absolutely right.  A poor 
investment climate which discourages investment and stifles 
competition, and a weak legal environment which allows unfair 
business practices to go unpunished, do indeed mean that 
market conditions in Honduras are far from perfect.  As a 
result, ordinary Hondurans have not always benefited from 
moves to a more open economy.  However, investor protection 
measures within CAFTA aim to address these very problems. 
End comment.) 
 
------------------------------------------ 
Our laws are good, but not always enforced 
------------------------------------------ 
 
7. (U) Referring to the 2003 ILO study which found that 
Central American countries' labor laws were largely, though 
not entirely, in compliance with international core labor 
standards, WHA/PPC Labor Advisor asked the union leaders for 
their opinion of the quality of Honduras' current labor 
legislation.  All three replied that they are quite satisfied 
with Honduran labor law, with Fuentes calling it the best in 
the region, but stated that violations of those laws take 
place regularly. 
 
--------------------------------------------- --------- 
We were not consulted (but we haven't read it, either) 
--------------------------------------------- --------- 
 
8. (U) WHA/PPC Labor Advisor also asked the labor union 
leaders how much they had participated in the negotiation of 
the agreement.  Salinas and Duron replied that they had 
hardly been involved at all, and that this was another major 
complaint that they had about the process.  (Note: Fuentes 
only assumed the leadership of the CTH in late 2004, when the 
CAFTA negotiations had already concluded, after the temporary 
resolution of a long-running internal CTH dispute.  End 
note.)  Duron stated that during 2003, the GOH only consulted 
with labor leaders to inform them of how the negotiations 
were proceeding, but not to seek their active participation 
or input.  He complained that union leaders were allowed to 
view the draft texts, but not make copies.  He also 
complained that the GOH chose its labor negotiator (Jorge 
Ponce, a former labor lawyer/consultant) without any 
consultation with labor unions. 
 
9. (SBU) The labor leaders also complained that the texts of 
the agreement were being kept a secret, so they couldn't know 
what the agreement actually said.  LabAtt quickly interjected 
to correct this point, clarifying that while the texts were 
not distributed to the public during the negotiations, they 
have been publicly available now for more than a year.  The 
labor leaders copied down with great interest the address for 
the Honduran Trade Ministry's website where the text is 
available, and Fuentes asked if we were certain that the text 
is available in Spanish.  (It is.)  They then expressed 
concern that, at 1800 pages, the agreement was far too long 
to read.  EmbOffs clarified while the entire text is indeed 
very long, most of that length is annexes of tariff tables - 
the labor chapter itself is only 11 pages.  (Comment: It was 
clear that none of the three labor leaders had in fact read 
the labor chapter, or any part of the agreement.  This is a 
telling commentary both on the extent to which Honduras' 
labor leaders have failed to educate themselves about the 
agreement, and on the failure of the Ministry of Trade, 
despite all its efforts to explain the benefits of CAFTA to 
the Honduran people, to reach out to this particular 
audience.  End comment.) 
 
10. (U) Some of questions that the union leaders posed to 
EmbOffs also revealed a lack of familiarity with the 
agreement.  Duron asked if it was true that, while the 
Central American countries can simply vote yes or no on the 
agreement, the U.S. Congress has the right to make 
modifications before voting.  (EmbOffs assured him that this 
was not the case.)  Duron also asked if the AFL-CIO was 
opposed to CAFTA, and if so, what its reasons were. 
 
11. (U) Notably, Duron declared that "we do want a treaty," 
but just not this one as negotiated, and suggested that if 
Honduras were allowed to make (unspecified) revisions to the 
agreement, the labor unions might be persuaded to support it. 
 
--------------------------------------------- ----- 
Comment: Opposition More Ideological than Informed 
--------------------------------------------- ----- 
 
12. (SBU) Comment: The discussion revealed that the labor 
union leaders' position on CAFTA is a grab bag of diverse 
arguments that they have collected from various sources, not 
the product of an analysis of, or even basic familiarity 
with, the actual substance of the agreement.  Some of their 
criticisms revealed their ignorance of the agreement itself 
-- for example, that the text of the agreement is a secret, 
or that the agreement does not protect the right of workers 
to organize.  Other criticisms revealed their ignorance of 
the nature of trade agreements more generally -- for example, 
Salinas' complaint that the agreement contains no standards 
for air or water quality.  And other criticisms seemed to be 
essentially ideological (rejection of the "failed neo-liberal 
economic model") rather than practical, or were not related 
to CAFTA at all. 
 
13. (SBU) Comment continued: As Minister of Labor German 
Leitzelar has repeatedly said to labor audiences, problems 
with the effective protection of labor rights will remain if 
CAFTA is not ratified.  In the final analysis, the labor 
union leaders did not present a single convincing argument 
why CAFTA will reduce, rather than enhance, the protection of 
workers' rights in Honduras.  However, by conveying various 
vaguely-formed fears about the agreement, and betraying a 
lack of familiarity with its actual contents, the union 
leaders were probably providing a very accurate 
representation of their constituents.  The Honduran general 
public still understands very little about CAFTA, and in a 
country where the poor and powerless have no historical 
reason to trust the rich and powerful, the saying "people 
fear what they do not understand" is very true.  End comment. 
 
Pierce