US embassy cable - 05SANTODOMINGO1051

UNCLAS SANTO DOMINGO 001051 
 
SIPDIS 
 
SENSITIVE 
 
DEPT FOR WHA, WHA/CAR, WHA/EPSC, EB/TPP 
 
E.O. 12958: N/A 
TAGS: ECON, ETRD, KTEX, DR 
SUBJECT: DOMINICAN PRESIDENT INAUGURATES U.S. PLANT, AGAIN 
ENDORSES FREE TRADE 
 
REF: FULL TEXT IN SPANISH AVAILABLE ON SIPRNET SITE 
 
     HTTP://WWW.STATE.SGOV.GOV/P/WHA/SANTODOMINGO 
 
1. (U) At the February 21 ground-breaking for a large 
U.S.-owned textile mill, President Leonel Fernandez 
characterized the project as one aspect of the Dominican 
Republic's response to the challenges of competition and 
globalization.  He expressed confidence that the free trade 
agreement with the United States and Central America would be 
ratified this year. 
 
2. (U) Fernandez said that the investment in the central 
provincial town of Bonao by U.S.-owned Sara Lee Corporation 
was a demonstration of increasing confidence in the Dominican 
economy and offered further opportunity for progress. He 
spoke of a new, export-oriented strategy to boost Dominican 
competitiveness and applauded the success of Dominican free 
zones over the past two decades. 
 
3. (U) The President sketched out the benefits to the region 
of the U.S. Caribbean Basin Initiative and he emphasized 
benefits gleaned by Mexico from NAFTA. China and India would 
be major challengers in the textile and garment sectors as 
trade increases world wide. Regional partners are well aware 
of this; Dominican Technical Secretary of the Presidency 
Temistocles Montas traveled to Guatemala the previous weekend 
to participate in regional consultations sponsored by the 
Inter-American Development Bank concerning the impact of 
China on the Central American economy and its free zones and 
factories. 
 
4. (U) Fernandez emphasized the importance of the CAFTA. 
"Well before the signature of that agreement, we were 
advocates for the view that the country's economic 
development is linked to that regional pact. . . We are 
confident that the agreement will be completed both in the 
United States and here in the Dominican Republic this year, 
and the legislative ratification will be a guarantee for 
future investment and new employment."  Sara Lee's investment 
was a vote of confidence in that future; with implementation 
of CAFTA, foreign investment would return to the Dominican 
Republic and put an end to the economy's current difficulties. 
 
5. (U) Fernandez recalled his recent encounter with 
Microsoft's Bill Gates, on vacation in the Dominican 
Republic. The President recounted a visit during his previous 
term to Seattle, where his staff reported with delight that a 
baseball cap for sale in the Microsoft gift shop carried the 
tag "Made in the Dominican Republic". Fernandez expressed his 
wish that in the future, Microsoft would be offering for sale 
computer software also originated in the Dominican republic. 
 
6. (SBU) Comment: Sara Lee is investing USD 72 million in 
this new textile mill in Bonao. It will constitute Sara Lee's 
first textile mill but its sixth investment in the country. 
The groundbreaking ceremony was well attended by senior 
government officials including Secretary of Industry and 
Commerce Francisco Javier Garcia. It was clear from their 
comments that there was widespread support for CAFTA 
ratification in general, but that the administration as yet 
had no concrete plan or roadmap to accomplish that goal. 
HERTELL