US embassy cable - 05TEGUCIGALPA1577

UNCLAS SECTION 01 OF 02 TEGUCIGALPA 001577 
 
SIPDIS 
 
 
DEPT. FOR WHA/PD; IIP/G/WHA DIPASQUALE; AND IIP/T/ES 
DEPT. FOR EB/TPP DCLUNE, WHA/EPSC AND WHA/CEN 
DEPT. PASS USTR 
 
E.O. 12958: N/A 
TAGS: OIIP, KPAO, ETRD, HO, USTR 
SUBJECT: MEDIA REACTION ON CAFTA, JULY 29, 2005 
 
 
1.   On 07/29 the Tegucigalpa-based liberal daily "La 
Tribuna" published an editorial entitled "Tight."  "In a 
tight vote, 217 vs. 215, the United States House of 
Representatives approved the Free Trade Agreement for 
Central America and the Dominican Republic.  The Bush 
administration barely succeeded, after a struggle in which 
the President himself had to personally appeal to various 
members of Congress. He finally won the support of some 
doubting Republicans and got 15 Democrats to vote against 
party lines." 
 
 "The reaction to the news in Central American countries has 
been mixed. There is jubilation in the government spheres 
that negotiated the agreement and in the industrial sectors 
that are already calculating the added benefits for their 
companies. But there is distrust within the labor unions, 
which believe that the FTA will negatively affect the most 
vulnerable sectors of the economy, fundamentally in the 
countryside. Political opponents are also distrustful, as is 
the case among the left wing fronts in Nicaragua and El 
Salvador." 
 
"Now the argument that proponents will be hammering home in 
those countries where it has not been ratified is that if it 
is not done, their country will be left behind. There is no 
doubt that a lot of investment will be transferred to those 
countries whose markets are part of the FTA.  And even more 
in those countries in which there is adequate preparation 
for competition.  When will we start here?" 
 
2.   On 7/29, the San Pedro Sula-based liberal daily 
"Tiempo" published an editorial entitled "Now What?" "We now 
have a Free Trade Agreement with the United States and this 
is just the beginning. Now it is up to the politicians, 
government officials, industrialists, and labor to take the 
necessary actions to meet the challenge, in other words, to 
compete openly in a free trade zone." 
 
"For Central America, the passing of the CAFTA-DR agreement 
is important and brings the hope of improving our industrial 
and agricultural export capabilities. It also offers the 
possibility of containing emigration to the north and 
increasing sales to the vast and affluent U.S. market. This 
will only be possible with elevated productivity of high 
quality products at competitive prices." 
 
"The ball is now, as they say, in the court of the Central 
American `northern triangle.' Honduras has to implement 
innovative and effective economic policies in order to 
improve its productive infrastructure, intelligently exploit 
its natural resources, incorporate new technologies and new 
ways of corporate management, reform its labor laws, and 
prepare the workforce to be competitive." 
 
"Up to now, as far as we know, none of this has been 
seriously considered by the political parties. On the 
contrary, we are witnessing an improvisation and complete 
ignorance of our reality, especially in economic and social 
issues." 
 
3. On 7/29, the Tegucigalpa-based moderate daily "El 
Heraldo" published an editorial titled "Let's Compete." "The 
narrow approval of the Free Trade Agreement with Central 
American and the Dominican Republic by the United States 
Congress represents an irrefutable triumph for President 
George W. Bush, who invested all his political capital in 
the project.  However, if we are capable of capitalizing on 
it, in the long run, it will be more advantageous for the 
people of Central America and the Dominican Republic." 
 
"The pretext used by those conservatives in the United 
States who oppose CAFTA is the fear that the transnational 
corporations will move their assembly plants in search of 
lower wages and that this will cause unemployment. 
Meanwhile, the liberals are aligned with the social 
movements in the signatory countries, arguing that the 
agreement does not have enough safeguards for labor and that 
it will become an instrument of exploitation." 
 
"But the truth is that, besides the fact that countries like 
Honduras need massive sources of employment to fight 
poverty, CAFTA not only represents the possibility of 
increased foreign investment, but it will also give Honduran 
producers access to the most important market in the world. 
This will in addition generate more employment and 
contribute towards creating national wealth." 
 
"In the end, the benefits that the people of Central America 
can receive from CAFTA depend 100% on the capacity of their 
governments and producers to increase competitiveness. In 
other words, the opportunity will be available starting next 
year: it all depends on us and if we know how to take 
advantage of it." 
 
 
Tuebner