US embassy cable - 05SANSALVADOR2174

UNCLAS SECTION 01 OF 02 SAN SALVADOR 002174 
 
SIPDIS 
 
DEPT PASS USTR FOR RVARGO 
 
E.O. 12958: N/A 
TAGS: ETRD, KPAO, ES 
SUBJECT: NATIONAL AND MEDIA REACTION TO CONGRESSIONAL APPROVAL OF 
CAFTA-DR LEGISLATION 
 
 
1.  SUMMARY:  Salvadoran elation at the July 28 U.S. Congressional 
approval of the U.S.-Central America-DR free trade agreement (CAFTA- 
DR) was evident in the first hours after the vote, when President 
Saca called it a victory for democracy.  Subsequent days have 
brought heavy and constant press coverage of U.S. politics around 
CAFTA-DR, of the agreement itself, and of the likely impact of the 
agreement on El Salvador.  The principal theme that has emerged is 
that now that CAFTA-DR is a reality, the private and public sectors 
must take steps to see that CAFTA-DR opportunities are exploited as 
fully as possible.  Additional reactions are likely to be muted 
this week, when government offices are closed and much of San 
Salvador is enjoying the country's August feast days.  End Summary. 
 
Official Reaction 
 
2.  President Saca appeared on the national news immediately after 
the vote Thursday morning to express his satisfaction with the 
outcome, calling the event "an important night for democracy and 
for the country."  In that statement and interviews the following 
morning, Saca stressed that the vote was a good message for Central 
America and democracy, economic openness and the free market.  Saca 
emphasized CAFTA-DR's benefits in generating stability, creating 
employment opportunities, and making Central America attractive to 
investors.   On Thursday evening, Saca used time on national 
television and radio to thank President Bush for his strong 
support. 
 
Opposition Reaction 
 
3.  The left-wing FMLN opposition party's reaction was negative, 
criticizing CAFTA-DR for ignoring economic asymmetries between the 
U.S. and Central America and predicting that Central America would 
be overwhelmed by U.S. economic strength.   A representative of 
left-leaning rule of law advocacy group FESPAD (Fundacion de 
Estudios para la Aplicacion de Derecho) claimed that CAFTA-DR is 
inconsistent with labor provisions of the Salvadoran Constitution 
and that CAFTA-DR article 1 violates the Central American Regional 
Integration System (SICA) regulation.  On Sunday, July 31, the FMLN 
placed a paid statement that expressed its concern over the absence 
of consensus among the political, social and productive sectors of 
the U.S. and CA over CAFTA-DR and included a litany of well-known 
and unsubstantiated allegations about the effects of the agreement. 
The left-wing think tank FUNDE responded in a more moderate way 
with a paid ad on July 29, "CAFTA-DR:  A reality to Be Adequately 
Addressed" that calls for the extension of CAFTA-DR benefits to 
groups historically excluded from economic opportunity and for 
measures to protect the vulnerable.  Repeating a familiar concept, 
FUNDE's ad says that the country cannot continue "privatizing 
opportunity and socializing threats" and offered its collaboration 
toward socioeconomic, institutional and legal changes necessary to 
maximize opportunity and minimize threats in favor of the poor and 
vulnerable. 
 
Press Coverage 
 
4.  Salvadoran reaction to the early-morning July 28 vote by the 
House of Representatives to approve CAFTA-DR implementing 
legislation was received with initial elation that quickly evolved, 
among all but the far political left, into a metaphoric rolling-up 
of sleeves to prepare for life with CAFTA-DR.  On July 28, the two 
largest-circulation dailies, center-right "La Prensa Grafica (LPG)" 
and right-wing "El Diario de Hoy (EDH)," carried large, front-page 
headlines such as "Yes to CAFTA-DR: Bush Put It all in Play (LPG) 
and both devoted considerable space to the story.  The smaller 
dailies also carried considerable coverage.  Centrist El Mundo's 
first three pages were devoted to the story and highlighted the 
opportunities and challenges to be faced in preparation for the 
entry into force of CAFTA-DR.  Afternoon leftist daily Co-Latino's 
five-page coverage included the news of approval in the House and 
President Saca's positive reaction but also last-ditch efforts by 
opponents to defeat CAFTA-DR, the FMLN's plans for a constitutional 
challenge, and an article claiming that the general public had not 
been adequately about "the dubious benefits" of the agreement.  The 
same sorts of reactions, positive and negative, also dominated the 
news coverage on all national television channels on July 28 and 
29. 
 
 
5.  Subsequent newspaper columns continued to exhort Salvadorans to 
rise to the occasion and take advantage of CAFTA-DR: 
 
LPG's July 28 editorial, "We Have CAFTA-DR Now," called for 
confronting the hard reality of CAFTA-DR, overcoming special 
interests, and using the period from now until entry-into-force to 
accelerate preparation.  The paper cited the agreement's symbolic 
importance, saying Central America is now "on another page" and 
that the day would remain a "date of maximum importance in the 
history of our development." 
 
On July 29, the EDH editorial entitled "CAFTA-DR opens doors for 
regional development" echoed the theme of regional integration 
raised a day earlier by centrist El Mundo and credited U.S. 
Congressional approval to efforts of Central American presidents, 
generational struggles in favor of globalization and the market 
economy, and above all to "the conviction and moral force of 
President George Bush." 
 
LPG's July 29 editorial, "From Concession to Compromise," reminded 
readers that "nothing is free," that the fundamental benefits of 
the agreement are the stability of such a multilateral agreement 
but that the moment called for unleashing the adrenaline that the 
country needs to change. 
"U.S. Approves FTA with Central America, Celebrated in El Salvador" 
(left-wing Co-Latino, July 30): Lamenting that "preparation for 
serious competition" did not start at the moment the idea of CAFTA- 
DR was conceived, this editorial said, "for those of us who were 
only mute witnesses of the negotiations and listeners to the [back 
and forth], it only remains for us to wait and prepare for what 
comes."  The editorial characterized President Saca's "call for all 
Salvadorans to celebrate" as "fairly difficult" since the 
population never realized what was being negotiated, but even this 
editorial leaves the choice to Salvadorans to wait either passively 
or actively. 
 
"CAFTA-DR Approved: Now What?" (LPG, July 30): Business columnist 
Luis Membreno wrote: "We've mentioned many times before the 
necessity of looking for new engines of .economic growth (and) 
.generation of employment.  We have no doubt that exports should be 
one of these new growth engines.nor do we doubt that the way to 
take advantage of opportunity of CAFTA is through the spawning of 
hundreds and thousands of small, medium and large enterprises that 
are capable of exporting to the U.S. market.. Let's take advantage 
of the opportunities and minimize the risks so that this agreement 
becomes the catalyst for development that we've been seeking.." 
 
"Getting Them to Embrace CAFTA-DR" (LPG, July 31): Columnist Kalena 
de Velado applauds supporters of CAFTA-DR who put the national good 
above parochial interests and supported CAFTA-DR, and called on 
Salvadorans to pull together like a family to ensure that maximum 
good comes out of it. 
 
"And How Will CAFTA-DR Benefit Me"?  (EDH July 31):  Columnist 
Pedro Roque opined,  "CAFTA-DR is here and represents challenges 
for all. How any individual will benefit will depend on his 
attitude and how he prepares for the challenge." 
 
"Today it Depends on Us!" (EDH, July 30):  Columnist Eduardo Torres 
calls on Central America to thank President Bush for making CAFTA- 
DR the center of his trade policy and for stressing the 
geopolitical importance of the agreement.  Given the great 
confusion of the left in Latin America and the mixed outlook for a 
number of countries, Torres calls CAFTA-DR a powerful tool to bring 
democracy and development to the region. 
 
"CAFTA-DR:  A Great Opportunity to Exploit" (LPG, August 1): 
Banking association executive Claudio de Rosa cites the challenges 
to be met to take advantage of CAFTA-DR:  upholding ILO labor 
standards; respecting intellectual property; and respecting 
environmental laws.  Anything less, he writes, could lead to loss 
of businesses and jobs.  De Rosa also cites the benefits of 
institution-building to be brought by CAFTA-DR. 
 
6.  Reactions for the remainder of the week are likely to be muted, 
with the government closed and much of San Salvador away in 
celebration of the August feast days.  But the government and 
private sector organizations are focused, and work will begin in 
earnest on August 8.  Issues that will be of immediate interest 
will include the structure of the administrative body that will 
implement CAFTA-DR, and programs to support social and producer 
groups likely to be affected by implementation of CAFTA-DR.  We 
expect more attention to the process of ratification in Costa Rica, 
Nicaragua, and the Dominican Republic, an issue that has not caught 
the imagination of the Salvadoran press over the last several days. 
BARCLAY