US embassy cable - 05TEGUCIGALPA1752

UNCLAS SECTION 01 OF 02 TEGUCIGALPA 001752 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR WHA/CEN AND EB/TPP/ABT 
STATE PLEASE PASS USTR 
DOL FOR ILAB 
TREASURY FOR DDOUGLAS 
COMMERCE FOR MSIEGELMAN 
GUATEMALA FOR FCS MITCH LARSEN and FAS STEVE HUETE 
 
E.O. 12958: N/A 
TAGS: ETRD, EIND, ELAB, PGOV, HO 
SUBJECT: U.S. ratification of CAFTA spurs potential 
investors and traders into action 
 
Reftel: Managua 02304 
 
This cable is Sensitive But Unclassified; please protect 
accordingly.  It contains business confidential information, 
and is not intended for internet distribution. 
 
1. (U) Per reftel request, post reports increased investment 
and trade momentum, stemming from CAFTA ratification in 
Honduras and the U.S.  Since the U.S. Congress ratified 
CAFTA implementing legislation on July 27, several key 
Honduran business organizations report an increase in 
companies interested in exporting to and from Honduras, 
accelerated momentum on foreign investment projects 
previously placed on hold pending approval of CAFTA, and a 
general up-tick in requests for information on doing 
business in Honduras.  Please note that all company names 
should be considered business confidential. 
 
2.  (U) The Honduran NGO Foundation for Investment and 
Export Development (FIDE) reports that 10 companies have 
either initiated or moved forward on plans to establish 
manufacturing facilities in Honduras since July 27.  The 
majority of these companies represent an expansion in the 
maquila sector out of traditional textile and apparel 
manufacturing.  Potential new manufacturing facilities would 
include:  Automotive electrical wire harnesses (2 
companies), electrical parts and switches, printing 
materials and cardboard, wood furniture and iron 
chandeliers, bathroom fixtures and accessories, textiles (3 
companies), and liquefied natural gas (LNG) investment 
(Note:  Of the 10 companies working with FIDE, the Foreign 
Commercial Service office in Tegucigalpa referred four to 
the organization for further assistance). 
 
3.  (SBU) U.S. company Delphi, a manufacturer of wire 
harnesses, has once again taken up consideration of a 
several million dollar maquila investment in Honduras. 
Delphi visited Honduras just after CAFTA passage in the U.S. 
Congress, after putting all investment on hold during the 
CAFTA ratification processes in both countries.  Such 
investment is particularly important as Honduras strives to 
diversify into other areas of production besides textiles. 
 
4.  (SBU) The Honduran-American Chamber of Commerce (AmCham) 
received three calls from interested parties the day after 
CAFTA passage, including a call from the Port of 
Brownsville, which plans to lead a delegation to Honduras 
later this year.  The delegation would include Texan 
businessmen interested in doing business in Honduras, and 
also would serve as a marketing trip by Port of Brownsville 
executives. 
 
5. (SBU) According to Roberto Interiano, General Manager of 
the Honduran Manufacturer's Association (AHM), the AHM is 
working with a number of investors looking to take advantage 
of CAFTA implementation in Honduras.  American investors are 
developing a new export processing zone (or "ZIP", for its 
initials in Spanish) in Naco, just south of Puerto Cortes. 
According to AHM, following CAFTA ratification, American 
disposable medical gowns manufacturer Avent initiated talks 
to expand their operation in Villa Nueva.  Various Brazilian 
thread manufacturers are exploring Honduras as a production 
site.  In addition, AHM reports a number of American 
companies have contacted them in recent weeks for general 
information, without registering with the Association. 
 
6. (SBU) Post is currently coordinating with the Department 
of Commerce on a Secretary of Commerce-led regional trade 
mission October 16-22, featuring a delegation of 15-20 
prominent U.S. businesses. These companies will visit the 3 
CAFTA countries that have ratified (Honduras, El Salvador, 
and Guatemala) to meet trading partners and establish 
relations.  The Department of Commerce will continue 
recruiting for the delegation until mid-September, but 
reports they already have strong interest from a number of 
companies, including world-class firms such as G.E. 
 
7. (SBU) The Foreign Agricultural Service (FAS) office in 
Tegucigalpa notes an increase in inquiries both from 
companies interested in exporting to and importing from 
Honduras. According to FAS, the inquiries can be broken down 
as follows: 
 
Interested in exporting from the U.S. to Honduras: Honduran 
businessman Jose Nolasco (looking for U.S. Manufacturers/ 
Suppliers of pasta products); Honduran businessman Javier 
Flores (looking for U.S. Suppliers of onion, garlic and 
carrots); Honduran firm Inversur (looking for U.S. Suppliers 
of pork); and U.S. firm WISHH (looking for Honduran 
importers of texturized soy). 
 
U.S. company inquiries about Honduran import regulations: 
Cargill (concerning expedited processing for unloading of 
corn); Mayer, Brown, Rowe & Maw LLP (concerning tariff 
levels for Distillers Dried Grains with Solubles, DDGS); and 
Prima Tech USA (requesting an assessment of bovine and pork 
potential/needs in Honduras for animal health products). 
 
Several firms have also contacted FAS for information on 
exporting from Honduras to the U.S., including Honduran firm 
Aguazul S.A.(Drinking water) and U.S. firm Citricos Coqui 
(oranges).  Firms seeking information related to U.S. import 
regulations: Honduran firm Panificadora Real (color 
additives in food products) and Fosforera Centroamericana 
(concerning wood packing material requirements). 
 
 
Williard