This record is a partial extract of the original cable. The full text of the original cable is not available.

C O N F I D E N T I A L SECTION 01 OF 04 TEGUCIGALPA 000183 
 
SIPDIS 
 
STATE FOR H, WHA/EPSC AND WHA/CEN 
STATE ALSO FOR EB/TPP/MTA/IPC 
STATE PASS USTR 
STATE PASS AID FOR LAC/CAM 
TREASURY FOR DDOUGLASS 
DOL FOR ILAB 
 
E.O. 12958: DECL: 01/25/2015 
TAGS: EAGR ELAB ETRD EWWT HO KCRM KIPR OREP PGOV
SUBJECT: CODEL WELLER LAUDS CLOSE BILATERAL RELATIONSHIP, 
HIGHLIGHTS DIVIDED OPINIONS ON CAFTA 
 
REF: A. 05 PANAMA 127 
 
     ¶B. 04 GUATEMALA 3188 
     ¶C. 04 TEGUCIGALPA 2844 
     ¶D. 04 TEGUCIGALPA 2635 
     ¶E. 05 TEGUCIGALPA 149 
 
Classified By: EconOff PDunn for reasons 1.4 (b) and (d) 
 
¶1. (U) Summary:  Congresspersons Jerry Weller, Collin 
Peterson, and Marsha Blackburn visited Honduras January 16 to 
18, 2005.  The delegation met with President Ricardo Maduro 
and top ministers, key Honduran Congressmen, including 
President of Congress (and Presidential candidate) Porfirio 
"Pepe" Lobo, and Honduran and American businessmen.  The 
delegation also made two visits outside of Tegucigalpa, one 
to a furniture factory and the other to a farm, both to 
highlight the opportunities that CAFTA and greater trade can 
bring to Honduras.  At every opportunity, Congressman Weller 
praised the close relationship that exists between the United 
States and Honduras and thanked the GOH for its cooperation 
in a variety of areas, including the fight against drug 
trafficking and terrorism.  Congressman Weller also voiced 
his strong support for CAFTA and said that he is confident 
the U.S. Congress will approve the agreement "in the spring." 
 Congressman Peterson, however, was frank in his opposition 
to CAFTA, and a prominent theme of most Honduran press 
coverage of the visit was this difference of opinion.  End 
Summary. 
 
¶2. (U) U.S. Representatives Jerry Weller (R-IL), Collin 
Peterson (D-MN), and Marsha Blackburn (R-TN) arrived in 
Honduras on January 16, on the last leg of an official trip 
that also included Colombia and Panama (see ref A).  They 
were accompanied by House International Relations Committee 
Staff members Caleb McCarry and Ted Brennan.  Congresswoman 
Blackburn departed on January 17 and the rest of the 
delegation on January 18. 
 
-------------------------------------------- 
Field Visits Highlight Promise of Free Trade 
-------------------------------------------- 
 
¶3. (U) Two visits outside of Tegucigalpa on January 17 
highlighted the benefits that greater trade can bring to 
ordinary Hondurans.  In the morning, the delegation visited a 
furniture factory whose unionized work force, of over 400, 
uses sustainably-harvested pine to produce furniture for 
export to the United States.  In the afternoon, the 
delegation visited farmers who have received technical 
assistance from the U.S. consulting firm Fintrac, supported 
by USAID.  Most of the farmers visited had, until recently, 
been planting sugar cane but had found it difficult to make a 
good profit on the crop.  Now, thanks to the assistance 
received from Fintrac, including drip irrigation equipment 
and market information, they are producing tomatoes, 
plantains, onions, and chili peppers for export to other 
countries in the region and had doubled or tripled their 
income as a result.  Press coverage of each visit served to 
counter the myth that ordinary Hondurans are unable to 
produce at an adequate level to sell to international 
markets. 
 
--------------------------------------------- --- 
Meetings with AmCham, Congressmen Focus on CAFTA 
--------------------------------------------- --- 
 
¶4. (U) A dinner hosted by the Honduran-American Chamber of 
Commerce on January 16 focused on the strong economic 
relationship that exists between Honduras and the United 
States and gave the Congressmen a chance to air their views 
on CAFTA.  Congressman Weller spoke strongly in favor of the 
agreement, declaring his optimism that the U.S. Congress will 
approve the agreement in a few months.  Congressman Blackburn 
also voiced her support of the agreement, especially 
emphasizing the importance of stricter measures for the 
protection of intellectual property. 
 
¶5. (SBU) Congressman Peterson, however, representing a 
district that produces 25 percent of all U.S. sugar, was open 
and frank in discussing his opposition to CAFTA.  "Honduras 
is not the problem," said Congressman Peterson, recognizing 
the small size of the Honduran industry (Honduras' current 
annual quota for sugar is just 10,530 metric tons) and the 
limited opening that CAFTA would grant.  The problem, he 
said, is the precedent set by including sugar in bilateral or 
regional trade agreements at all.  Peterson believes that the 
issue of sugar and other agricultural commodities should 
instead be addressed multilaterally, at a forum that includes 
the European Union.  When one AmCham board member asked 
Congressman Peterson "What can we do to change your mind 
about CAFTA?", Congressman Peterson replied that if his 
district could grow cotton instead of sugar beets, he would 
support the agreement, but that given the bad experience that 
his constituents had with NAFTA, he will not be able to 
support CAFTA.  (Note: Congressman Peterson also set up a 
private meeting with Carlos Melara, Director of the Honduras 
Sugar Growers' Association, on his last day in Honduras. 
According to Congressman Peterson, Melara expressed concern 
that a U.S. move towards free trade in sugar could ultimately 
be detrimental to the Honduran sugar industry, as the 
elimination of the quota system, which currently guarantees 
Honduran sugar a piece of the U.S. market, would place 
Honduran sugar producers in direct competition with more 
efficient producers in Guatemala.  End note.) 
 
¶6. (SBU) Congressman Weller also used the AmCham event to 
voice his concern and call the assembled business leaders to 
action over the legislation passed by the Congress of 
Guatemala in December removing data protection for 
pharmaceuticals and agricultural chemicals (ref B). 
Congressman Weller was clear that this legislation, if not 
repealed or overridden, would jeopardize the passage of CAFTA 
by the U.S. Congress.  Moreover, he expressed great 
disappointment in the lack of involvement shown by the 
Guatemalan private sector, which recognizes the importance of 
CAFTA but, according to Congressman Weller, has done little 
to lobby its government on the data protection legislation. 
Congressman Weller urged members of the Honduran private 
sector to engage with their Guatemalan counterparts on this 
issue. 
 
¶7. (SBU) Additional issues raised by the Honduran businessmen 
who attended the dinner included port security, specifically 
a request to have Puerto Cortes included in the Container 
Security Initiative, and complaints about the increased 
hassle of travel through U.S. airports due to post-9/11 
security measures. 
 
¶8. (U) The following day, discussion at a breakfast meeting 
with Honduran Congressmen also focused heavily on CAFTA. 
Honduran Congressmen in attendance at the January 18 
breakfast included the President of Congress (and National 
Party Presidential candidate) Porfirio "Pepe" Lobo, Second 
Vice President of Congress Juan Ramon Velasquez Nazar of the 
Christian Democratic Party, Roberto Contreras of the National 
Party, and Jorge Aguilar of PINU (the Party for Innovation 
and National Unity).  (Liberal Party Congressmen were invited 
but did not attend the breakfast.) 
 
¶9. (SBU) Congressman Aguilar voiced concerns that small 
businesses and small farmers would not be able to compete 
under the greater competition that CAFTA would bring to 
Honduras; Congressman Weller responded with examples from the 
two site visits he had made the previous day, showing that 
Hondurans are already successful in producing manufactured 
goods and agricultural products for export.  When the 
conversation turned to the challenge that greater competition 
with China poses to Honduras, Congressman Weller pointed out 
that such competition is also a challenge to the United 
States and declared that "CAFTA gives us the opportunity to 
integrate as a region and to better compete as a region," 
particularly with China and other Asian countries. 
 
¶10. (SBU) Congressman Weller also raised the issue of 
security, mentioning the December bus massacre (ref D) and 
two recent cases of Amcits murdered in Honduras.  President 
of Congress "Pepe" Lobo took the opportunity to list the 
measures that the current administration has taken against 
gangs, including significantly increasing jail terms for 
convicted gang members, but acknowledged that their continued 
presence had a negative impact on Honduras' image 
internationally.  Congressman Aguilar specifically raised the 
fear that organized drug-trafficking groups are now making 
use of the gangs to support their operations and cited a lack 
of economic opportunities for young Hondurans as a persistent 
underlying cause of the gangs. 
 
----------------------------- 
Meeting with President Maduro 
----------------------------- 
 
¶11. (U) On January 18, after Congressman Blackburn's 
departure, Representatives Weller and Peterson, accompanied 
by Ambassador Palmer and DCM Roger Pierce, met with President 
Maduro.  Also present, though largely silent, were Minister 
of Industry and Trade Norman Garcia, Minister of Agriculture 
Mariano Jimenez, Foreign Minister Leonidas Rosa Bautista, and 
Minister for Strategy and Communication Ramon Medina Luna. 
 
¶12. (SBU) President Maduro began the meeting by recounting at 
length the accomplishments of his administration thus far. 
On the economic front, Maduro highlighted economic growth of 
3.2 percent in 2003 and 4.3 percent in 2004, the first time 
in decades that economic growth has exceeded population 
growth for two consecutive years, and predicted growth of 5 
percent in 2005.  He also mentioned increasing international 
reserves, recently-granted debt relief, and the fiscal 
stability gained through the hard-fought battle to increase 
government control over public sector salaries, especially 
teachers' salaries.  (Comment:  There is more glitter than 
gold in this last claim, as the IMF has expressed 
disappointment with the GOH's limited progress to date on 
controlling public sector wages.  The Fund has given the GOH 
more time to work on it, but failure to rein in teachers' 
wages could have dire consequences for the budget and by 
extension for the success of the current IMF agreement.  End 
Comment.)  Despite these gains, however, Maduro acknowledged 
that "it takes time before the people feel it," and further 
stressed that foreign investment and economic growth are 
still well below the level needed (approximately 6 percent 
per year) to reach the goal of raising Honduras to the level 
of a middle-income country within twenty years. 
 
¶13. (C) On the political front, Maduro mentioned the decrease 
in the number of kidnappings and bank robberies that has 
taken place under his administration; the recent electoral 
reforms, which establish a more direct election of 
Congressmen (ref D); the change from a written inquisitorial 
system to an oral "public" system for criminal prosecution 
(the new Code of Criminal Procedures); and measures taken to 
fight corruption - though on this last point Ambassador 
Palmer interjected that he and President Maduro "have agreed 
to disagree" on the actual effectiveness of these measures. 
(Comment:  Post feels the GOH lacks the political will to 
prosecute ringleaders, only pawns have been held accountable. 
 Recent public remarks by President Maduro that public 
discussion of corruption could threaten democracy in Honduras 
only heightens our concern in this regard.  End Comment.) 
President Maduro also explained that, despite his preference 
for a consensus Central American candidate for the post of 
Secretary General of the OAS, it will be "difficult" for 
 
SIPDIS 
Honduras to support the candidacy of Paco Flores, due to the 
history of border disputes between Honduras and El Salvador 
during Flores' presidency (see ref E). 
 
¶14. (C) The Congressmen thanked President Maduro for the 
close bilateral relationship that Honduras and the United 
States enjoy, with Congressman Weller citing Honduras' prompt 
ratification of an Article 98 Agreement and Congressman 
Peterson specifically mentioning Honduran co-operation in 
intelligence and counter-terrorism matters.  Congressman 
Weller then stressed his support for CAFTA and declared his 
commitment to work for U.S. Congressional approval of the 
agreement "in the spring."  Congressman Weller also raised 
the issue of Guatemala's new data protection law and urged 
President Maduro to do what he could to ensure that this 
issue would not derail CAFTA's passage; Maduro replied that 
he was "very concerned" about the issue as well.  Congressman 
Peterson explained his opposition to CAFTA was due to the 
importance of the sugar issue to his constituents, though he 
said he recognized the importance of the agreement to 
Honduras. 
 
¶15. (C) Maduro thanked Congressman Weller for his support of 
CAFTA and said he understood Congressman Peterson's 
opposition to the agreement; drawing a parallel between 
Congressman Peterson's position on CAFTA and Maduro's 
position on Paco Flores' candidacy for the OAS, he 
acknowledged that sometimes there are positions that a 
politician would like to take but cannot due to political 
reasons.  Maduro concluded the meeting by saying that, for 
Honduras, CAFTA is about more than increased trade, but also 
about the impact on other key areas, such as promotion of 
transparency and the rule of law, greater protection of the 
environment, and labor rights, all of which contribute to an 
improved investment climate and greater opportunities for 
sustained economic growth.  Referring back to the steps that 
have been taken against crime in Honduras under his 
administration, Maduro acknowledged that the government can 
only go so far before it hits the basic underlying causes of 
crime, which include a lack of economic opportunity and low 
levels of education for most Hondurans.  The gains offered 
through CAFTA will address these root causes of violence and 
also help convince the Honduran people that more open 
democratic institutions are worth preserving, as they truly 
do deliver a better standard of living for ordinary Hondurans. 
 
----------------------------------------- 
Press Focuses on Differing Views of CAFTA 
----------------------------------------- 
 
¶16. (U) Much of the press coverage of the delegation's visit 
focused on the difference of opinion that Congressmen Weller 
and Peterson have regarding CAFTA.  While headlines captured 
Congressman Weller's confidence that CAFTA will be passed in 
a few months, Congressman Peterson's opposition to the 
agreement, especially as explained at the press conference 
following the visit with Presidential Maduro, was widely 
covered as well. 
 
¶17. (U) CoDel Weller did not clear on this cable prior to 
their departure. 
Palmer