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 SAN SALVADOR 000116 
 
SIPDIS 
 
E.O. 12958: DECL: 01/12/2016 
TAGS: ETRD PREL ES CAFTA
SUBJECT: NO GOOD OPTIONS ON CAFTA FOR EL SALVADOR: 
IMMEDIATE DELIVERY OF SYSTEMS EQUIVALENCE AND DELAY BEYOND 
FEBRUARY 1 BOTH RAISE RISKS 
 
REF: A. A) SAN SALVADOR 109 
 
     ¶B. B) SAN SALVADOR 65 
 
Classified By: AMB. H. DOUGLAS BARCLAY.  REASON:  1.4 (D) 
 
¶1.  (C) Foreign Minister Francisco Lainez and Minister of 
Economy Yolanda de Gavidia met the Ambassador in the evening 
of January 12 to continue the discussion of CAFTA 
implementation, in anticipation of a January 13 morning call 
from President Bush to President Saca.  De Gavidia repeated 
that the problem El Salvador has in issuing a finding of 
equivalence between the U.S. and Salvadoran 
sanitary/phytosanitary (SPS) systems before January 16 (the 
deadline in order to permit a February 1 entry into force) is 
a legal one, not a political one.  Salvadoran law required 
the GOES to walk through certain steps in order to promulgate 
a regulation that defined how to implement systems 
equivalence.  De Gavidia said that the Legal Advisor in the 
Presidency, Luis Mario Rodriguez, had determined that a 
finding of equivalence would be illegal if the GOES did not 
follow this process.  To illustrate GOES sincerity on this 
point, she commented that the GOES had had political problems 
in revising its proposed system for tariff rate quota (TRQ) 
administration, but had worked through this to make the 
necessary changes for entry into force. 
 
¶2.  (C)  The Ambassador presented de Gavidia and Lainez a 
copy of Ambassador Susan Schwab's letter response to a 
communication from De Gavidia dated January 12 in which she 
laid out an argument about legal requirements the GOES must 
meet.  The Ambassador told her that the USG believed that 
such requirements did not exist.  De Gavidia raised the 
concern that any legal misstep by the GOES in rulemaking or 
execution would open the door to an FMLN (the far left 
political opposition) suit against CAFTA in the Supreme Court 
which could hang up the whole CAFTA agreement in the 
Salvadoran legal system; she and Lainez believed that the 
FMLN would have no grounds to pursue this course if the GOES 
were to follow the correct procedures in working out SPS 
systems equivalence.   The risk of a lawsuit was 
unacceptable.  As a result - if the legal opinion about a law 
governing rulemaking is correct - the GOES will miss Feb 1 
entry into force whether the regulatory process they define 
is lengthy or brief. 
 
¶3.  (C)  If El Salvador misses a February 1 entry into force 
date, we expect that the U.S. disagreement with El Salvador 
and other CAFTA signatories over the legal status of the 
commitment in the SPS Working Group to systems equivalence 
will come out in the open.  It will come out because de 
Gavidia said she will have to tell the public that the GOES 
missed the February 1 date because the USG insisted on 
obtaining a benefit that was not in CAFTA.  Such a tack by 
the GOES would put the USG on the defensive and raise the 
profile of an underlying concern that current practices in 
allocating economic opportunity in the Salvadoran economy may 
be exclusionary.  We cannot predict what impact a public 
discussion of this issue would have on our trade relations 
elsewhere.  De Gavidia also said that the GOES would have to 
go back to the Legislative Assembly to reform the December 
legal reforms undertaken for CAFTA implementation, since 
these reforms could not go forward without CAFTA. 
 
¶4.  (C) Comment:  we recognize how difficult it would be 
technically to find a solution to allow February 1 entry into 
force, as Foreign Minister Lainez sought, in particular the 
necessary assurances that a finding of equivalence would be 
forthcoming.  Any solution for El Salvador may elicit a 
backlash in Central America and in other trade negotiations. 
It is hard to envision an exception for El Salvador that did 
not extend to all of Central America. Still, the political 
arguments for finding a solution for February 1 are 
compelling.  We do not know the specific legal citation that 
de Gavidia believes applies and await that information. 
However, the FMLN has made statements in the past that it 
would mount a legal challenge to CAFTA.  Our experience with 
the Salvadoran courts (in cases involving contract 
enforcement with McDonald's and AIG, or telecommunications 
regulation) tells us that the court could well take on such a 
challenge and that the case could take years to work out. 
Barclay