VZCZCXYZ0000
PP RUEHWEB

DE RUEHSN #0041/01 0101907
ZNY CCCCC ZZH
P 101907Z JAN 07
FM AMEMBASSY SAN SALVADOR
TO RUEHC/SECSTATE WASHDC PRIORITY 4822
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE PRIORITY
RUEHHE/AMEMBASSY HELSINKI PRIORITY 0298
RUEHMD/AMEMBASSY MADRID PRIORITY 3602
RUEHME/AMEMBASSY MEXICO PRIORITY 6406
RUEHBS/USEU BRUSSELS PRIORITY

C O N F I D E N T I A L SAN SALVADOR 000041 
 
SIPDIS 
 
SIPDIS 
 
FOR EUR, WHA/CEN, WHA/PPC, WHA/EPSC, WHA/FO, AND USOAS 
PLEASE PASS TO OAS WASH DC 
 
E.O. 12958: DECL: 01/10/2017 
TAGS: PREL PGOV KCRM XK ES ETRD EU
SUBJECT: THE CENTRAL AMERICAN INTEGRATION SYSTEM 
 
REF: A. 06 SAN JOSE 2806 
 
     ¶B. 06 HELSINKI 1236 
 
Classified By: DCM Michael A. Butler.  Reasons 1.4 (b) and (d) 
 
¶1.  (C)  SUMMARY.  Although established in 1992, the Central 
American Integration System (SICA) remains an incipient 
attempt by the countries of Central America to achieve 
regional integration and cooperation.  The organization 
includes the member nations of Belize, Costa Rica, El 
Salvador, Guatemala, Honduras, Nicaragua and Panama.  The 
Dominican Republic is an associate member, and Mexico, Spain, 
and Taiwan are observers.  To date the USG has had limited 
engagement with SICA as a political entity.  USAID has, 
however, worked extensively with two of the 20 plus 
subsidiary organizations for nearly a decade, and beginning 
in 2005 all USAID funding for subsidiary organizations is 
being provided through agreements signed with SICA.  The most 
recent agreement (800,000 USD to support Central American 
efforts to combat gangs and violence through preventative 
actions) received prominent mention in the October Central 
American Summit of Presidents held in Tegucigalpa.  The EU 
has already made clear that it will negotiate and implement 
all aid and trade deals for Central America on a regional 
basis only, and thus SICA may become more important as the 
Europeans use their leverage to encourage increased 
integration in Central America.   SICA and its subsidiary 
organizations could provide a path for the U.S. to engage and 
influence on items in our interest as well.  The USG could 
invest significantly in strengthening the organization by 
becoming an observer, or could help influence it by asking 
the friendliest governments in the region like El Salvador to 
guide the organization in a helpful direction.  END SUMMARY. 
 
Background 
---------- 
 
¶2.  (U)  SICA was established with the signing of the 
Tegucigalpa Accords on December 13, 1992.  The Protocol built 
on the already existing Organization of Central American 
States, and envisioned Central America as a region of peace, 
liberty, democracy, and development.  The primary 
institutions of SICA include: the Central American Parliament 
(PARLACEN) which is located in Guatemala and consists of 130 
representatives who are given diplomatic privileges and 
immunities; the Central American Court of Justice located in 
Managua; and the Secretariat General of SICA (SG-SICA) in San 
Salvador.  Two of the nearly 20 subsidiary organizations of 
SG-SICA deserve special note--SIECA and CCAD (regional 
organizations of Ministers of Trade and the Environment 
respectively).  SICA's highest body is its Summit of 
Presidents, and any agreement on fundamental changes or 
direction for the organization must be agreed upon directly 
by the Heads of State of the various members.  SICA hosts 
quarterly meetings of the Central American Presidents, Vice 
Presidents, and Foreign Ministers.  Periodic meetings of 
Ministers of Labor, Agriculture, Environment, Public 
Security, and other sectors are also convened by the SICA 
subsidiary organizations. 
 
Rule of Law and Political Integration 
------------------------------------- 
 
¶3.  (C)   SICA and the subsidiary organizations of SG-SICA 
(comparable in structure although not in authority to the 
European Commission) have many of the bearings of a serious 
regional organization.  Its ideals are sound, it has regular 
institutions, and its high-level meetings are noteworthy and 
often productive for dialogue among the leaders in the 
region.  Yet while the Summit of Presidents contemplates 
"defining and directing Central American politics, 
harmonizing foreign policies, and strengthening regional 
identity," the organizations achievements toward integration 
to date are modest at best.  (Note: The current Secretary 
General of SICA is Honduran lawyer and career diplomat Anibal 
Enrique Quinonez Abarca, a relative unknown in the power 
structures of Central American politics.  End Note).  Some 
success has come in the area of rule of law, however.  The 
Democratic Security Treaty of Central America gives the SICA 
members a solid framework for improving rule of law and the 
administration of justice, and gives the members a framework 
for cooperation on security matters.  Chapter Two of this 
Treaty has specific interest for the USG as it addresses 
issues like combating terrorism, human trafficking and the 
narcotics trade.  Chapter Three is also important because it 
addresses regional security and mandates that the states 
share certain information on a military to military level. 
This document is one of the most important efforts at 
political integration and coordination the group has made 
since its founding. 
 
¶4.  (C)   Concerning the administration of justice, the 
Central American Court of Justice can play a decisive role in 
solving disputes, and provide a forum for the redress of 
wrongs committed by certain corrupt politicians or others 
that may be shielded in their home countries.  PARLACEN, 
however, has achieved little during its existence and is seen 
by many citizens of the region as simply a vehicle for 
providing out of work politicians with a salary and 
diplomatic immunity that protects them from prosecution 
throughout the region.   (Note: One PARLACEN representative 
from El Salvador recently had his immunity removed by the 
Legislative Assembly for egregious acts of corruption while 
previously serving as a mayor.  End Note). 
 
¶5.  (C)   In a recent conversation, Jorge Alberto Umana (Head 
of Central American Integration Issues at the Salvadoran MFA) 
told poloff that the GOES is most optimistic about the 
possibilities for success in regional cooperation on the 
issue of security.  While not downplaying the importance of 
economic integration and successes in that area to date, 
Umana stressed that the GOES would be particularly interested 
in more regional engagement on security.  USAID has invested 
USD 800,000 to support the effort to stop gang violence, but 
a major political strategy to address the problem has not 
been brokered at a regional level.  While gang violence is of 
greater concern in the "Northern Triangle" of Central America 
(El Salvador, Honduras, Guatemala), there is increasing 
recognition by the governments of the region and Mexico that 
a regional approach will be necessary to fight this 
transnational problem. 
 
Economic Integration 
-------------------- 
 
¶6.  (U)   Economic integration in Central America continues 
to deepen as the region reaps the benefits of CAFTA and takes 
advantage of arrangements such as the new customs and border 
agreements between Guatemala, Honduras, El Salvador and 
Nicaragua (CA-4), which allows for the freer flow of goods 
and people in the northern half of Central America.  The 
Economic Integration Secretariat for Central America (SIECA), 
a SICA subsidiary, has become the key regional body promoting 
economic integration among Central American countries.  One 
of its most notable achievements has been the reduction and 
harmonization of external tariff rates across the region.  To 
date, 97 percent of external tariff rates have been 
harmonized; the remaining 3 percent are for sensitive goods 
such as dairy, coffee, sugar, rice, and a number of 
industrial goods.  SIECA has also worked with customs 
authorities to modernize their operations and reduce the time 
and cost of trading across Central American borders. 
Ministers of Economy of the region meet at least quarterly 
through SIECA, and other technical sub-committees work to 
implement regional agreements on a variety of topics 
important to regional commerce.  There has been some progress 
on labeling issues; however, much work remains in developing 
a common market on other issues such as intellectual property 
rights, quota management, sanitary and phytosanitary 
standards, and technical standards.  During CAFTA-DR 
negotiations, SIECA played a role coordinating common 
positions and providing technical expertise to member 
governments. 
 
¶7.  (U)  The Central American Commission for the Environment 
and Development (CCAD, the environmental equivalent of SIECA) 
is currently playing a useful role in CAFTA-DR 
implementation.  Chapter 17 of CAFTA-DR requires signatory 
countries to effectively enforce their environmental 
standards, and CCAD has been the major source of technical 
expertise when Ministries of Environment face challenges in 
meeting this commitment.  Again, CCAD has no supra-national 
authority, but by convening Ministers of Environment across 
the region, the organization is able to point out areas where 
particular countries face the risk of not complying with 
CAFTA-DR, and thus serves as an effective, if informal, "peer 
review" process.  We understand that CCAD forums frequently 
serve as the venue for discussion and agreement on Central 
American positions on votes in international organizations 
such as CITES (Convention on Trade in endangered Species). 
 
The European Angle 
------------------ 
 
¶8.  (C)  Reftels A and B give some background on current 
European desires to manage the vast majority of their 
business with the Central Americans on a regional basis. The 
example in reftel B of how the Finnish are managing the 
investment of 7 million euros to support renewable energy 
projects in Central America is a perfect example of how the 
Europeans envision their engagement with the region.  The 
other major issue is the EU demand that new trade 
negotiations between the EU and Central American be conducted 
at a strictly regional level, with one sole Central American 
interlocutor and spokesman for the national negotiating 
teams.  The Central Americans have agreed to rotate this 
spokesman between the countries, but are unsure if the EU 
will accept the plan (reftel A).  It is unclear how 
successful the European efforts to encourage regional 
integration modeled on their own institutions will be.  What 
is clear is that the Europeans will continue pressing the 
issue, and the Central Americans will at least try to comply 
with their wishes.  The Government of Spain just announced it 
will donate 26 million USD for the members of SICA to pursue 
increased integration.  Costa Rica also announced at the last 
summit that an Executive Council should be re-activated to 
monitor the success of implementing Presidential mandates 
agreed upon at the summits. 
 
Comment 
------- 
 
¶9.  (C)  As the Department considers options for sustaining 
progress on free trade and democratic consolidation, the SICA 
network of organizations clearly offers additional venues for 
engaging senior officials from all Central American 
countries.  The USG could take the step of becoming an 
observer, like Mexico and Spain, and use this formal route as 
a method to influence the agenda and monitor the work of the 
organization at all levels.  Another option is for the USG to 
continue to engage our most reliable interlocutors and allies 
in the region to help press issues of USG interest at their 
high level meetings.  Sustaining the modest levels of support 
for the Secretariat, and in particular SIECA and CCAD, also 
enables us to engage in ministerial and technical-level fora 
on a range of trade and economic policy issues.  As the 
Europeans continue to obligate Central American governments 
to negotiate as a regional group, the Central Americans may 
be forced to give SICA a more important role in issues of 
political and economic import.  Post remains ready to help in 
coordinating with SICA as the Department sees fit. 
Barclay