VZCZCXRO2898
PP RUEHAO RUEHCD RUEHGA RUEHGD RUEHGR RUEHHA RUEHHO RUEHMC RUEHMT
RUEHNG RUEHNL RUEHQU RUEHRD RUEHRG RUEHRS RUEHTM RUEHVC
DE RUEHSN #0604 1812200
ZNR UUUUU ZZH
P 302200Z JUN 09
FM AMEMBASSY SAN SALVADOR
TO RUEHC/SECSTATE WASHDC PRIORITY 1301
INFO RUEHWH/WESTERN HEMISPHERIC AFFAIRS DIPL POSTS
RUCPDOC/USDOC WASHDC
RUMIAAA/USCINCSO MIAMI FL
RUCNDT/USMISSION USUN NEW YORK 0120
RHEHNSC/NSC WASHINGTON DC

UNCLAS SAN SALVADOR 000604 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ETRD PREL PGOV ECON HO ES
SUBJECT: EL SALVADOR IMPOSES "COMMERCIAL EMBARGO" ON HONDURAS 
 
¶1. (SBU) SUMMARY.  The Government of El Salvador (GOES) instituted a 
"commercial embargo" on Honduras and closed the border to trade the 
evening of June 29.  The border remains open to non-commercial 
traffic.  The initial embargo is expected to last 48 hours, but 
could be extended if the situation in Honduras does not "improve." 
The private sector in El Salvador has come out strongly against the 
measures, arguing that private companies in El Salvador should not 
be penalized for the actions of government institutions in Honduras. 
 Should the embargo continue beyond 48 hours, it is likely to 
adversely affect the economy of El Salvador.  END SUMMARY. 
 
¶2. (SBU) Amcham Executive Director Carmen Aida Munoz (protect) 
alerted Emboffs to the embargo the evening of June 29.  In an 
official declaration signed in Managua, the CA-4 Presidents (Costa 
Rica, El Salvador, Guatemala, and Nicaragua) agreed to suspend 
commerce with Honduras for 48 hours as "an initial measure." 
 
¶3. (SBU) Munoz expressed concern on behalf of Amcham member 
companies, many of whom bring in raw materials and export via Puerto 
Cortez in Honduras.  Munoz said that Hanes and Fruit of the Loom 
were the companies expected to be hit the hardest and, if the 
embargo lasted, might have to close their textile operations 
temporarily.  Munoz also identified La Constancia (owned by 
SABMiller) and Kimberly Clark as member firms directly affected by 
the border closing.  Amcham had been unable to reach any officials 
from the Ministry of Economy or the Technical Secretary (Chief of 
Staff) to the President to discuss the embargo. 
 
¶4. (SBU) On June 30, Munoz told A/Econcouns that Amcham had spoken 
with representatives from Maersk, who had confirmed the Salvadoran 
border closing.  Maersk had reported that Honduran officials had not 
taken any official actions on their side of the border, but traffic 
had been very slow since Sunday and there were many obstacles on 
Honduran roads. 
 
¶5. (SBU) Munoz also stated that Salvadoran Chamber of Commerce 
President Jorge Daboub had spoken with Minister of Economy Hector 
Dada on June 29.  Dada reportedly advised Daboub that the business 
sector should "get used to these measures" if the situation in 
Honduras did not improve. 
 
¶6. (U) An official of the Directorate of Migration informed Conoffs 
on June 30 that the land borders remained open to non-commercial 
traffic.  The official advised, however, that the borders were being 
closed at night due to the curfew in Honduras. 
 
¶7. (U) Under the auspices of the Salvadoran Private Enterprise 
Association (ANEP), the heads of various chambers and private sector 
associations, including Amcham and the Salvadoran Chamber of 
Commerce, spoke out against the embargo in a June 30 press 
conference.  The private sector argued that they should not be the 
ones penalized for the actions of government institutions in 
Honduras and urged diplomatic rather than economic pressure.  Daboub 
stated that the border closings represented a loss of $2.5 million 
per day and put 10,000 jobs at risk. 
 
¶8. (SBU) COMMENT: Should the GOES extend the embargo beyond 48 
hours, we expect the economy of El Salvador to suffer along with the 
economy of Honduras.  Since El Salvador lacks an Atlantic port, 
Salvadoran firms are heavily dependent on access to the ports in 
Guatemala and Honduras for their imports and exports.  El Salvador 
also enjoys a trade surplus with Honduras ($52.1 million through 
April 2009), and so would be the bigger loser on bilateral trade. 
END COMMENT. 
 
Blau