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Widgets Magazine

id: 43241
date: 10/20/2005 22:57
refid: 05SANSALVADOR2875
origin: Embassy San Salvador
destination: 05SANSALVADOR2818
This record is a partial extract of the original cable. The full text of the original cable is not available.


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E.O. 12958: N/A
     B. SAN SALVADOR 2787
     C. SAN SALVADOR 108
1. (SBU)  Summary: Secretary of Commerce Carlos Gutierrez
began his October 20-21 visit to El Salvador with a friendly
but businesslike meeting with President Elias Antonio
("Tony") Saca.  Saca reaffirmed El Salvador's commitment to
CAFTA and to its relationship with the United States,
thanking President Bush for his attention to El Salvador.  He
also stressed the importance of the CAFTA-DR agreement in
pushing back against growing populism in the region, in
particular that led by Venezuelan President Hugo Chavez.
Saca commented on problems and progress in Central American
integration and stability.  Ambassador Rene Leon, in the
meeting, renewed El Salvador's request to bring a U.S.
Customs presence to El Salvador to improve its
competitiveness in the region.  End Summary.
2.  (U)  Secretary of Commerce Carlos Gutierrez began his
October 20-21 visit to El Salvador with an hour-long meeting
with President Elias Antonio ("Tony") Saca.  Participants
Secretary of Commerce Carlos Gutierrez
Ambassador H. Douglas Barclay
Claire Buchan, Secretary's Chief of Staff
Israel Hernandez, A/S and Director General, Commercial Service
Walter Bastian, DAS Western Hemisphere
Regional FCS Director Daniel Thompson
Economic Counselor Jessica Webster (notetaker)
President Elias Antonio (Tony) Saca
Foreign Minister Francisco Lainez
Minister of Economy Yolanda de Gavidia
Ambassador to the U.S. Rene Leon
Private Secretary Elmer Charlaix
Technical Secretary Eduardo Zablah
Vice Minister of Economy Eduardo Ayala Grimaldi
Vice Minister of Economy Blanca Imelda Jaco de Magana
3. (U)  The meeting was friendly but businesslike, covering
CAFTA and regional political issues.  Both the Secretary and
President Saca emphasized the value of the U.S.-Salvadoran
relationship.  Secretary Gutierrez thanked the President for
El Salvador's firm and steady support of the U.S., in public
and in private, citing in particular El Salvador's
participation in Iraq and Saca's leadership in securing
Salvadoran and U.S. Congressional approval of CAFTA.
President Saca thanked Secretary Gutierrez for his own work
to get CAFTA approved.
4.  (U)  President Saca reiterated El Salvador's commitment
to the CAFTA-DR agreement.  He expressed his confidence that
CAFTA could be implemented in January 2006 and told the
Secretary that El Salvador had already made most of the
changes necessary to comply with the terms of the accord,
noting that the GOES expected to secure legislative approval
for reforms to its intellectual property rights law in
November.  He noted that El Salvador was meeting its CAFTA
implementation obligations, but invited the Secretary to send
the necessary message to other Presidents in the follow-on
meeting about the importance of meeting CAFTA commitments.
5.  (U) Saca focused his comments on CAFTA-DR on the
political message of the Secretary's meeting with Central
American Presidents.  He said the meeting should show the
United States' political support for the region, as a
neighbor, especially in the face of the challenge from China.
 The message should be how CAFTA widened the free trade area:
 CAFTA was "half of the FTAA," he said, stressing the
importance of entry into force on January 1, 2006 with all
seven signatory countries.  Saca said he believed that Costa
Rica would find a way to ratify the agreement soon, but
conceded that entry into force on January 1 even without
Costa Rica was important to send the right political signal.
6.  (SBU)   Without CAFTA, Saca said, the outlook for the
region would be difficult.  He was very concerned with the
trend in Latin America toward populist policies, a trend
which he viewed as growing steadily stronger, and called
CAFTA a triumph in that context.  Saca said that Central
America had gotten over populist movements, and he claimed
that Central American presidents were like-minded in their
philosophy.  Still, there would be elections in 18 countries
over the next 14 months and U.S. support was important to
support democratic outcomes.  Saca acknowledged frankly that
El Salvador was in the United State's zone of influence and
that the two countries needed to focus on strengthening that
economic relationship, even though other potential trade
partners were courting Central America and the United States.
7.  (SBU)  Saca explained that there were historical and
continuing reasons (including the large Salvadoran population
in the United States) for El Salvador's enduring, strong
affinity for the United States.  Saca said El Salvador lost
little in identifying itself with the United States, adding
that his ARENA party had won the election on a platform of
free trade and with soldiers in Iraq.  Saca predicted that
the outcome of the upcoming March 2006 legislative and
municipal elections would be similar to the 2004 Presidential
elections in which voting was strong and the majority of
votes were cast for ARENA; the election would result in a
more favorable Assembly composition for the government, which
would allow the GOES to implement important programs.  Saca
said that educating the U.S. Congress about CAFTA had been
his role; recalling that some CAFTA opponents in Congress had
told him that their Hispanic constituencies were against
CAFTA, Saca countered that these voters did not represent
Salvadorans, who wanted the GOES to be a friend of the United
States.  Saca thanked President Bush for being attentive to
the relationship with El Salvador.
8.  (U)  The President commented that the GOES would announce
within days the establishment of a Code of Ethics for
government employees, drawing on the draft law that USAID had
helped the GOES prepare, to send a message about its
commitment to transparency.  Saca linked this to El
Salvador's efforts to secure a compact with the Millennium
Challenge Corporation. Technical Secretary Eduardo Zablah
explained that the Code of Ethics would be implemented under
Executive authority by the end of October, with the purpose
of preventing instances of corruption, especially in
government procurement.
9.  (SBU)  Saca called Venezuela's Chavez a "headache for
Latin America," but also said that Chavez was the most
important issue for the region.  Asked if Chavez was
pressuring El Salvador, Saca said he had no doubt that Chavez
supported the FMLN but claimed that Chavez had made no
inroads in El Salvador.  Commenting on a recent incident in
with the GOES refused entry of Venezuelan nationals who
arrived on a flight carrying relief supplies, Saca said that
the 30 people who were turned back were not relief workers
but activists seeking to generate support for Chavez and, by
extension, those who thought just like Chavez in Cuba and
10. (SBU) Saca commented that high world oil prices allowed
Chavez to position himself as the "good guy"; without high
oil prices, Chavez would not have the forum.  Asked about
Mexico, he added that Mexico should orient its petroleum
policy more toward Latin America.  Even though, in the end,
Chavez' promises to sell oil more cheaply might not result in
benefits for consumers, they generated expectations that
Chavez used to his advantage.  Mexico could help counter
those expectations.  Foreign Minister Lainez said that
Foreign Ministers from the region would meet in Mexico on
October 31 to discuss the possibility of developing PEMEX
incentives for Central America.
11.  (SBU)  Saca expressed concern about political conditions
in Nicaragua and the strength of Aleman's PLC and Ortega's
FSLN parties.  He suggested that an agreement brokered to
freeze reforms until 2007 provided some breathing room, but
admitted that he did not have a clear vision of how the
political crisis would work itself out.
12.  (SBU)  Saca said it would be a good sign if the people
of Iraq approved the draft Constitution put to a vote last
weekend.  He said that El Salvador had taken a large number
of risks in Iraq and he called this the hardest theme of his
13.  (U)   The Secretary asked about progress in harmonizing
border crossing issues with neighboring countries, noting
that consistency in customs administration was part of CAFTA.
 Saca said the region had advanced in integration and El
Salvador had simplified border crossing procedures with
Guatemala.  Minister de Gavidia explained that El Salvador
was working out an issue with Nicaragua over entry for
foreign trucking.  (Comment:  Statements in the press
conference following the meeting of Central American
Presidents indicated that this issue was generally resolved,
and President Bolanos' intervention was praised.)  She
informed the Secretary that Central America was considering
the adoption of a protocol on key customs and border issues.
14.  (U)  Ambassador Rene Leon asked for the Secretary's help
in getting El Salvador into the Customs and Border Patrol's
Container Security Initiative (CSI), raising an issue that
Saca first proposed to USTR Zoellick a year ago (ref c).
Leon said that to take advantage of CAFTA and give it an edge
in commerce, El Salvador needed CSI.  Leon asked for a pilot
project at the existing Port of Acajutla to prepare for later
introduction of CSI at the Port of La Union, where
construction began several months ago.  De Gavidia and
President Saca stressed the value of CSI in exploiting the
transportation linkages between the future La Union port and
ports in Guatemala and Honduras. De Gavidia acknowledged that
El Salvador did not have the volume of trade to justify CSI
but stated that El Salvador wanted parity with Honduras on
the issue.  Secretary Gutierrez agreed to follow up.
15.  (U)  This cable was cleared by the delegation.

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