FOREIGN
RELATIONS
Honduras is a member of the United Nations, the World Trade Organization (WTO), the Organization of American States (OAS--membership suspended July 2009 as a result of the June 28 coup), the Central American Parliament (PARLACEN), the Central American Integration System (SICA), the Conference of Central American Armed Forces (CFAC), and the Central American Security Commission (CASC). Honduras is also a signatory to the Rio Pact and a member of the Central American Defense Council (CONDECA). During 1995-96, Honduras--a founding member of the United Nations--served as a nonpermanent member of the UN Security Council for the first time. Honduras is a party to all UN and OAS counterterrorism conventions and protocols.
Honduras is a strong proponent of Central American cooperation and integration, and before the June 2009 coup was working toward the implementation of a regional customs union and Central American passport, which would ease border controls and tariffs among Honduras, Guatemala, Nicaragua, and El Salvador.
In 1969, El Salvador and Honduras fought the brief "Soccer War" over disputed border areas. The two countries formally signed a peace treaty in 1980, which put the border dispute before the International Court of Justice (ICJ). In 1992, the Court awarded most of the disputed territory to Honduras, and in January 1998, Honduras and El Salvador signed a border demarcation treaty to implement the terms of the ICJ decree although delays continue due to technical difficulties. However, Honduras and El Salvador maintain normal diplomatic and trade relations. Honduras also has unresolved maritime border disputes with El Salvador, Jamaica, and Cuba.
U.S.-HONDURAN
RELATIONS
Overview
Honduras in the areas of counternarcotics and counterterrorism before June 2009, but because the de facto regime is not recognized as the legitimate government, these activities have been suspended. Honduras was among the first countries to sign an International Criminal Court (ICC) Article 98 Agreement with the U.S., and the Honduran port of Puerto Cortes is part of the U.S. Container Security Initiative (CSI). Honduras was also the first Central American country to sign a letter of agreement (LOA) to implement the Merida Initiative.
During the 1980s, Honduras supported U.S. policy opposing a revolutionary Marxist government in Nicaragua and an active leftist insurgency in El Salvador. The Honduran Government also played a key role in negotiations that culminated in the 1990 Nicaraguan elections. Honduras continues to participate in the UN observer mission in the Western Sahara, contributed 370 troops for stabilization in Iraq, and remains interested in participating in other UN peacekeeping missions.
In 2004, the United States signed the U.S.-Central America Free Trade Agreement (CAFTA) with Honduras, El Salvador, Nicaragua, Guatemala, Costa Rica, and the Dominican Republic. The legislatures of all signatories except Costa Rica ratified CAFTA in 2005, and the agreement entered into force in the first half of 2006. CAFTA eliminates tariffs and other barriers to trade in goods, services, agricultural products, and investments. Additionally, CAFTA is expected to solidify democracy, encourage greater regional integration, and provide safeguards for environmental protection and labor rights. The United States is Honduras' chief trading partner and the largest investor in Honduras.
The United States maintains a small presence at a Honduran military base; until suspension as result of the June 2009 coup, the two countries conducted joint peacekeeping, counternarcotics, humanitarian, disaster relief, and civic action exercises. U.S. troops conduct and provide logistics support for a variety of bilateral and multilateral exercises--medical, engineering, peacekeeping, counternarcotics, and disaster relief--for the benefit of the Honduran people and their Central American neighbors. U.S. forces--regular, reserve, and National Guard--benefit greatly from these exercises and continue to conduct these activities regionally despite suspension of cooperation with the de facto Honduran regime or Honduran armed forces.
NATIONAL SECURITY
With the cessation of the 1980s civil wars in El Salvador and Nicaragua, the
Honduran armed forces refocused their orientation toward combating transnational
threats such as narcoterrorism and organized crime. Honduras supports efforts at
regional integration and deployed troops to Iraq in support of Operation Iraqi
Freedom. In 1999, the constitution was amended to abolish the position of
military commander in chief of the armed forces, thus codifying civilian
authority over the military.
U.S.
Policy Toward Honduras
U.S. policy toward Honduras is aimed at consolidating democracy, protecting human rights, and promoting the rule of law. U.S. Government programs are aimed at promoting a healthy and more open economy capable of sustainable growth, improving the climate for business and investment while protecting U.S. citizen and corporate rights, and promoting the well-being of the Honduran people. The United States also works with Honduras to meet transnational challenges--including the fight against terrorism, narcotics trafficking, money laundering, illegal migration, and trafficking in persons--and encourages and supports Honduran efforts to protect the environment. The goals of strengthening democracy and promoting viable economic growth are especially important given the geographical proximity of Honduras to the United States. An estimated 1 million Hondurans reside in the United States, 600,000 of whom are believed to be undocumented; consequently, immigration issues are an important item on our bilateral agenda.
U.S.-Honduran ties are further strengthened by numerous private sector contacts, with an average of between 80,000 and 110,000 U.S. citizens visiting Honduras annually and about 15,000 Americans residing there. More than 150 American companies operate in Honduras.
Economic
and Development Assistance
In order to help strengthen Honduras' democratic institutions and improve living conditions, the United States has provided substantial economic assistance. The United States has historically been the largest bilateral donor to Honduras. The USAID budget for Honduras was $38.7 million for fiscal year 2008. Over the years, U.S. foreign assistance has helped advance such objectives as fostering democratic institutions, improving education and the health status of the population, increasing private sector employment and income, helping Honduras manage its arrears with international financial institutions, providing humanitarian aid, increasing agricultural production, and providing loans to microbusinesses. Many of USAID’s programs have been suspended due to the June 2009 coup.
1998's Hurricane Mitch left hundreds of thousands homeless, devastated the road network and other public infrastructure, and crippled certain key sectors of the economy. Estimates show that Hurricane Mitch caused $8.5 billion in damages to homes, hospitals, schools, roads, farms, and businesses throughout Central America, including more than $3 billion in Honduras alone. In response, the United States provided more than $461 million in immediate disaster relief and humanitarian aid spread over the years 1998-2001. This supplemental assistance was designed to help repair water and sanitation systems; replace housing, schools, and roads; provide agricultural inputs; provide local government crisis management training; grant debt relief; and encourage environmental management expertise. Additional resources were utilized to maintain anti-crime and drug assistance programs.
In June 2005, Honduras became the first country in the hemisphere to sign a Millennium Challenge Account (MCA) compact with the U.S. Government. Under the compact, the U.S. Millennium Challenge Corporation was to invest $215 million over 5 years to help Honduras improve its road infrastructure, diversify its agriculture, and get its products to market. Honduras failed the corruption indicator required for continued funding into 2008. MCC planned to closely follow Honduras's progress on reducing corruption under an approved "remediation plan." Following the June 2009 coup, most of the uncommitted compact funding has been terminated; most funds had been committed before the coup.
The Peace Corps has been active in Honduras since 1962, and currently the program is one of the largest in the world. In 2009, there were approximately 180 Peace Corps Volunteers working in the poorest parts of Honduras. Volunteers work in six project areas including: HIV/AIDS Prevention and Child Survival, Youth Development, Protected Areas Management, Business, Water and Sanitation, and Municipal Development.
The U.S. Government strongly supports the professionalization of the civilian police force as an important element in strengthening the rule of law in Honduras. The American Embassy in Tegucigalpa provides specialized training to police officers.
Security Assistance
The role of the Honduran armed forces has changed significantly in recent years as many institutions formerly controlled by the military are now under civilian authority. The annual defense and police budgets are approximately $75 million with very moderate increases in the past few years. Prior to the June 28, 2009 political crisis, Honduras received modest U.S. security assistance funds and training. Since June 28, there has been no official U.S.-Honduran military interaction.
Historically, with the absence of a large security assistance program, defense cooperation has taken the form of increased participation by the Honduran armed forces in military-to-military contact programs and bilateral and multilateral combined exercises oriented toward peacekeeping, disaster relief, humanitarian/civic assistance, and counternarcotics. The U.S. Joint Task Force Bravo (JTF-B), stationed at the Honduran Soto Cano Air Base, plays a vital role in supporting combined exercises in Honduras and in neighboring Central American countries. JTF-Bravo plays a critical role in helping the United States respond to natural disasters in Central America by serving as a platform for rescue missions, repairing critical infrastructure, and in meeting high priority health and sanitation needs. JTF-Bravo forces have helped deliver millions of dollars worth of privately donated goods to those in need. JTF-Bravo also provides logistical support to interagency partners in the region that combat illegal trafficking activities.
U.S. Business Opportunities
The U.S. is the chief trading partner for Honduras, supplying 52% of Honduran imports and purchasing approximately two-thirds of Honduran exports. Bilateral trade between the two nations totaled $8.9 billion in 2008, up from $8.3 billion in 2007. Exports of goods and services from the U.S. increased from $4.4 billion in 2007 to $4.8 billion in 2008, while Honduran exports to the U.S. also increased slightly from $3.9 billion in 2007 to $4.1 billion in 2008. More than 150 American companies are currently operating in Honduras.
U.S. exporters enjoy an enviable position in the Honduran market, and saw this position improve after the 2006 implementation of the Central American Free Trade Agreement (CAFTA-DR). CAFTA-DR eliminates most tariffs and other barriers for U.S. goods destined for the Central American market, provides protection for U.S. investments and intellectual property, and creates more transparent rules and procedures for conducting business. CAFTA-DR also aims to eliminate intra-Central American tariffs and facilitate increased regional trade, benefiting U.S. companies manufacturing in Honduras. With CAFTA-DR implemented, about 80% of U.S. goods now enter the region duty-free, with tariffs on the remaining 20% to be phased out within 10 years.
Opportunities for U.S. exporters are extensive. Among the best-prospect sectors are automotive parts and transportation equipment, electrical machinery, franchising, food processing and packaging equipment, general consumer goods, paper and paperboard, printing and graphic arts equipment, processed foods, safety and security equipment, and travel and tourism services. Best prospects for agricultural products include coarse grains, rice, wheat, soybean meal, red meats, and processed fruits and vegetables. Nearly all textile and apparel goods that meet the agreement’s rules of origin became duty-free and quota-free immediately, thus promoting new opportunities for U.S. fiber, yarn, fabric, and apparel manufacturers.
The total value of U.S. investments in Honduras on a historical cost basis at the end of 2008 was $700 million, according to the U.S. Department of Commerce. The United States continued to be the largest investor in Honduras in 2008, accounting for $397.9 million, or 45.4%, of the total inflow. Sectors receiving the highest amounts of foreign direct investment (FDI) in 2008 were telecommunications, financial services, and the paper and paperboard industry. Overall, Honduras registered a 5.6% decrease in its total foreign direct investment flows in 2008.
U.S. citizens contemplating investment in real estate in Honduras should proceed with extreme caution, especially in the Bay Islands or coastal areas, because of frequently conflicting legislation, problems with land titles, and a weak judicial system. Investors or their attorneys should check property titles not only with the property registry office having jurisdiction in the area in which the property is located (being especially observant of marginal annotations on the deed and that the property is located within the area covered by the original title), but also with the National Agrarian Institute (INA) and the National Forestry Administration (COHDEFOR). Investors in land should be aware that even clear title is not a guarantee that a future dispute over land would be resolved equitably.
Principal U.S. Embassy Officials
Ambassador--Hugo Llorens
Deputy Chief of Mission--Simon Henshaw
Political Counselor--Andrea Brouillette-Rodriguez
Economic Counselor--Robert Armstrong
Consul General--Douglas Benning
The U.S. Embassy in Honduras is located on Avenida La Paz, Tegucigalpa (tel.: 011-504-236-9320; faxes: general--011-504-236-9037, USAID--011-504-236-7776, Consulate--011-504-237-1792). Internet: http://honduras.usembassy.gov/english/index_e1.htm
