In a bid to enter new markets, Harper lands free-trade deal with Honduras

San Pedro Sula, Honduras — The Globe and Mail

Canada's Prime Minister Stephen Harper (L) walks with Honduras' President Porfirio Lobo as he arrives for an official visit, at the Armando Escalon military base in San Pedro Sula August 12, 2011. (REUTERS/Edgard Garrido/REUTERS/Edgard Garrido)

Canada has reached a deal on a free-trade agreement with Honduras, Stephen Harper announced Friday as he visited the country on the final stop of his Latin American trade mission.

The visit comes just as the country of 8.5 million is shedding its pariah status after a 2009 coup d’état that ousted the sitting president.

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Mr. Harper is the first major leader to visit Honduras since it was readmitted into the Organization of American states in June.

It remains, however, an extremely dangerous country. It has the highest crime rate in the world outside of a war zone and a big human rights problem, ranging from police brutality to treatment of union members.

The new free trade deal, however, is a trophy Mr. Harper is holding high as the fruits of his efforts to secure preferential access to new markets -- business that could diversify Canada’s trade away from the ailing U.S. economy.

The Conservatives believe Canada can help improve Honduras by trading and dealing with it rather than pulling back.

Two-way trade with Honduras is a paltry $190-million annually today but Canadians still wield significant influence in Honduras.

Montreal-based Gildan Activewear, a clothing maker, is currently the largest private sector employer in Honduras with 18,000 full time employees.

It has come under attack from labour groups that accuse it of running sweatshops. One Honduras activist group called on Mr. Harper to monitor Gildan’s business practices in Honduras.

Mindful of critics -- including opponents of Canadian mining practices in the region -- the Harper government promises the FTA will be accompanied by “strong parallel agreements” on labour practices and environmental protection.

The Canadian-Honduras free-trade deal must still be ratified by both countries before it can be signed and become legally binding. In Canada that means it must be passed by MPs and Senators. The Conservatives control both chambers in Canada so Ottawa’s approval is not in question.

The Harper government declined to release a copy of what Canada and Honduras agreed to, saying Members of Parliament will get a chance to see the deal before they vote on it.

Mr. Harper landed in the northern Honduras city of San Pedro Sula Friday for a brief visit with president Porfirio Lobo.

“I congratulate you upon your readmission to the Organization of American States,” Mr. Harper told Mr. Lobo in a joint appearance.

“It is a hard-won accomplishment under difficult circumstances and bodes well for this country’s future.”

He also attended a roundtable discussion with Canadian businesses operating in Honduras.

A U.S. diplomatic cable released last month by WikiLeaks suggests Mr. Harper’s desire to build sway in the Americas is also a bid to gain influence in Washington. The 2009 cable quoted a Canadian Foreign Affairs official who said Mr. Harper was emulating former Australian prime minister John Howard by increasing clout in a region that really mattered to the United States.

Mr. Harper’s efforts to wield influence in Latin America include his decision to negotiate a free trade deal with Honduras as it struggled to recover 2009 coup d’état.

Regional experts say the prime minister’s decision to accelerate free trade talks starting in late 2010 stem from his decision to get behind Honduras as it rebuilds its democracy.

In June 2009 Honduran President Manuel Zelaya was ousted by the Honduran military. The Organization of American States later suspended Honduras’s membership -- a decision it only reversed in June when members voted to re-admit the Central American nation.

Canada suspended government relations with Honduras between June 2009 and January of 2010, recognizing the fall 2009 elections that brought Mr. Lobo to power.

It has also given expertise to an independent Truth and Reconciliation Commission trying to investigate the events leading up to the 2009 coup. Former Canadian diplomat Michael Kergin was appointed one of the members of the commission.

Regional experts say Mr. Harper is trying to lend international support for the country’s journey back to democracy.

Activists are calling on Mr. Harper to pay closer attention the conduct of Gildan Activewear.

Codemuh, a Honduran group, is questioning Gildan’s corporate behaviour and treatment of its workers. In a letter to the prime minister this week it asked him to commission a report on the conduct of Gildan Activewear.