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Viewing cable 07MANAGUA197, NICARAGUA LETTER TO USTR SCHWAB AND SECRETARY OF

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Reference ID Created Released Classification Origin
07MANAGUA197 2007-01-24 20:22 2011-06-21 08:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Managua
VZCZCXYZ0015
RR RUEHWEB

DE RUEHMU #0197 0242022
ZNR UUUUU ZZH
R 242022Z JAN 07
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC 8753
INFO RUEHSJ/AMEMBASSY SAN JOSE 4881
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
UNCLAS MANAGUA 000197 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR WHA/CEN, EB/TPP 
DEPT PASS TO USTR 
USDA/FAS/OCRA/WHA/CMARSTON 
USDA/FAS/ONA/MED/LCOONROD 
 
E.O. 12958: N/A 
TAGS: ETRD EAGR FAS WTO NU
SUBJECT: NICARAGUA LETTER TO USTR SCHWAB AND SECRETARY OF 
AGRICULTURE ON U.S. PEANUT SUBSIDIES 
 
1. (U) On January 18, 2007 the Embassy received an original 
letter in English dated December 12 and addressed to U.S. 
Trade Representative Susan Schwab and to Secretary of 
Agriculture Mike Johannes from the Minister of Development, 
Industry, and Trade Alejandro Arguello and Minister of 
Agriculture Mario Salvo. Post contacted both ministries to 
confirm that the letter, penned before the Ortega 
Administration took office on January 10 2007, reflected the 
current government's position.  New ministers have since been 
appointed.  Director for External Commerce at the Ministry of 
Development, Industry, and Trade Sonia Somarriba confirmed to 
us that it did, and further informed us that on January 22 
Nicaragua formally joined Canada's WTO request for 
consultations on U.S. subsidies and domestic support for corn 
and other agricultural products. 
 
2.  (SBU) The original letter, the text of which follows, 
will be forwarded to WHA/CEN via Diplomatic Pouch registered 
under 5531166. 
 
Begin text. 
 
The Honorable 
Susan Schwab 
United States Trade Representative 
600 17th Street, N.W. 
Washington, DC 20508 
 
The Honorable 
Mike Johannes 
Secretary of Agriculture 
United States Department of Agriculture 
1400 Independence Avenue, S.W. 
Washington, DC 20250 
 
Dear Ambassador Schwab and Secretary Johannes: 
 
As you know, one of Nicaragua's principal objectives in the 
Doha Development Round has been to achieve substantial 
reductions in agricultural export subsidies and domestic 
supports.  Given the Round's uncertain outlook at this 
juncture, and the upcoming efforts in the United States to 
reauthorize U.S. Farm Bill subsidy programs, we are writing 
to express Nicaragua's growing concern over U.S. peanut 
subsidy payments, which are threatening the future viability 
of Nicaragua's peanut industry. 
 
Peanuts are Nicaragua's leading agricultural export after 
coffee, and a vital source of employment for many thousands 
of Nicaraguan producers and allied workers in the rural areas 
of the country.  The health of the sector is of utmost 
importance to our country's continued economic development. 
 
We are concerned; therefore, that U.S. peanut marketing 
assistance loan payments, direct payments, and 
counter-cyclical payments are severely eroding the Nicaraguan 
industry's export sales and profitability.  Those subsidies 
are distorting the U.S. and global marketplace, and 
drastically disrupting the historical competitive 
relationship between the U.S. and Nicaraguan peanut 
industries. 
 
Nicaragua is eager to begin a dialogue with the U.S. 
government on reasonable reforms that would help safeguard 
the trading and economic interests of all concerned.  With so 
much at stake in this sector, we look forward to receiving 
your initial views on this matter and to working 
constructively on program reforms that would help sustain a 
sound global peanut market. 
 
Please accept the assurances of our highest regard. 
 
(Signed) Alejandro Arguello Ch. 
Minister of Development, Industry and Trade 
 
(Signed) Mario Salvo H. 
Minister of Agriculture 
 
End text. 
TRIVELLI