U.S. Relations With Honduras
Bureau of Western Hemisphere Affairs
Fact Sheet
June 19, 2012
Honduras has traditionally been an ally of the United States. Following Honduras' June 2009 coup and U.S. recognition of the November 2009 presidential election, U.S. policy has sought to consolidate democracy, protect human rights, and promote 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 and 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 the bilateral agenda. An average of 80,000 to 110,000 U.S. citizens visit Honduras annually, and about 15,000 Americans reside there.
U.S. Assistance to Honduras
Honduras, one of Latin America's poorest nations, strives to improve its economic and democratic development with U.S. assistance. The United States has historically been the largest bilateral donor to Honduras. U.S. Agency for International Development (USAID) programs include education, health, economic policy, microenterprise, environmental conservation, food security, municipal development, and justice sector reform.
The United States maintains a small presence at a Honduran military base. U.S. forces 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. Through the Central America Regional Security Initiative, the United States supports the Government of Honduras by assisting law enforcement entities in disrupting criminal networks; building investigative, prosecutorial, and judicial capacity; and implementing violence prevention programs for vulnerable communities.
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 invested $205 million over 5 years to help Honduras improve its road infrastructure, diversify its agriculture, and transport its products to market.
Bilateral Economic Relations
The U.S. is the chief trading partner for Honduras, supplying 34% of Honduran imports and purchasing 41% of Honduran exports in 2010. Bilateral trade between the two nations totaled $8.3 billion in 2010. U.S. exports to Honduras in 2010 totaled $4.6 billion. More than 200 U.S. companies operate in Honduras.
The U.S.-Central America Free Trade Agreement (DR-CAFTA) entered into force in 2006. It 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 also aims to eliminate intra-Central American tariffs and facilitate increased regional trade, benefiting U.S. companies manufacturing in Honduras. With CAFTA implemented, about 80% of U.S. goods now enter the region duty-free, with tariffs on the remaining 20% to be phased out by 2016.
Leading U.S. exports in 2009 included: textile yarn and fabric, petroleum and petroleum products, cereals and cereal preparations, low-value shipments, and apparel. Nearly all textile and apparel goods that meet CAFTA’s rules of origin became duty-free and quota-free immediately, thus promoting new opportunities for U.S. fiber, yarn, fabric, and apparel manufacturers. Honduras is the seventh-largest exporter of apparel and textile products by volume to the U.S. market behind countries such as Mexico and China; Honduras is first among Central American and Caribbean countries.
The stock of U.S. foreign direct investment in Honduras rose 7.2% between 2008 and 2009, from $787 million to $844 million. This was concentrated largely in the manufacturing, finance, insurance, and banking sectors of the country.
Honduras' Membership in International Organizations
Honduras generally supports U.S. initiatives in international fora. Honduras and the United States belong to a number of the same international organizations, including the United Nations, Organization of American States, World Trade Organization, and International Monetary Fund.
