Canadian Geopolitics in Post-Coup Honduras

Introduction

On 28 June 2009 moderately left-of-centre Honduran president, ¹ Manuel ‘Mel’ Zelaya, was overthrown in the second successful coup d’état in the Western hemisphere since Alberto Fujimori’s auto-golpe, or self-orchestrated coup, in Peru in 1992. ² Honduras became a political flashpoint in the region. A military-backed dictatorship took power. The Frente Nacional de la Resistencia Popular (National Front of Popular Resistance – FNRP) emerged to mobilize against the coup. Counter-repression from the state escalated. The entire scenario drew Honduran politics back, in some ways, to the darkest days of the dirty wars that beset the country, and many of its Central American neighbours, in the 1980s (Benítez Manaut and Diamint, 2010; Cálix, 2010; Rojas Bolaños, 2010; Salomón, 2009a; Salomón, 2009b; Torres-Rivas, 2010). Most countries in the Americas were quick to condemn the coup. The Organization of American States (OAS) voted to suspend Honduras’s membership.

Because the USA is the most powerful country in the world, with a long history of covert and overt intervention in Latin America, most critical scholarship on the international dynamics of the Honduran coup has cast its attention in that direction, searching for evidence of US involvement (Frank, 2010; Grandin, 2009a; Grandin, 2009b; Grandin, 2009c). This literature has produced important initial results thus far, and US involvement in the coup is an area deserving of much further analysis. However, the USA did not act alone. In fact, Canada was one of the most active countries intervening politically in Honduras following the coup, and its interest in finding a favorable resolution to the instability in Honduras has not been benignly humanitarian. Canada’s intervention has been marked, instead, by the bold promotion of the interests of Canadian capital operating in Honduras, as part of a wider geopolitical concern of the Canadian state to reproduce a political environment in Latin America amenable to the interests of Canadian investors. While Canada does not enjoy the political or economic weight of the USA within the international system of states, this should not be taken to mean that Canada is incapable of employing its wealth and power as a country of the capitalist core to exert influence in poorer countries of the periphery where and when its political and economic interests are at stake.

In spite of its many insights, recent critical scholarship on geopolitics and global political economy (Arrighi, 2007; Callinicos, 2009; Harvey, 2003; Kiely, 2010; Panitch and Gindin, 2003, 2004; Robinson, 2004; Wood, 2003), pays scant attention to the dynamics of sub-superpower imperialist countries such as Canada (Gordon, 2010a: 10). This is one lacuna we hope to fill in the present article. Debate on US hegemony, ultra-imperialism, transnational capitalist class formation and potential signals of renewed inter-imperial rivalry between great powers, however important, do not exhaust the field of inquiry into asymmetrical power relations in the geopolitics of the world system today. They leave out of the equation the role played in global capitalism by core nations such as Canada, Western European countries, and Australia. While these countries, considerably smaller and less influential than the USA, clearly do not lead the imperialist political-economic order, they nevertheless are imperialist in their own right and benefit from this order and actively support it. Canadian capital (as well as French, Australian, and so on) has its own objective interests in the global South, and their respective states act to advance these through diplomatic, economic and security policy, at times in concert with, and at times independently of, the USA. ³

Mainstream scholarship in Canadian political economy and foreign policy, meanwhile, also tends to downplay or ignore the global spread of Canadian capital and the increasingly aggressive positioning of Canada within the international hierarchy of nations (Clarkson, 2002; Cooper, 1997; Hart, 2008; Laxer, 2008; McQuaig, 2007). ⁴ This is true despite the fact that Canada is consistently one of the largest foreign investor nations in the world in absolute terms (that is, not controlling for size of economy); moreover, if we control for the size of its economy, available figures reveal that Canada has one of the largest investor orientations among the G8 states toward countries of the global South. Canadian capital has extensive interests in all major regions of the world, though Latin America and the Caribbean receive the highest concentration of Canadian foreign investment in the global South. From 2006 to 2011, for instance, Canada was tied with Spain as the second largest foreign investor in Latin America and the Caribbean, accounting for 9 percent of total FDI in the region (Economic Commission for Latin America and the Caribbean, 2012: 38). Canadian capital’s dominant role in mining is perhaps the most controversial Canadian economic presence in areas like sub-Saharan Africa and Latin America, but its reach extends well beyond merely extractive industries (Gordon, 2010a: 173–176).

Accompanying the global expansion of Canadian capital has been an increasingly aggressive foreign policy under the helm of both Liberal and Conservative parties in recent decades. The Canadian military – a recipient of significant spending increases over the last 10 years, with similar increases projected for the next 20 years despite a general domestic policy framework of austerity (Robinson, 2011) – has recently participated in the occupation of Afghanistan and the war in Libya, and intervened in Haiti during and following the 2004 coup against Jean-Bertrand Aristide. Similarly, the Canadian government failed to condemn the ‘parliamentary coup’ in Paraguay in 2012 (Gordon and Webber, 2012). This is a partial sketch of the wider context in which Canada’s political intervention in Honduras has been undertaken, and it helps to explain why it is important that we look beyond Canada’s initial pronouncement condemning the coup. The reality of the international expansion of Canadian capital and the aggressive foreign policy accompanying it stands in sharp contrast to the traditional view held in some segments of the Canadian and international public, and promoted by past governments, that Canada is a humanitarian nation and a model of progressive internationalism. This view took shape in the postwar years following Canada’s promotion of peacekeeping and multilateralism at the United Nations (associated with Canadian Minister of External Affairs and, eventually, Prime Minister, Lester Pearson). However, a number of observers have pointed out that Canada’s postwar foreign policy was always more complicated than this portrayal, as Canada – including in its peacekeeping role – was always closely aligned with American Cold War geopolitics, while the image of ‘Canada as the neutral middle power’ nation was useful cover for this Cold War alliance as well as the government’s support for Canadian companies doing business with dictatorships, such as Indonesia or Guatemala, to name only two (see, for example, McKay and Swift, 2012; Neufeld, 2010; Razack, 2004). In any case, the current Conservative government of Stephen Harper has itself prioritized challenging the peacekeeping mythology in favour of what McKay and Swift call the ‘Warrior Nation’.

A focused investigation into the political economy of Canada’s relationship to Honduras since 2009 helps us to better understand the importance of conceptualizing the role of middle-level imperialist countries within the international system, and thus opens up the possibility of a new research agenda within critical international political economy. Over the course of two research trips to Honduras in 2010 and 2011, more than two dozen interviews were conducted with leading Canadian diplomats, activists in the different currents of the FNRP, feminists, trade unionists, journalists, lawyers, judges, anti-mining activists, peasant leaders, representatives of the Garífuna movement and human rights advocates. This material, together with primary documentation solicited from the Canadian government through Access to Information requests, provides the basis for our analysis of the drivers and dynamics of Canadian political and economic diplomacy in post-coup Honduras.

The article begins by mapping Canadian investments in Honduras in order to establish the immediate material foundations informing the country’s policy vis-a-vis the post-coup regime. The focus then shifts to a narrative of the key events in the country leading to the coup, and Ottawa’s multifaceted geopolitical interventions thereafter. We offer a fine-grained account of Ottawa’s diplomatic efforts to undermine constitutional democracy in Honduras and lend support to the consolidation of the coup. Finally, through an investigation of the new bilateral Free Trade Agreement between Canada and Honduras, the article demonstrates how the acceleration of neoliberal economic policies under the post-coup regime has opened new vistas for Canadian capital.

The Expansion and Impact of Canadian Capital

Canadian capital has considerable influence in a number of Honduran industries, and this is likely to grow further over the next several years. Ambassador Cameron Mackay notes that by August 2011, Canada had over C$750m in investment in Honduras – a considerable jump from Statistics Canada’s pre-coup 2007 (the last year for which data is available before the coup) figure of $105m (La Tribuna, 2011). ⁵ According to Landa (interview, 2011) ⁶ Canadian mining companies, already the largest investors in that industry, have signalled they could spend between C$700 and C$1b over the next several years if a new law providing predictability and security for their investments is passed. Landa points out that the majority of the more than 160 licensed exploration concessions that are awaiting approval to proceed are owned by Canadian companies.

Montreal-based maquila company Gildan Activewear, the world’s largest sock manufacturer and one its largest t-shirt producers, is now Honduras’s biggest private sector employer. Early in February 2011 Gildan officials announced the company was closing its last North American factory in Alabama and that it would be investing more than US$100 million in a new sock factory in Honduras. Gildan currently has six production facilities in the country (just under half of its global total) (Gildan, undated).

However, the largest Canadian project currently under development in the country is owned by tourist magnate, Randy Jorgenson (founder of Canadian chain Adult Video), who is a close associate of post-coup president Porfirio Lobo’s brother and advisor, Ramón Lobo. The project, which will include a new US$15m cruise-ship dock to bring tourists from around the world, is being built through his company Life Visions near the north coast city of Trujillo (La Prensa, 2011a). On 8 June 2011 Jorgenson, Porfirio Lobo and representatives of Canadian Shield Assessment Management met in Trujillo, where they announced an investment – including some financing from East Asian capital – of potentially US$2b to build Honduras’s first ‘model city’ in Trujillo, of which the tourist project would be a key part (La Prensa, 2011b).

The growing influence of Canadian capital has not been embraced by Honduran workers, nor communities affected by the social and environmental costs of mining and tourism. Prior to the coup these groups were already organizing against Canadian companies, and the political context of post-coup Honduras has made the human rights and environmental situations more challenging for some Hondurans. For over a decade, people in the central Honduran communities in the Siria Valley have been engaged in a conflict with the major Canadian mining company Goldcorp over the company’s open pit operations at the San Martin mine. Activists with the Siria Valley Defense Committee (interview with Amador, Escober and Gamero, 2011) ⁷ blame Goldcorp for polluting the local water system and poisoning inhabitants of the Valley. They point to deforestation, the diversion of natural waterways, the construction of roads, the starving of small farmers of scarce water resources and a concomitant end to food security for the peasantry in the region. Goldcorp and the Honduran government deny that San Martin has harmed the environment or the people of the Valley. But scientific study of the water used for human consumption in two of the Valley communities found levels of arsenic, lead and hexavalent chromium well above the World Health Organization’s acceptable levels (Bianchini, 2006). The study also found high levels of lead and arsenic in the blood of 10 people tested in the communities. The Ministry of the Environment’s own study found that 46 of 62 people tested had ‘dangerously high levels of heavy metals poisoning in their blood that would have required immediate and sustained medical treatment back in 2007’ (Spring and Russell, 2011). Ongoing clinical studies by Tegucigalpa-based Dr. Juan Almendarez ‘have revealed serious skin and hair loss problems, respiratory tract, nervous system and eye problems – all of which can be attributed to contamination by heavy metals that are dangerous to the health of the present and future generations’ (Almendarez, 2011). And now in the post-coup context, Siria Defense Committee member, Roger Escober (interview with Amador, Escober and Gamero, 2011) adds, the mining industry is poised ‘to take our natural resources, forest, water, gold and everything else,’ and so ‘it is necessary to stay organized, resisting and fighting and denouncing’ its actions against communities and their environments.

According to Maria Luisa Regalado (interview with Regalado, 2011), ⁸ a member of the Colectiva de Mujeres Hondureñas (Honduran Women’s Collective – CODEMUH), an organization that works with women in the maquila sector, Gildan has one of the most problematic relations with its workers in the country’s garment sector, with a history of practices that violate workers’ rights. In 2004 Gildan allegedly shut down a factory in El Progreso to avoid its unionization (Gordon, 2010a: 251). Testifying before the Canadian Parliament’s Standing Committee on Foreign Affairs and International Development, Regalado (2011: 7) reports that, ‘The company is violating the labour code.’ Workers are supposed to work 44 hours a week, but they are ‘actually working up to 69 hours a week’, without air conditioning, and with only ‘15 minutes to eat, barely’. In an open letter to Stephen Harper during his visit to Honduras in August 2011 to sign a recently negotiated Free Trade Agreement with Canada – during which he toured a Gildan plant – CODEMUH (2011) charges that Gildan Activewear is violating the Constitution of the Honduran Republic and other labour laws by deploying ‘anti-organizing and anti-union policies’ and imposing ‘production goals or quotas [that] are the highest in the industry in Honduras’. ‘To earn $89.99 per week,’ it adds, ‘workers have to produce 550 dozen pieces every day, in awkward postures, executing up to 40,000 repetitive movements in their joints, tendons, and muscles per day. These conditions produce occupational musculoskeletal injuries.’ Regalado (interview, 2011) argues that these abuses worsened after the coup as the political terrain shifted sharply to the right. However, the workers continue to resist in whatever ways they can. ‘If there wasn’t any resistance,’ she adds, ‘things would be worse.’

The Life Visions project, meanwhile, involves the construction of homes to be sold off to prospective tourists on Garífuna land in an expanse of over 10,000 hectares known for its biodiversity (Paley, 2010). ⁹ A write-up on the project in Canadian Business (2011: 4) refers, without irony, to the project’s ‘bargain prices’ as an attraction for retirees that ‘colonize the shorelines of Central American and Caribbean countries’. Garífuna activist and member of the Organización Fraternal Negra Hondureña (Fraternal Organization of Black Hondurans – OFRANEH), Celso Alberto Guillén (interview, 2011) ¹⁰ argues that while Garífuna land rights have always been under threat in Honduras, in the 1990s ‘a process of land redistribution took place and the state made a commitment with these communities to provide them with land titles so they could have full ownership of their lands’ and in some cases, such as Guadalupe, land titles do exist. But under the Life Visions project land is being taken ‘without a prior consent of the community’. Garífuna activists such as Guillén see the fight against Life Visions as one more struggle to face in a long history of defiance: ‘The Garífunas have been resisting for more than 500 years against exclusion, xenophobia, marginalization, discrimination.’

The challenges facing Guillén and others in the Garífuna communities are potentially significant, given Life Visions’ resources, including Jorgenson’s apparent relations with the Lobo family. The environmental permits for the first two developments in the Life Vision project were granted in late January 2010, immediately after Lobo assumed power (Parra, 2010). Since President Lobo’s election Jorgenson has managed three meetings with him, the last of which resulted in the President’s pledge to support the project and guarantee commitment for building a road through the Garífuna communities to connect the tourist development with the nearby town of Trujillo (Life Vision, 2011).

Zelaya and the Coup

In the early hours of 28 June 2009, masked soldiers stormed Zelaya’s home, hauled him out of his house, and forced him into a Honduran air force jet destined for Costa Rica. Tanks barreled into the capital and soldiers surrounded the presidential palace, where the de facto regime, under the leadership of Roberto Micheletti, had been installed (Cano, 2009a, 2009b; Hernández Navarro, 2009; Rogers, 2009; Thomson, 2009). In addition to the suspension of basic civil liberties, such as freedom of the press and the right to assemble, ‘disproportionate use of force’, by the police and the military, ‘led to several deaths, scores of injuries, and thousands of arbitrary detentions’ (Human Rights Watch, 2012; see also Amnesty International, 2011: 163).

Zelaya, a wealthy ranch owner and business magnate in the logging industry, had assumed the presidential office in January 2006, as leader of the dissident Movimiento Esperanza Liberal (Liberal Hope Movement) current inside the traditional Liberal Party. His ascension to government took place roughly eight years into a significant social and political shift to the left across large parts of Latin America, and close to a decade into what has proven to be a prolonged legitimacy crisis of the neoliberal model (Katz, 2008; Levitsky and Roberts, 2011).

Once in the presidency, Zelaya made some modest moves toward progressive social and economic reform – free school enrolment, minimum wage increase, raises for teachers, initiatives to reduce rising fuel costs and the veto of legislation that would have made the sale of the morning-after pill illegal (EIU, 2008; Grandin, 2009a; Lemoine, 2009; Thomson, 2009). In the domain of natural resource extraction, Zelaya passed a new Forest Law with amplified environmental conditions on forest use, and introduced mining legislation for approval by Congress which outlined stricter environmental regulations, including the prohibition of open pit mines (EIU, 2008: 12). In spite of pressure from business groups and factions of his own party, the President also refused to privatize the state-owned electricity company, Empresa Nacional de Energía Eléctrica (ENEE) and the telecommunications firm, Hondutel (EIU, 2009). At the same time, Zelaya’s domestic policy never escaped the parameters of modest reforms to the existing neoliberal development orientation of Honduras (EIU, 2008: 10).

Honduras entered a steep economic downturn in 2008, associated with the spiraling global crisis, and particularly the deepening slump in the USA, Honduras’s main export market as well as source of tourists, remittances and foreign direct investment (FDI). It was in this context that Zelaya pragmatically opted for joining the Alianza Bolivariana para los Pueblos de Nuestra América (Bolivarian Alliance for the People of Our America – ALBA) in September of that year. As part of the deal, ‘Venezuela … offered to buy Honduran bonds worth $100m, whose proceeds will be spent on housing for the poor. Mr. Chávez has also offered a $30m credit line for farming, 100 tractors, and 4m low-energy light bulbs (Cuba will send technicians to help to install them, as well as more doctors and literacy teachers)’ (The Economist, 2008a, 2008b). According to the Honduran conservative opposition, the government’s embrace of ALBA was but the latest expression of Zelaya’s worrying geopolitical alignment with Chávez. Indeed, Chávez was regularly depicted in the media as a foreign meddler and provocateur, controlling from afar the Honduran president’s policy decisions and overarching political orientation. Despite being a caricature of the pragmatic trade relationship that had developed between Tegucigalpa and Caracas, such framing of the scenario by Zelaya’s opponents was intended to call into question the democratic credentials of the Honduran President by mere association with Chávez, given the latter’s ritual demonization in mainstream Honduran media (Grandin, 2006).

However, if the alignment with ALBA was one underlying cause of the overthrow of Zelaya, a dispute over a planned referendum was the spark that ultimately set the coup alight. According to the Honduran constitution, drafted in 1982 in the context of military dictatorship, presidents are elected for single, non-renewable terms of four years in duration. ‘The cause of Mr. Zelaya’s downfall,’ The Economist reported shortly after the coup, ‘was his attempt to emulate Mr. Chávez by organizing a referendum to call a constituent assembly. He seemed to hope that this would enable him to remain in power, perhaps by changing the constitution to allow him to stand for a second term in an election due in November’ (The Economist, 2009, emphasis added). This notion of a putative power grab, however, lacks any evidentiary basis (Cálix, 2010: 41). In actual fact, Zelaya proposed a referendum in June 2009 to ask Hondurans if there should be a vote regarding ‘whether to hold a Constituent National Assembly that [would] approve a new political Constitution’. Citizens, as Greg Grandin has pointed out:

weren’t being asked to vote on term limits or even on revising the Constitution. They were simply being asked to vote on whether or not to have a vote on revising the Constitution [in November 2009, at the same time as the presidential elections], with the terms of that revision being left to an elected assembly. (Grandin, 2009a)

Advocates of the standard account conceal the basic fact that if the June referendum had passed, ‘and if the November referendum had been held (which was not very likely) and also passed, the same ballot would have elected a new president and Zelaya would have stepped down in January’ 2010 (Weisbrot, 2009). Nonetheless, in the lead-up to the non-binding referendum to be held at the end of June 2009, tensions sharpened (La Jornada, 2009). A medley of conservative social forces saw their opportunity and converged around the overthrow of Zelaya (Chronicle Staff, 2009; Grandin, 2009b). ¹¹

The Ottawa Connection

In the years prior to the coup Canadian political relations with Honduras were somewhat fraught. Officials within the Department of Foreign Affairs and International Trade (FAIT) were expressing concern over the lack of clarity in Honduran mining policy. A multi-party tour of Honduras, including meetings with members of Zelaya’s government and Canadian investors, was organized through the Canadian Parliament (Wimmer, 2010). But the Conservative government appeared not to have much hope for Zelaya, and in fact FAIT identified his administration as ‘anti-mining’ (Moore, 2012).

While Canada was sparing with its public concern as confrontation between the military and right wing, on the one hand, and Zelaya and his supporters on the other, heated up in the week before Zelaya’s overthrow, it inserted itself quickly into the volatile mix of Honduran post-coup politics. Over the next few years, Canada extended considerable energies in trying to ensure a particular resolution to the coup, while portraying itself as an honest broker. The clear goal of Canadian foreign policy in Honduras in this instance was to ensure a political and economic climate favourable to the expansion of Canadian capital. In pursuit of this objective, Canada has emphasized two related angles: the promotion of positions in the international sphere that help to undermine the return of genuine constitutional democracy to Honduras, and consistent displays of public support for the consolidation of the coup through the new, ostensibly civilian, presidency of Porfirio ‘Pepe’ Lobo (who assumed office via fraudulent elections in November 2009). This was a strategic, long-view orientation on the part of the Canadian state, the benefits from which would begin to accrue to Canadian multinationals over the course of 2010 and 2011. Buoyed by the introduction of a bilateral Honduran-Canadian Free Trade Agreement, and a new Honduran mining law, Canadian capital aggressively expanded across the maquila, tourist and mining sectors of the country.

Thwarting the return of meaningful democracy was at the core of Canada’s response to the coup, and it has laid the foundations for the eventual expansion of Canadian capital in the country. The coup provided Canada with an opening to contribute to the reversal of the moderate trend to the left in Honduras and the nascent democratization of a country long ruled by a small consortium of economic and military elites (Dunkerly, 1988; Euraque, 1996; Schulz and Sundloff Schulz, 1994). The coup occurred at a time of increasing pressures on Canadian economic interests in Central America, most notably in mining. Canada is one of the largest foreign investor nations in the region (Economic Commission on Latin America and the Caribbean, 2011), and the largest by far in mining. ¹² The controversial activities of Canadian mining companies in Central America have been seriously challenged by an array of indigenous, peasant, community, environmental and worker-based social movements, as well as by governments in particular cases – Guatemala (Dougherty, 2011), El Salvador (Achtenberg, 2011), and Costa Rica (Agence France Presse, 2011; El País, 2011), for example. The Canadian Government has also publicly criticized what they perceive to be a problematic political and economic orientation of the Sandinista government of Daniel Ortega in Nicaragua (Foreign Affairs and International Trade, 2011). Against this wider backdrop, the containment of Zelaya offered Canada’s Conservative government an opportunity to check these multifaceted challenges to its corporate interests. It proved to be in Canadian interests to work to ensure that the defeat of Zelaya, and the reversal of Honduras’s shift to the left following the coup, would not be undone by any hasty reconstitution of even the relatively narrow standards of Honduran constitutional liberalism. Zelaya was, of course, the constitutionally elected president of the country who by right of Honduran law and the Democratic Charter of the Organization of American States (OAS) should have been able to return home immediately and resume the presidency. ¹³

Thus while Canada positioned itself within the ‘international community’ as a dispassionate mediator of conflict resolution, it did so while refusing to publicly demand the return of the constitutional president from exile; in fact, Canadian officials criticized every attempt by Zelaya to return to the presidency on his terms, preferring a resolution negotiated with the oversight of the USA and Canada (Kent, 2009a). Canada’s disposition was lucidly expressed, for instance, when Zelaya made an unsuccessful attempt to return from exile by plane on 5 July 2009. A mass mobilization of his supporters, coinciding with the attempted return, was violently repressed by the security apparatus of the new dictatorship (Cálix, 2010: 44). In light of these developments, Canada’s Minister of State for the Americas, Peter Kent, told the Canadian Broadcasting Corporation (CBC) radio that the deposed president’s ‘attempts to re-enter the country [are] very unhelpful to the situation’, while remaining silent on the crackdown on freedom of expression and assembly (quoted in Rights Action, 2009). When Zelaya did manage to successfully return from exile in September 2009 – only to find himself sequestered under military siege in the Brazilian embassy – Canada failed to condemn his treatment by Honduran authorities, or to call for his freedom from de facto confinement and his return to the presidency (Gordon, 2010a: 378–379). Throughout this period, moreover, not once did Canadian officials directly identify for condemnation the violence committed by the security apparatus against anti-coup activists (Gordon and Webber, 2011).

As part of its effort to contain Zelaya and mediate the return of constitutional democracy following his overthrow, the Harper government also argued that Zelaya bore responsibility for his forceful removal from the presidency by the military. For example, at an OAS meeting in which the regional body was discussing an effort to pressure the Micheletti dictatorship to allow Zelaya to return, Kent contended that the international community had been too one-sided in its approach to the coup, suggesting that ‘The coup was certainly an affront to the region, but there is a context in which these events happened … There has to be an appreciation of the events that led up to the coup’ (Lacey and Thompson, 2009). Conservative Member of Parliament (MP), Dave van Kesteren, speaking to the Standing Committee on Foreign Affairs and International Development (SCFAID) after Canada had made public its trade negotiations with Honduras in 2011, cuts to the chase and lays the blame squarely on Zelaya – and, indirectly, Venezuela. In the process, he nicely captures the Canadian Government’s strategic outlook on recent political developments in Latin America more generally. ‘We really need to set the record straight,’ Van Kesteren insists. ‘The very fact that the coup took place was because the country was drifting toward Hugo Chávez, that type of regime, and the influence that he’s exerting on a lot of southern [sic] … Let’s make no mistake about it. A real power struggle is taking place, and it’s what we believe in as a free society; that’s to have freedom of goods, what we call the unguided [sic] hand, as opposed to total government control or freedom versus totalitarianism, prosperity versus poverty’ (Van Kesteren, 2011). From this perspective, by pushing reforms that exceeded the acceptable parameters of neoliberal political and economic orthodoxy, Zelaya brought the coup upon himself. However much this practice contravenes Canada’s rhetorical commitment to international norms and laws of liberal procedural democracy, it is unsurprising when considered against the Conservative government’s geopolitical interpretation of Honduras as a potential domino in the regional spread of what it has repeatedly characterized as Chávez’s anti-free market authoritarianism (see Gordon, 2010b). Indeed, as Breny Mendoza (Mendoza, 2010) has cogently pointed out, one of the ideological characteristics of imperial reactions to recent coups in Latin America – including the responses of the Canadian state – has been a failure to unambiguously condemn unconstitutional, militarily backed disruptions of democratic rule, followed shortly thereafter by the extension of diplomatic support for new ‘democratic’ regimes established via fraudulent elections. For example, the appeal to democracy and the rule of law has been central to imperial discourse around the coups, or coup attempts, carried out in Venezuela (2002), Haiti (2004), and Paraguay (2012) (Bruce, 2009; Gordon and Webber, 2012; Hallward, 2010).

The Tegucigalpa-San José Accord

Canada’s opposition to the return of genuine democracy in Honduras also fuelled its promotion of a negotiated solution to the crisis, which quickly became the focal point of Canadian energies immediately following the coup, and indeed through to the election on 29 November 2010. Having assertively positioned itself in favour of the failed San José Accord – negotiated over the course of July and August 2009, this accord saw the US attempt to impose a mediation of the conflict through then Costa Rican President Oscar Arias – it was no surprise that Canada then lent its unconditional support to its second incarnation, the Tegucigalpa-San José Accord. The latter was signed by Zelaya under considerable duress from within the isolation of the Brazilian embassy, perhaps with the hope that any agreement, however compromised, would weaken the regime’s forces in the lead-up to the planned elections of November 2009. The opposite turned out to be true. The Tegucigalpa-San José accord reinforced the power of the regime, and provided a veneer of constitutional order under which the Canadian and American governments could support without qualms the November elections. The accord referred the issue of Zelaya’s reinstatement to the presidency back to Congress rather than establishing as the non-negotiable core of any further step forward in a resolution of the conflict. It also imposed a ‘national unity’ concept through its call for a power-sharing government involving Zelaya’s forces alongside representatives of the dictatorship. The notion of proceeding with a Constituent Assembly of any type was ruled out of court. Zelaya remained under siege in the Brazilian embassy, repression continued against civilian supporters of the resistance and pro-coup candidates campaigned for the November elections without any opposition party representing opponents of the coup of June 2009. In this context, Zelaya withdrew from the accord.

The Canadians declared the Tegucigalpa-San José Accord a major step forward for Honduran democracy. No mention was made of repression, the ongoing confinement of Zelaya to the Brazilian embassy and the lack of authentic opposition to regime forces in the electoral context. Indeed, with the Accord in place, Canadian representatives now felt emboldened to reverse the earlier Canadian position that they supported elections that took place without the re-establishment of constitutional order (Gordon and Webber, 2011: 337). Then Canadian Ambassador Neil Reeder (2009a) reported to Ottawa after witnessing the Accord’s signing that, ‘as a longstanding aid, trade and investment partner with Honduras, we were delighted with this outcome.’ Tellingly, although Zelaya reluctantly decided to negotiate within its frame of reference, it was unpopular with leading figures of the resistance because it was seen as an attack on the Zelaya government’s modest reform agenda, a fact which Canadian officials on the ground in Honduras observed in a report to the Foreign Affairs office in Ottawa (Reeder, 2009b).

Ambassador Reeder was active in various facets of the San José-Tegucigalpa Accord negotiations, while Canadian representatives, including Kent, participated in two high-level OAS missions to Tegucigalpa in August and October 2009 to help advance a resolution when negotiations for the original San José and the subsequent San José-Tegucigalpa Accords began to stumble. The Canadians were also in close contact with the principal mediator, Oscar Arias – who would subsequently be linked to a graft scandal involving Canadian mining company, Infinito Gold, in Costa Rica (Norman, 2011) – throughout the negotiations. Canada’s goal was to have the San José-Tegucigalpa Accord in place, and Zelaya back in the presidency without meaningful presidential authority, not long before the November election. Canada could then present the restoration of Honduran constitutional democracy to the international community, making the recognition of the election of Lobo – and the portrayal of his regime as representing the end of the coup period – an easier public relations task. Confident it would eventually be accomplished, Canadian officials initially maintained that the Accord needed to be ratified in order for Canada to support the presidential election (Reeder, 2009a; Valdes, 2009).

The Accord was signed but never ratified, as Micheletti and his supporters in the end refused even to concede the position of figurehead president to Zelaya, inciting the latter to denounce the Accord and declare it dead. As it turned out, however, Canada’s commitment to the Accord’s ratification, and thus the formal (if not the real) return of constitutional democracy, in the end proved to be sufficiently flexible to allow Canada’s immediate recognition of the newly elected government of Porfirio Lobo, indeed with the pledge that Canada would offer him unfailing support. While they would have preferred ratification in order to more easily defend the claim that constitutional order had been restored, the Canadians were not about to allow the failure of ratification to interfere with Ottawa’s deeper objectives in Honduras. Canada quickly assumed a leading role in defending Honduras’s return to ‘democracy’ and articulating the argument for its reintegration into the international community.

For instance, although Kent expressed ‘disappointment’ that the Accord was not implemented in time for the election, he was nevertheless quick to praise the authenticity of the November proceedings. Ignoring the widespread anti-regime demonstrations, the military repression and intimidation of oppositional forces, and the accusations of fraud surrounding the elections (Cálix, 2010: 48; Cruz, 2010: 71), Kent eagerly announced that, ‘Canada congratulates the Honduran people for the relatively peaceful and orderly manner in which the country’s elections were conducted. While Sunday’s elections were not monitored by international organizations … we are encouraged by reports from civil society organizations that there was a strong turnout for the elections, that they appear to have been run freely and fairly, and that there was no major violence’ (Kent, 2009b). ¹⁴

Canada’s flexible position towards the election of a government in the context of a coup also received ex post facto justification by Reeder, who blamed Zelaya for the failure of the San José-Tegucigalpa Accord. Speaking to the SCFAID on 21 March 2011 to defend Canada’s strong relationship with a government elected outside the frame of a constitutional democracy, Reeder argued that ‘the actions and rhetoric of President Zelaya, prevented a compromise solution from being reached’ (Reeder, 2011). Reeder is presumably referring to Zelaya’s criticism of, and withdrawal from, the Accord process after initially signing it when the Congress refused to reinstate him to the presidency.

The failure of the San José-Tegucigalpa Accord, however, raised inescapable questions about the Lobo government’s legitimacy that would not disappear with the granting of recognition by Canada or the USA. Lobo was elected under a dictatorship without the return of constitutional restoration via the Accord, while suggestions of electoral fraud by Lobo’s supporters swirled around Honduras. Ongoing repression against resistance members fuelled international concerns further. Most Latin American countries and the OAS refused to recognize the new Honduran government. The FNRP argued that the Lobo regime represented not the end of the coup but its consolidation under the veneer of democracy.

Canadian representatives remained quiet about repression and continued the heightened engagement with Honduran leaders that was initiated following the coup with the new Lobo government. In its 2009 Honduran ‘Country Strategy Process’ FAIT had already identified, as a ‘strategic objective’, ‘expanding Canada’s engagement with the political leadership through regular visits and dialogue’ (Foreign Affairs and International Trade, 2009). In the context of Honduras’s post-electoral international isolation, ‘expanding … engagement with the political leadership’ took on added significance. On top of regular communications and meetings between embassy representatives and Honduran political leaders, Kent visited Honduras and met with Lobo and key cabinet ministers in high-profile encounters before US Secretary of State, Hillary Clinton, visited the country, travelling twice (February and August 2010) in the first seven months following Lobo’s inauguration. No other country received that much public attention from Kent over this period. The meetings should be read in part as a public display of support for the new, isolated and embattled government, a visible communiqué to international observers that things are back to normal in Honduras and Lobo is a legitimate democratic leader and interlocutor.

Canadian efforts to represent Lobo as a legitimate president and challenge his government’s isolation were also taken to the OAS, where the USA and Canada unsuccessfully led the charge for Honduras’s readmission in the months following Lobo’s inauguration. Kent and Assistant Deputy Minister for the Americas, Jon Allen, both separately met with OAS Secretary General, José Miguel Insulza, to get him on board with and to strategize around the readmission of Honduras to the hemispheric body, which at the time was strongly opposed by Brazil and the nations of ALBA (Organization for American States, 2011). Insulza followed up by calling for an OAS delegation to meet with the new government in order to investigate the extent to which democracy had indeed been restored, as well as to ensure that those responsible for the coup were being held accountable. While Canada’s efforts were checked by Brazil and ALBA, these displays of solidarity clearly endeared Canada to Lobo. One of Kent’s Honduran visits is described in a FAIT report as ‘very successful in solidifying Canadian relations with the new Honduran government’ (Wimmer, 2010). Kent’s meetings included extended discussions with Lobo and Foreign Minister, Mario Canahuati, in which the Minister for the Americas committed Canada to continue fighting the international isolation of Honduras. In response, Canada was thanked by the Honduran representatives for its role ‘as a friend and a balanced interlocutor’ in post-coup Honduras (Reeder, 2010a).

Towards the Free Trade Agreement

As noted, Zelaya’s term in office introduced a modest break with neoliberal orthodoxy, but post-coup Honduras has witnessed its vengeful return, first under Micheletti, and then under Lobo. There has been perhaps no clearer indication of Lobo’s commitment in this regard than the investment conference held in Trujillo in May 2011, ‘Honduras is Open for Business’, the motto of which was ‘a moment of change, a horizon of opportunities’. The conference was accompanied by the publication of a government document, Honduras: A Country Open for Investment (Gobierno de Unidad Nacional de Honduras, 2011). Arguably the most sensational and emblematic feature of the neoliberal acceleration under Lobo, however, is the promotion of ‘special development regions’, or ‘model cities’, fashioned out of the concept of ‘charter cities’, conceived by Paul Romer, an economics professor at New York University. The Lobo regime has passed a constitutional amendment allowing for ‘what amounts to internal start-ups – quasi-independent city-states that begin with a clean slate and are then overseen by outside experts. They will have their own government, write their own laws, manage their own currency and, eventually, hold their own elections’ (The Economist, 2011). The governance of Honduran charter cities, or special development regions, will feature a ‘transparency commission’ constituted by a board of technocrats – unelected foreigners – ‘a kind of board of trustees that appoints the governors, supervises their actions and is meant to make sure that the entities are beyond reproach’ (The Economist, 2011). Even the most basic elements of procedural liberal democracy will only be ‘introduced gradually’, that is ‘only when the transparency commission deems that the time is ripe will citizens be able to elect the members of the "normative councils" – in effect, local parliaments’ (The Economist, 2011). Taxes will be capped at 12 percent for individuals, and 16 percent for corporations. As will become clear below, these regionalized dystopic anti-democracies feature prominently in Canadian capital’s tourism investment plans for the country.

With the distraction of the ‘political crisis’ behind it, ‘reconciliation’ a fait accompli, Lobo’s aggressive neoliberalism proceeding apace and the FNRP contained, for the time being at least, prospects for Canadian capitalist expansion and intensification in Honduras have improved considerably. While diplomatic energies following the coup were focused on the political resolution, more explicit economic diplomacy was shifted to the forefront of the Honduras file when Lobo came to power. The day after Lobo’s inauguration Reeder and the head of the Canadian International Development Agency (CIDA) in Honduras, Daniel Arsenault, made a ‘courtesy’ call to Mario Canahuati, Lobo’s new Foreign Affairs Minister, a businessman and member of one of the country’s wealthiest families. It was the first ‘courtesy’ call by an ambassador to Canahuati and portended future efforts to come (Reeder, 2010b).

The most public expressions of the re-energized economic diplomacy following Lobo’s inauguration were Kent’s excursions in February and August of 2010 and meetings with Lobo and key cabinet ministers. Aimed on the one hand at challenging Honduras’s political isolation, they were also intended to support Canadian capital’s push for greater access to the Honduran market. Although less publicized, the Minister of State and embassy officials also met with Canadian business leaders and toured their operations. Canadian diplomats used these trips to facilitate a process of dialogue between Canadian capital and Honduran political leaders. Canadian investors garnered commitments from their Honduran hosts to ‘facilitate investment, particularly foreign investment,’ as one embassy Situational Report notes (Arsenault, 2010; Wimmer, 2010).

The embassy also established a Canadian business advocacy council in Honduras soon after the coup composed of Canadian investors in order, one FAIT report notes, to ‘facilitate dialogue with the host government’ – that is, the Micheletti dictatorship. ¹⁵ The same report stresses that embassy officials ‘remain in close contact with all Canadian investors in Honduras, and regularly visit their investments including in the extractive and textile sector’. A little over a month after Lobo’s inauguration and Reeder’s and Arsenault’s congratulatory correspondence to the government, the embassy’s Trade Commissioner met with the new Minister of Natural Resources and the Environment, Rigoberto Cuellar, a meeting the Ambassador reports (Reeder, 2010b) to the Vice President of Canadian mining company, Breakwater Resources, ‘was very positive’. Canadian officials also arranged meetings in early 2010 between Canadian maquila company, Gildan Activewear, and representatives of the new Lobo government (Canadian Embassy, 2010). The embassy has evidently been an important mediator between Canadian investors and the highest levels of the Honduran political apparatus.

The first coup de grace of Canada’s push for more extensive access to the Honduran market, however, was the bilateral Free Trade Agreement (FTA). Canada’s political support for the Lobo regime, and its aggressive economic diplomacy in Honduras more generally, was amply rewarded when, on 26 July 2011, Harper and Lobo signed the FTA. The timing of the FTA appears to have been facilitated by the re-legitimation of Honduras in the eyes of the international community, as a result of the Cartagena Accord and the reintegration of Honduras into the OAS only two months earlier. The FTA was presented as an expression of normalized relations with a democratic Honduras.

In August 2010 Ambassador Reeder was promoted to Director General for Latin America and the Caribbean in FAIT and replaced by Cameron Mackay, whose previous work in FAIT was not ambassadorial but concentrated in various trade-related portfolios. Mackay’s appointment was influenced by a desire to advance trade negotiations between Canada and Honduras in the context of the political opening that post-coup Honduras provided. Indeed, not long after his appointment (but before his credentials had been received by the Honduran government from Ottawa) arrangements were made to meet with Canadian investors in Honduras and with Honduran cabinet ministers to discuss the mining law (Wang, 2010).

Honduras was originally part of the stalled Central American Four (CA4) multilateral FTA negotiations with Canada, which also included Guatemala, El Salvador and Nicaragua. However, these negotiations had stalled as moderately reformist governments, somewhat more cautious of foreign investment in mining than previous governments more explicitly and aggressively bound to the neoliberal project, were elected in Guatemala, El Salvador and Honduras; and there was no sign that these negotiations would receive new life any time soon. But having built up its political capital as an ally of the Micheletti and Lobo regimes, and knowing Lobo is the strongest supporter among the Central American presidents of foreign investment and free markets, Canada started negotiating with Honduras independently of the rest of the CA4 in December 2010. Foreign Affairs and International Trade’s ‘Trade Negotiations’ page for Central America reflected prosaically almost a year into Lobo’s mandate, for example, that now ‘Canada is closer to reaching an agreement with Honduras than it is with the other three countries.’ Indeed, the bilateral FTA was concluded quite rapidly, a mere seven months after negotiations commenced. FTA negotiations can, and often do, take years to come to fruition. While the bilateral FTA with Honduras was concluded in July 2011, its details had not been made public by the time of writing (September 2012). It is well established, however, that Canadian trade negotiators adhere to a best practices model, meaning that Canada seeks to reproduce and even improve upon what it identifies as the most successful elements of previous agreements. For Canada, best practice in this sense includes national treatment for Canadian foreign direct investment, most favoured nation treatment for Canadian capital and investment clauses, such as Chapter 11 of NAFTA, which contain the controversial investor-state dispute settlement mechanism. ¹⁶

The real and symbolic significance of the FTA was reflected in Harper’s personal attendance at the signing ceremony in Honduras. Not only did Harper announce the completion of the Canada-Honduras Free Trade Agreement and meet Canadian business leaders, but he became the first foreign leader to visit Honduras and meet Lobo since the country’s readmission to the OAS on 1 June 2011. Lobo’s Honduras, Harper’s summit sought to demonstrate, is a respectable member of the international community and Canada can be counted upon as an ally. At the same time, Harper was clear as to the economic motivation of his trip, declaring that a ‘free trade agreement with Honduras is a key part of our Government’s agenda to open new markets for Canadian business’ (Harper, 2011). What Harper is reticent to acknowledge, however, is the relationship between the successful negotiation of the FTA and the military overthrow of Zelaya. There is a discernible line of causality running directly from the coup of 2009 through to the signing of the FTA. The CA4 negotiations had stalled. The Centre-Left had assumed office through elections in much of the rest of Central America. Social movements within Honduras itself had gained a voice in the mainstream political debate during Zelaya’s presidency. Mining development policies identified as facilitating the FTA were under much greater scrutiny. Without the coup it is doubtful that the trade agreement between Canada and Honduras would have reached fruition, as an active social movement left, and possibly a rewritten constitution with popular input, would have made it extremely difficult. This is certainly not lost on Honduran social movements, who have condemned the FTA. The Consejo Cívico de Organizaciones Populares e Indígenas de Honduras (The Civic Council of Popular and Indigenous Organizations of Honduras – COPINH), for example, is clear about the connection between the FTA, Canada and the coup: ‘the free trade agreement between Canada and Honduras is the fruit of the coup d’etat and its continuation’ (COPINH, 2011). The FTA, it adds, represents ‘a violation of our sovereignty’ that will involve the ‘usurpation of the territories, cultures and lives of indigenous and African’ Hondurans. The FTA, according to COPINH, has made the implications of the coup that much starker for ‘the indigenous and African Hondurans’ in whose territories lie the ‘resources Canadian transnationals need’ (COPINH, 2011).

Conclusion

Far from a neutral arbiter in Honduran post-coup politics, Canada has sought a strategic economic advantage in the Central American country by aiding in and exploiting the setback to its social movement and electoral Lefts and promoting its rightward political shift. Available information to date suggests that the Canadian state did not help to organize or finance the coup (as it had done in the case of Haiti in 2004: see Gordon, 2010a: 326–335), but the Harper government clearly saw an opportunity with Zelaya’s removal and carefully crafted a diplomatic strategy that checked the deposed president’s return to power and developed strong ties with Lobo instead, in the process helping to undermine the return of genuine constitutional democracy under the pretence of a ‘national reconciliation’ process that was anything but. As repression of social movements persists, Canada’s political-economic engagement has provided an effective platform for the expansion of Canadian capital in tourism, maquilas and mining. Canadian capital has a significant, growing and controversial presence in the country. It now has a free trade agreement, and a new mining law, more amenable to foreign capital, is likely forthcoming by mid-2013 (La Tribuna, 2012; Mining Watch, 2012).

This article has demonstrated that study of American foreign policy alone offers us only a partial view of post-coup Honduras. The USA is not the only power that is looking to redraw the political landscape in Honduras, Central America and the Americas more broadly. As a central foreign investor nation in Honduras, Latin America and the Caribbean, there is a great deal at stake for Canada in the political developments in the region. Canadian capital and foreign policymakers are indeed quite sensitive to governmental and social movement challenges to neoliberalism and Canadian investments, which have not been uncommon throughout the region. We should therefore not be surprised when Canada assumes a more aggressive posture towards Venezuela, befriends Colombia despite the repression of trade unionists and indigenous peoples, works closely with the Americans and French to undermine the government of Jean-Bertrand Aristide in Haiti, and now plays a lead role in promoting the international legitimacy of the Lobo regime in Honduras (see Gordon, 2010a). While Honduran popular movements maintain their struggle against the regime, the Canadian state’s intervention must be measured a success for Canadian capital operating in the country.