December 1, 1999

Nicaragua retaliates against Honduras over maritime treaty

                  MANAGUA, Nicaragua -- Nicaragua has initiated an economic and
                  diplomatic offensive against Honduras, breaking commercial ties with its
                  Central American neighbor over a maritime treaty between Honduras and

                  The agreement grants each of those nations rights to Atlantic waters claimed
                  by Nicaragua.

                  Nicaraguan President Arnoldo Aleman also warned that Central American
                  integration, a process under way for more than two years, had been
                  jeopardized by the Honduran parliament's decision to formalize Colombia's
                  territorial rights along Central America's continental shelf in the Caribbean.

                  "Nicaragua does not recognize this treaty," Aleman told a news conference
                  in Managua hours after the Honduran Congress began ratifying the treaty in
                  a special overnight legislative session.

                  Honduran legislators from five political parties voted 128-0 in favor of the
                  treaty. In a speech prior to the vote, Honduran Foreign Minister Roberto
                  Flores Bermudez told the legislators, "Honduras is not trying to hurt
                  Nicaragua or any other country, but it won't permit that they harm its
                  historically sacred sovereign rights."

                  Honduras and Colombia originally signed the Caribbean Sea Maritime
                  Limits Treaty in 1986. In ratifying the accord early Wednesday, Honduras
                  formally recognized 15 degrees north latitude as its frontier with Colombia, a
                  demarcation that grants Colombia and Honduras thousands of square
                  kilometers of Atlantic waters claimed by Nicaragua in a historical territorial

                  Honduran officials described the treaty as an effort to safeguard their own
                  and Colombia's legitimate rights.

                  Honduran president: 'Not seeking confrontation'

                  "We are not seeking confrontation or hostilities; we are simply exercising our
                  sovereign right to define our borders," Rafael Pineda, president of the
                  Honduran Congress, told Reuters.

                  But Aleman said Honduras had submitted to "expansionist policies" in
                  granting territorial rights to a country outside the region, undermining Central
                  American efforts to form a political and economic union in the face of

                  Aleman called on the Nicaraguan National Assembly to pass a "sovereignty
                  tax" that would impose special import tariffs on Honduran products.

                  Honduran exports would lose trade benefits extended to Central American
                  producers, he said.

                  Nicaragua also will seek to reroute its exports through the Pacific port city of
                  Corinto and to reestablish ferry service to El Salvador so that current trade
                  routes through Honduras can be avoided, Aleman said.

                  No military action planned

                  Nicaragua issued a formal protest against the treaty and will pursue legal
                  action to invalidate it, Aleman said.

                  No military action was planned, although "everything has been
                  contemplated," Aleman said. "We have very capable armed forces, and a
                  very capable police force, and everyone is at their posts."

                  Despite Nicaragua's protests, Colombia's foreign minister said the treaty
                  would now be brought before his country's legislature for ratification.

                  Foreign Minister Guillermo Fernandez said territorial disputes with
                  Nicaragua were put to rest under a 1928 treaty. While Nicaragua's
                  Sandinista government of 1979-1990 declared that treaty invalid, reviving
                  the dispute between the two countries, Colombia has maintained the treaty
                  cannot be broken unilaterally.

                  "Colombia has nothing to discuss with its sister republic of Nicaragua,"
                  Fernandez told a local radio station. "The government of Colombia
                  celebrates the fact that the Honduran legislature has unanimously ratified this
                  treaty, which establishes maritime limits according to international law."