It appears that, at last, Central America and Europe will begin negotiating an Association Agreement in the fall. The European Union has long demanded that Central America negotiate as a block; the EU now seems satisfied by recent isthmus promises to create a tariff union by 2008. But regional leaders doubt than an agreement with Europe will be reached for years. Furthermore, civil society organizations here and abroad are wary of the looming negotiations. One report cites the precedent of the EU's agreement with Mexico, arguing that the EU's rhetoric on “cooperation” obscures its mostly self-interested motives.

A recent raise in the public sector's minimum wage has bolstered hopes for a private sector raise as well. Inflation and consumer prices have risen sharply in the past year, making it difficult for many workers to make ends meet. While urban areas have seen wage hikes in recent years, rural areas have been left out. Now the government's chief labor representative is hopeful that negotiators will agree to raise salaries nationwide.

In an attempt to lure foreign investors, the government has exempted the Guatemalan Nickel Company (CGN), from the payment of import duties and value added tax. This has infuriated social organizations which have fought tooth and nail against the CGN, a subsidiary of Canadian mining corporation, Skye Resources, arguing that open pit mining is hugely damaging for the environment and leaves few benefits for local communities. According to activists, it is unacceptable that a multimillion corporation should be exempted from tax, thus depriving state coffers from much needed funds required for the provision of basic services such as schools, hospitals and housing.

A non-violent protest was held in the municipality of Suchitoto against the privatization of the public water system. Coinciding with President Saca's visit to the area on July 2, a number of social organizations took to the streets to voice their opposition to a “Plan for the Decentralization of Public Services,” regarded as a thinly-veiled drive towards privatization. The protest was met with heavy-handed repression from the police and fourteen people, including a journalist and a photographer, were arrested and charged with “terrorism”. Human rights organizations have condemned the authorities for denying Salvadorans' right to peaceful protest.

Although telecommunications infrastructure throughout the region is underdeveloped, low cost cell phone service has permitted much of Central America's rural poor to join the grid. This is one of the key findings of a recent report by “Research and Markets,” which indicates that cell phone use throughout the isthmus has skyrocketed in the past five years. Indeed, although Central American's use of cell phones still falls short of the Latin American average, at current growth rates this may change soon. Meanwhile, there is a furious debate, in Honduras and Costa Rica especially, about what role the state should play in helping the poor gain access to telephone service.