This report discusses the current state of Honduras, which is one of the Western Hemisphere's poorest countries and has a high poverty rate, high infant mortality rate, and a widespread HIV/AIDS epidemic. This report also discusses the relationship between the U.S. and Honduras, focusing on the countries' important trade partnership, the U.S. military presence in Honduras, and U.S. foreign aid.

As part of its overall trade strategy, the Bush Administration over the last year began negotiating bilateral free trade area (FTA) agreements with four regional blocs or countries. Negotiations on a U.S.-Central American Free Trade Agreement (CAFTA) involving Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua began in late January 2003 and are currently scheduled to conclude this December. While negotiators have reportedly made progress in a number of areas, efforts to formulate a framework for handling agricultural trade have been slow.