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### Viewing cable 05SANJOSE2008, THE PROCESS OF RATIFYING FTAs IN COSTA RICA

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
05SANJOSE2008 | 2005-08-26 14:02 | 2011-03-03 16:04 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy San Jose

Appears in these articles:
http://www.nacion.com/2011-03-03/Investigacion/NotasDestacadas/Investigacion2697430.aspx
http://www.nacion.com/2011-03-03/Investigacion/NotaPrincipal/Investigacion2697496.aspx
http://www.nacion.com/2011-03-03/Investigacion/NotasSecundarias/Investigacion2697489.aspx
http://www.nacion.com/2011-03-03/Investigacion/NotasSecundarias/Investigacion2697532.aspx
http://www.nacion.com/2011-03-03/Investigacion/NotasSecundarias/Investigacion2697535.aspx
http://www.nacion.com/2011-03-03/Investigacion/NotasSecundarias/Investigacion2701964.aspx
http://www.nacion.com/2011-03-03/Investigacion/Relacionados/Investigacion2701965.aspx

`

    This record is a partial extract of the original cable. The full text of the original cable is not available.

` `

    UNCLAS SECTION 01 OF 02 SAN JOSE 002008

    SIPDIS

    SENSITIVE

    WHA/CEN
    EB FOR WCRAFT, BLAMPRON
    E FOR DEDWARDS
    WHA/EPSC FOR KURS, LGUMBINER
    STATE PASS TO USTR FOR RVARGO, NMOORJANI, AMALITO

    E.O. 12958: N/A
    TAGS: ETRD ECPS ECON PREL PGOV SOCI CS
    SUBJECT: THE PROCESS OF RATIFYING FTAs IN COSTA RICA

    ¶1.  (SBU) Summary.  The process to ratify free trade
    agreements such as the United States-Central American-
    Dominican Republic Free Trade Agreement (CAFTA-DR) in Costa
    Rica is not simple.  It is not even clear whether the
    agreement must be passed by a simple or a two-thirds
    majority.  The Assembly members (deputies) will have to
    vote at least twice on the agreement -- once before and
    once after the Constitutional Court reviews it for any
    potential conflicts with the Costa Rican constitution.  The
    entire process will take at least 6 months and possibly
    much longer, and the process can begin only after President
    Pacheco sends the treaty to the Legislative Assembly.  Post
    is hopeful that that will occur this calendar year, but the
    President has not made a decision yet.  End Summary.

    ----------------------------
    SIX FTAs DOWN AND ONE TO GO
    ----------------------------

    ¶2. (U) The GOCR, with the Ministry of Foreign Trade (COMEX)
    as the lead governmental organization, has negotiated and
    the Assembly has approved five FTAs already: Mexico in
    1995, Canada in 2001, Chile and the Dominican Republic in
    2002, and most recently CARICOM, a group of 12 Caribbean
    nations comprising Antigua and Barbuda, Barbados, Belize,
    Dominica, Grenada, Guyana, Jamaica, St. Kitts and Nevis,
    Saint Lucia, St. Vincents and the Grenadines, Suriname, and
    Trinidad and Tobago.  (Note: In 1973, prior to COMEX's
    existence, the GOCR ratified an FTA with Panama.)  As an
    example of the process, COMEX started negotiations with
    CARICOM on October 22, 2002, and ended on March 14, 2003.
    After President Pacheco signed the agreement on March 9,
    2004, the agreement was sent to the Assembly where it was
    referred to the International Relations and Foreign Trade
    Commission for study.  After voting to send the agreement
    for a vote on the Assembly floor, the Assembly approved the
    FTA in its first debate on the issue on May 9, 2004.

    ¶3.  (U) As required by law, the Constitutional Court
    reviews all international agreements, including FTAs, to
    check that all procedural requirements are met and that
    there are no potential conflicts with the Costa Rican
    constitution.  After finding no significant issue with
    respect to the agreement with CARICOM, the FTA, by law, had
    to be voted on a second time.  On August 9, 2005, 41 of the
    48 members present in the Costa Rican Legislative Assembly
    voted final approval of the FTA with CARICOM.  The second
    vote occurred approximately one year after the Assembly
    first started discussions on this issue.  The agreement was
    signed by President Pacheco on August 23, 2005, and will be
    published in the official government gazette, after which
    the FTA will be considered officially ratified.

    ---------------------------------
    A POSSIBLE TIMETABLE FOR CAFTA-DR
    ---------------------------------

    ¶4.  (U) Currently Costa Rica remains the only signatory
    country of CAFTA-DR that has not already sent the agreement
    to its legislature.  The Administration is waiting for "the
    appropriate time" to send it for ratification.  Assembly
    President Gerardo Gonzalez from the President's Social
    Christian Unity Party (PUSC) is still pursuing the
    acceptability of a deputy submitting CAFTA-DR to the
    Assembly if the President will not.  COMMENT:  Most
    constitutional experts believe that only the President is
    permitted to submit an international agreement such as
    CAFTA-DR to the Assembly for ratification.  END COMMENT.

    ¶5.  (SBU) The Constitutional Court finds problems with many
    bills it reviews and in that likely case would send its
    comments on potential conflicts to the Assembly for
    correction.  If there are significant issues, the agreement
    may be sent back to the International Relations and Foreign
    Trade Commission to study the Court's comments and to
    implement corrective changes, if possible.  With respect to
    CAFTA-DR, Assembly staff sources told Econoff that the
    President of the International Relations and Foreign Trade
    Commission Rolando Lacle (PUSC) has primed the process by
    discussing conduct of the review with Commission members.
    The first vote is expected in approximately three to four
    months, followed by an at least one-month review by the
    Constitutional Court.  In a best-case scenario, a second
    vote would be held approximately four to five months after
    CAFTA-DR is introduced in the Assembly.  (Note: In the case
    of the CARICOM FTA, which was not contentious, 16 months
    elapsed between the first vote in the Assembly and the
    agreement coming into force.  Many Costa Ricans estimate
    that 6-8 months of debate may be needed for CAFTA-DR before
    the first vote.)

    --------------------------------------------- ----
    SIMPLE MAJORITY OR TWO-THIRDS TO PASS CAFTA-DR?
    --------------------------------------------- ----

    ¶6.  (SBU) There still exists a question as to whether a
    simple majority or two-thirds majority is required to pass
    CAFTA-DR.  The prevailing opinion from many sources is that
    only a simple majority (half plus one) is necessary in each
    of the two Assembly votes to approve CAFTA-DR.  However,
    there are some political experts who believe that a two-
    thirds majority will be necessary.  Based on information
    provided by a former COMEX official and Legislative
    Assembly staff members, all previous FTAs were passed by
    more than a two-thirds vote, although the stated
    requirement was only a simple majority.  During the most
    recent FTA vote, Assembly President Gerardo Gonzalez issued
    a ruling stating that the approval of the CARICOM FTA
    required only a simple majority.

    ¶7.  (SBU) The Constitutional Court reviewed the case and
    did not take issue with his ruling.  FTAs may vary in the
    breadth and detail of the texts.  It appears that the issue
    regarding how many votes will be needed to pass CAFTA-DR
    remains unclear.  A former COMEX official stated that the
    investment-related portions of CAFTA-DR may be an aspect
    that could lead one to believe that a two-thirds majority
    is required.  COMMENT:  Based on information available to
    Post, there may be enough support for CAFTA-DR in the
    current Assembly to pass the agreement even if a two-thirds
    majority is required, especially if most of the PUSC,
    National Liberation Party (PLN), and Libertarian Movement
    Party (ML) deputies vote in favor of CAFTA-DR, as they
    currently say they will.  END COMMENT.

    ¶8.  (SBU)  Legislative Assembly staff members insist that
    only a simple majority is required for CAFTA-DR approval
    and cite the most recent FTA with CARICOM as an example.
    Based on information provided by these sources, a review of
    a minimum of three to four months until the first vote is
    expected.  The Constitutional Court review will take at
    least one month, followed by the second vote or, in the
    case of finding significant issues, perhaps another lengthy
    review process.

    ¶9.  (SBU) Proponents of requiring a two-thirds majority to
    pass CAFTA-DR refer to a much-disputed 1993 Constitutional
    Court ruling involving the World Bank's International
    Center for Settlement of Investment Disputes (ICSID).  The
    Constitutional Court stated that due to the ceding of
    control of legal remedies to a supra-national body, a two-
    thirds majority was required.  However, according to a
    former COMEX official, this ruling appears to be based on
    an obscure 1960 change to the constitution that was passed
    to discourage closer ties with other Central American
    countries.  The Constitutional Court's decision in that
    case seems not to have been based on precedent and has not
    been repeated during the review of numerous other
    international agreements, such as joining the World Trade
    Organization, in which Costa Rica ceded far broader
    jurisdiction on commercial disputes than is contemplated
    under CAFTA-DR.

    -------
    COMMENT
    -------

    ¶10.  (SBU) The Legislative Assembly's history regarding the
    length of time it takes to approve an FTA does not bode
    well for a rapid approval of CAFTA-DR.  The Assembly took
    approximately 18 months to approve the most recent FTA with
    CARICOM.  Post believes that the process to approve CAFTA-
    DR, once it is in the Assembly's hands, will take at least
    six months.  Complicating the CAFTA-DR approval process are
    the Presidential and Legislative elections that will be
    held in February 2006.  The President and entire Assembly
    will be replaced in May 2006 as consecutive terms are not
    permitted under Costa Rica's constitution.
    FRISBIE

`