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### Viewing cable 08SANJOSE31, COSTA RICA -- CAFTA EXTENSION REQUEST LIKELY

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
08SANJOSE31 | 2008-01-17 17:05 | 2011-03-02 16:04 | CONFIDENTIAL | Embassy San Jose
Appears in these articles: http://www.nacion.com/2011-03-02/Investigacion.aspx

`

    VZCZCXYZ0010
    PP RUEHWEB

    DE RUEHSJ #0031/01 0171740
    ZNY CCCCC ZZH
    P 171740Z JAN 08
    FM AMEMBASSY SAN JOSE
    TO RUEHC/SECSTATE WASHDC PRIORITY 9345
    INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE PRIORITY
    RUEHDG/AMEMBASSY SANTO DOMINGO PRIORITY 1577
    RHEHNSC/NSC WASHDC PRIORITY

` `

    C O N F I D E N T I A L SAN JOSE 000031

    SIPDIS

    SIPDIS

    DEPT FOR WHA, WHA/CEN, WHA/EPSC AND EEB; PLEASE PASS TO
    USTR:AMALITO/DOLIVER

    E.O. 12958: DECL: 01/17/2018
    TAGS: CS ECON ETRD PGOV PINR PREL
    SUBJECT: COSTA RICA -- CAFTA EXTENSION REQUEST LIKELY

    REF: 07 SAN JOSE 2070 AND PREVIOUS

    Classified By: Classified By: DCM Peter Brennan per 1.4 (d)

    ¶1.  (C) SUMMARY: While the national legislature (Asamblea)
    works at full speed to complete CAFTA implementing
    legislation, GOCR officials (and the local media) are
    openly speculating about a probable entry-into-force EIF
    extension.  In private, executive and legislative branch
    contacts are almost unanimous: there is no way Costa Rica
    can meet the March 1 deadline; at least another two months
    probably will be needed.  In public, President Arias and
    Minister of the Presidency Arias are keeping pressure on
    the legislature, but the President has acknowledged that
    meeting the deadline is "unrealistic".  The Arias
    brothers are also making clear that should there be an
    extension, the PAC-led opposition,s obstructionist
    "legislative terrorism" would be to blame.  With the public,
    and much of the Asamblea eager to get beyond CAFTA to
    other hot issues such as public security, the pro-CAFTA
    G38 coalition working well in the Asamblea, and the PAC
    under fire for its dilatory tactics (septel), Costa Rica
    may at last build sufficient momentum to get the CAFTA
    job done, although not on time.  We anticipate
    an extension request after the GOCR takes stock of
    progress at the end of January.  END SUMMARY.

    ===============================
    LEGISLATURE AT FULL SPEED . . .
    ===============================

    ¶2.  (SBU) Pro-CAFTA legislators returned to work seemingly
    refreshed from their year-end recess and determined to make
    progress on the implementing agenda.  PLN faction chief
    Mayi Antillon seemed pleasantly surprised by the G38,s
    discipline and focus when she met with Pol/Econ Counselor
    on January 9.  Antillon sketched a timetable based on two
    sessions a day, under fast track rules, that would grind
    through legislation fairly swiftly (by Costa Rican
    standards).  Her goal is to move quickest (and in parallel)
    on the two telecom laws and the UPOV law (which passed its
    first plenary vote on January 14), in order to complete the
    first vote on these politically controversial topics before
    universities (full of potential protesters) resume class
    in early February.  She also predicted fast action on the
    Budapest Treaty.  The problematic Libertarian Party (ML)
    is cooperating, Antillon added, assuaged by, among other
    concessions, the PLN agreeing to form a new
    legislative committee on public security (an ML and PAC
    priority).  Vice Minister of the Presidency Roberto
    Thompson also gave an upbeat message to Pol/Econ
    Counselor on January 10.

    =========================
    . . . BUT NOT FAST ENOUGH
    =========================

    ¶3.  (C) Antillon,s and Thompson,s best case scenarios,
    however, predict the Asamblea approving (in 1st vote) no
    more than 3-4 more items of implementing agenda by the end
    of January, with all of these likely facing 30-day
    Constitutional Chamber (Sala IV) review (forced by the PAC)
    before becoming law.  (The PAC has already asked that the
    UPOV bill be sent to the Sala IV for review.)  Even without
    Sala-required revisions, these bills would not become law
    until March, bringing the grand total of fully completed
    items at that time to 6-10 (out of 13 total).  Antillon
    predicted she could finish all the legislation by April or
    May, but this is contingent on maintaining the current
    pace in the Asamblea and discipline in the G38.  She added
    that any extension in the Asamblea would have to be part of
    a broader national strategy including a diplomatic
    component with the USG and other CAFTA-DR parties, and a
    public relations component, both domestic and
    international.

    ¶4. (SBU) ML and PLN party staffers paint a similar
    picture.  Even with three-a-day and weekend sessions (which
    the legislators are likely to resist and which Antillon
    hopes to avoid), it is mathematically impossible, they say,
    to complete all the implementing legislation by March 1.
    ML calculations, in fact, suggest that a six-month
    extension might be realistic, given the other work the
    Asamblea wants to attend to and upcoming faction leadership
    elections in May.

    ¶5.  (C) COMMENT:  We agree that an extension appears
    inevitable.  Under ideal conditions, the Asamblea could
    complete the first vote on the seven items now in the
    plenary o/a February 20.  The 30-day Sala IV review would
    still have to follow before the laws were enacted, however,
    and the two implementation items not yet in the plenary --
    the laws regulating insurance contracts and authors,
    copyright protections - would lag even further behind.  The
    earliest completion date for all the implementing
    legislation is therefore sometime in late March or April.
    END COMMENT.

    ============================================
    TESTING THEIR ARGUMENTS, TESTING THE WATERS
    ============================================

    ¶6.  (C) Minister of Foreign Trade Marco Vinicio Ruiz echoed
    these views during the Ambassador,s farewell call on
    January 7.  He opined that an EIF extension would be
    required, although he acknowledged that public discussion
    of such a request could dampen political momentum in the
    legislature.   Ruiz said he had already "reached out"
    informally to other CAFTA-DR parties to gauge their
    reaction to a possible extension request, and asked
    rhetorically when would be the appropriate time to make
    such a request.  The Ambassador urged Ruiz to consult with
    USTR on all aspects of the extension issue.  (NOTE:
    Confirming Ruiz,s comments about "reaching out," the media
    here has run interviews with CAFTA-DR officials such as the
    Guatemalan VM of Trade and the local Nicaraguan Ambassador
    predicting that their countries would respond favorably to
    a Costa Rican extension request.)

    ¶7.  (C) The Minister suggested that the U.S. should deal
    "differently" with Costa Rica, since the country has
    specific characteristics that set it apart from its
    neighbors; namely, the three-fold challenge of opening a
    state telecommunications monopoly, opening a state
    insurance monopoly, and a facing a constitutional review
    of all CAFTA-related legislation.  Ruiz fretted that the
    Sala IV might not be able to handle multiple pieces of
    complex, controversial legislation fast enough to complete
    its review in the required 30 days.

    ===============
    EXTENSION MANIA
    ===============

    ¶8.  (C) Despite his caution with the Ambassador, Ruiz
    later spoke to the press about an extension, predicting a
    two- to four-week delay.  His widely-reported remarks set
    off a flurry of political and press speculation prompting
    hasty spin control by the GOCR and its pro-CAFTA coalition
    partners.  An exasperated Antillon told Pol/Econ Counselor
    that Ruiz had spoken prematurely and without
    authorization.  Antillon and PUSC faction head Lorena
    Vasquez started a chorus of interviews, all stressing that
    the G38 would continue to work based on the March 1
    deadline.  Vasquez and ML chief Luis Barrantes, however,
    argued that should it appear that the Asamblea could not
    make the deadline, the GOCR should then explore extension
    options with the CAFTA-DR parties.

    ¶9.  (SBU) In back-to-back statements released January 8-9,
    Minister Arias stressed that the GOCR had not made any
    official request, and would continue to view February 29
    as the final day to complete legislative work in time for
    the March 1 EIF deadline.  He stressed the importance of
    having CAFTA-DR enter into force, praised the Asamblea for
    its hard work, and urged the PAC to respect the results of
    the October 7 referendum by not obstructing work in the
    legislature.  In interviews, both Arias brothers (the
    President and the Minister) said a possible extension
    depended on the PAC.  If that party (and its anti-CAFTA
    allies) dropped their delaying tactics, the legislature
    could move faster.  The GOCR would have a better idea of
    progress by the end of January, and if it had to request an
    extension, it would do so after that.

    ¶10. (U) In an interview on January 16, however, President
    Arias called the February 29 target date "unrealistic,"
    and suggested that the an extension request might come
    "in mid-February," depending on the legislative picture
    then.  He declined to specify how much more time would be
    needed (although he had told the media on January 8 that
    two more months would be sufficient.)

    ========
    COMMENT:
    ========

    ¶11.  (C) The specter of another legislative year frittered
    away by CAFTA debate seems to have galvanized the GOCR and
    the G38 into action.  The Arias administration is fully
    engaged, has a plan and is sticking to it.  The increasing
    public and political discussion of the post-CAFTA agenda
    (e.g., criminal justice reform, fiscal and concession
    reform, the so-called "development agenda," etc.) is a good
    sign.  Both sides, even the PAC, seem to be yearning
    for life after CAFTA.  Both sides also acknowledge that
    CAFTA-DR will enter into force for Costa Rica at some point.
    The questions are how and when. As to how, the GOCR appears
    confident enough to rely on its G38 coalition, for now;
    a deal with "moderate" PAC members is not in the cards.
    As to the when, we should know more when the Arias team
    takes stock in late January or early February.
    We understand that the COMEX delegation currently in
    Washington may raise the extension issue, but we do not
    expect a formal, fully-authoritative approach until the
    President -- or more likely Minister Arias -- weighs in,
    perhaps via a letter to USTR or a visit to Washington.

    LANGDALE

`