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### Viewing cable 05SANJOSE2908, CODEL BLUNT URGES PROMPT RATIFICATION OF CAFTA-DR

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
05SANJOSE2908 | 2005-12-22 10:31 | 2011-03-03 16:00 | 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 03 SAN JOSE 002908

    SIPDIS

    SENSITIVE

    E.O. 12958: N/A
    TAGS: OREP PREL ETRD CS
    SUBJECT: CODEL BLUNT URGES PROMPT RATIFICATION OF CAFTA-DR

    Summary
    --------
    ¶1. (SBU)  In a meeting with Costa Rican legislators on
    December 19, the members of CODEL Blunt delivered a two-fold
    message: the United States will not renegotiate CAFTA-DR on a
    bilateral basis with Costa Rica; and the benefits Costa Rica
    now receives under the Caribbean Basin Initiative (CBI) will
    fall away whether Costa Rica ratifies CAFTA-DR or not.  The
    CODEL also met with members of the GOCR cabinet and the
    president of the central bank, and were hosted for dinner by
    the American Chamber of Commerce.  The visit received wide
    and favorable press coverage.  Embassy is following up on the
    visit with activities to hasten ratification of CAFTA-DR in
    Costa Rica.  End Summary.

    Meeting with Counterparts
    -------------------------
    ¶2. (U)  CODEL Blunt arrived in Costa Rica early in the
    afternoon of December 19.  Members of the CODEL were:
    Roy Blunt (R-MO); Solomon Ortiz (D-TX); Mark Foley (R-FL);
    Ruben Hinojosa (D-TX); Gregory Meeks (D-NY); Dennis Moore
    (D-KS); and Mike Conaway (R-TX).

    ¶3. (U)  The CODEL's first meeting was at the Legislative
    Assembly and with the members of the International Relations
    and Trade Committee, which is now holding hearings on
    CAFTA-DR.  Rolando Lacle, president of the committee,
    presided.  With him were Laura Chinchilla, Luis Ramirez,
    Federico Malavassi, Bernal Jimenez, Ruth Montoya, Juan Jose
    Vargas, Mario Calderon, Gerardo Vargas, Carlos Salazar, and
    Epsy Campbell.

    ¶4. (U)  Representative Blunt opened the discussion by noting
    that the delegation of four Democrats and three Republicans
    all voted in favor of CAFTA-DR, but only after a hard-fought
    and vigorous debate in Congress.  In the end, a majority of
    Congress recognized the importance of strengthening the bonds
    with our neighbors through increased and freer trade.

    Costa Rican Concerns
    --------------------
    ¶5. (U)  Laura Chinchilla, vice presidential candidate in the
    February 6, 2006, elections, said that Costa Rica wants to
    compete and export, not receive aid.  She said that her
    party, the National Liberation Party (PLN), wants to ratify
    CAFTA-DR as quickly as possible, but that the administration
    has been obstructing discussion of the treaty.

    ¶6. (U)  Luis Ramirez, also of the PLN, raised two questions
    for the U.S. Congressmen:  how much longer will the United
    States subsidize its farmers, and why not negotiate a
    bilateral free trade agreement between the United States and
    Costa Rica?

    ¶7. (U)  Federico Malavassi of the Libertarian Movement Party
    said that his party not only supports CAFTA-DR, but wishes
    that the treaty had gone further to eliminate trade barriers
    in the region and with the United States.  He said he was
    disappointed that Costa Rica was so slow in ratifying an
    agreement that was so obviously beneficial.

    ¶8. (U)  PLN legislator Bernal Jimenez asked whether in the
    future it would be possible to renegotiate some aspects of
    CAFTA-DR.

    ¶9. (U)  Ruth Montoya of the Citizens' Action Party (PAC),
    which opposes CAFTA-DR, noted that President Bush, according
    to President Pacheco, said that Costa Rica should "take its
    time" in ratifying CAFTA-DR.  She said her party was not
    against free trade, per se, citing its support for the free
    trade agreement with Canada, but is against CAFTA-DR.

    ¶10. (U)  Juan Jose Vargas, who recently founded a new party
    and is now a minor candidate for president, complained that
    CAFTA-DR is surrounded by ignorance, divisiveness,
    propaganda, and lies.  He said there had been a total lack of
    transparency during negotiations and that the
    telecommunications and insurance sectors became subjects of
    negotiations only at the last minute and under extreme
    pressure.  He said maintaining social peace is more important
    than free trade.

    ¶11. (U)  Mario Calderon said that his Social Christian Unity
    Party (PUSC) supports CAFTA-DR but is troubled by the
    question of U.S. subsidies.

    ¶12. (U)  Gerardo Vargas of PAC said that CAFTA-DR will hurt
    small business in Costa Rica, especially farmers, and put at
    risk the nation's "food security."  If CAFTA-DR passes, he
    said, Costa Rica will be at the mercy of U.S. farmers.  He
    urged renegotiation of the treaty and the continuation of CBI
    benefits for Costa Rica.

    CODEL Responds
    --------------
    ¶13. (U)  Representative Blunt said that the U.S. Congress's
    vote on CAFTA-DR was its most important foreign policy vote
    for the hemisphere in more than a decade.  The idea was to
    replace a temporary, unilateral concession (CBI) with a
    permanent, negotiated, mutually-binding agreement (CAFTA-DR).
     CBI will not last, he said, and if Costa Rica rejects
    CAFTA-DR, the United States will not then negotiate a
    separate bilateral agreement with Costa Rica.

    ¶14. (U)  Representative Ortiz said that his vote in favor of
    CAFTA-DR was influenced by his border district's positive
    experience with NAFTA.  He said that before NAFTA,
    unemployment in his district was 22 percent; today it is 6
    percent.  He noted that people are always afraid of change.

    ¶15. (U)  Representative Foley said that there was a lot of
    pressure on him in his sugar-growing district to vote against
    CAFTA-DR.  But he was persuaded by President Bush to think
    about how important trade and economic development were to
    ensure peace and stability in Central America.  He said Costa
    Rica must ratify CAFTA-DR now and not gamble on some
    theoretical future, better agreement.  He said, "Free trade
    agreements in the United States will not get easier to pass,
    but only harder."  He said it is important for politicians to
    put their country's interests above their own political
    self-interest as he had done.

    ¶16. (U)  Representative Hinojosa, like Ortiz from a Texas
    border district, said that employment in his district
    improved dramatically with the implementation of NAFTA; there
    are more and better jobs.  He said it was not realistic for
    Costa Rica to hope for a new, separate, bilateral treaty; it
    will not happen, he said.  Costa Rica had to get on the train
    now because it is leaving the station.

    ¶17. (U)  Representative Moore said that trade not only brings
    economic benefits, but also helps consolidate democracy.  He
    said that CBI is a temporary measure and will not be extended
    for Costa Rica.  He said that former President Carter's
    letter which characterized CAFTA-DR as an opportunity to help
    fledging democracies was influential in his decision to vote
    in favor of the agreement.

    ¶18. (U)  Representative Meeks said that Costa Rica, because
    of the level of education of its people, stood to benefit
    more from CAFTA-DR than any other country.  He said
    renegotiation of the treaty was out of the question and that
    CBI benefits will be phased out.  He reminded the Costa Rican
    legislators that in negotiations neither side gets what it
    considers to be the perfect result.  He said they should
    trade "short-term pain for long-term gain;" the question is
    whether their children will be better off with or without
    CAFTA-DR.  Meeks said it is clear that while CAFTA-DR will
    not solve all of Costa Rica's economic problems, "it is a
    giant step in the right direction."

    ¶19. (U)  Representative Conaway urged the Costa Rican
    legislators to consider what is in the best interest of their
    country as a whole and to "push back" against special
    interest groups.  He said there must be no illusions that
    CAFTA-DR will be renegotiated or that CBI will go on forever.
     He noted that the U.S. Congress voted the night before to
    eliminate subsidies across the board in 2007.

    Press Conference
    -----------------
    ¶20. (U)  In a press conference immediately following the
    roundtable discussion with Costa Rican legislators,
    Representative Blunt reiterated that the United States wanted
    Costa Rica to be a part of CAFTA-DR, but that the Costa
    Ricans would have to make their own decision in that regard.
    Representative Meeks said that Costa Rica will benefit from
    CAFTA-DR and noted that several Caribbean countries also want
    a free trade agreement with the United States.
    Representative Hinojosa stressed the benefits of NAFTA in his
    district where in the last 12 years unemployment dropped from
    22 percent to 8 percent, despite population growth during
    that period of 48 percent.

    Evening Events
    --------------
    ¶21. (U)  In the evening the CODEL attended a reception at the
    Ambassador's residence and met with Ministry of the Economy
    Gilberto Barrantes, Acting Minister of Foreign Trade Doris
    Osterlof, Vice Minister of Foreign Affairs Marco Vinicio
    Vargas, adviser to the Economic Council Pedro Quiros, and
    Central Bank President Francisco de Paula Gutierrez.
    Following the reception, the Costa Rican-American Chamber Of
    Commerce (AmCham) hosted the CODEL for dinner.  The CODEL
    departed the morning of December 20 for El Salvador.

    Press Coverage
    --------------
    ¶22. (U)  The CODEL's principal message was featured in the
    headlines of articles in Costa Rica's December 20 daily
    newspapers, as follows.  La Nacion: Congressmen reaffirm that
    CAFTA renegotiation is improbable.  La Republica: U.S.
    Congressmen indicate that bilateral renegotiation is not an
    option.  La Prensa Libre: U.S. Congressmen say, "CAFTA cannot
    be renegotiated."  Al Dia: No to renegotiation.  Both La
    Nacion and La Republica had long articles on December 21
    pointing out the dire consequences for Costa Rican exports if
    CBI were to be terminated.

    ¶23. (U)  On December 21, several commentators noted that the
    CODEL took the wind out of the sails of CAFTA-DR's main
    opponent in Costa Rica, PAC presidential candidate Otton
    Solis, who has been claiming that the treaty can and must be
    renegotiated.  Solis himself, however, was undaunted, saying
    that regardless of what the CODEL members said, CAFTA-DR can
    be modified to protect small and medium-sized businesses in
    Costa Rica.  Solis's companion on the ticket as candidate for
    vice president, Epsy Campbell, told the press that the U.S.
    representatives were trying to put undue pressure on Costa
    Rica, but in fact they had nothing new to say.  (Campbell
    arrived late at the roundtable with the CODEL and did not
    speak.)

    ¶24. (U)  At the same time that the CODEL members were meeting
    with their Costa Rican counterparts, USTR released its 12/19
    statement regarding CAFTA-DR's entry into force.  What
    particularly attracted the attention of the Costa Rican press
    was the part of the statement noting "a seamless transition"
    between CBI and CAFTA-DR and that existing preferences would
    continue to be enjoyed only "during a brief transition
    period."  The statement undercut a main argument of CAFTA-DR
    opponents in Costa Rica, namely that CAFTA-DR was unnecessary
    because Costa Rica already had, and would continue to have,
    CBI.

    Comment
    -------
    ¶25. (SBU)  The USTR statement along with the comments of the
    CODEL members made crystal clear what the Embassy has been
    telling the GOCR, the legislature, and the press all along --
    CBI is not forever, and CAFTA-DR will not be renegotiated
    with Costa Rica.  We know that two thirds of the legislature
    and two thirds of the population support CAFTA-DR.  The
    problem here has been a feckless and indecisive president who
    refused to send CAFTA-DR to the legislature until late
    October, thus starting a process of ratification that
    normally takes at least six months.  Embassy plans to follow
    up the very successful CODEL and USTR announcement with a
    concerted push to get the legislature to act quickly.  The
    first step will be an exclusive interview of the Ambassador
    with La Nacion, Costa Rica's leading daily newspaper.

    ¶26. (U) This cable was not cleared by the CODEL.
    LANGDALE

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