US embassy cable - 05SANTODOMINGO456

UNCLAS SECTION 01 OF 02 SANTO DOMINGO 000456 
 
SIPDIS 
 
STATE FOR WHA/CAR, WHA/EPSC, EB/TPP/BTA, EF/IFD/OMA; STATE 
PASS AID/LAC; NSC FOR SHANNON AND MADISON; LABOR FOR ILAB; 
TREASURY FOR OASIA-LCARTER, RTOLOUI, DDOUGLASS; COMMERCE 
FOR USPTO 
 
E.O. 12958: N/A 
TAGS: DR, EFIN, KIPR, PREL 
SUBJECT: DOMINICAN TECHNICAL SECRETARY OPTIMISTIC ON CAFTA 
RATIFICATION, BROADCAST PIRACY AND IMF STANDBY AGREEMENT 
 
REF: SANTO DOMINGO 6915 
 
1. (SBU) Summary:  Dominican Technical Secretary Temistocles 
Montas told the DCM January 28 that President Fernandez will 
present the Central American Free Trade Agreement (CAFTA-DR) 
for ratification during the annual presidential address to 
Congress on February 27, saying that that agreement is 
absolutely essential to the country's future.  He agreed that 
protection of intellectual property rights is an important 
element of the agreement and that stopping television 
broadcast piracy should receive greater attention.  Montas 
said that President Fernandez is optimistic that the IMF,s 
Executive Board will approve a new Standby Agreement for the 
Dominican Republic when it meets January 31, and commented 
that the Standby will transform the Dominican economy when 
fully implemented. 
 
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CAFTA to move forward 
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2. (SBU) Dominican Technical Secretary Temistocles Montas 
told the DCM January 28 that President Fernandez will present 
the Central American Free Trade Agreement (CAFTA) for 
ratification during the annual presidential address to 
Congress on February 27, adding that the administration will 
be pressing all sectors to support the free trade agreement 
as essential to the country's economic growth and stability. 
He said that being left out would be "disastrous" for the 
country.  Montas said that a group of senators, including 
Senate President Andres Bautista, traveled last week to Chile 
to discuss aspects of the free trade agreement with the 
United Nations, Economic Commission for Latin America and 
the Caribbean (ECLAC).  ECLAC,s message was that the 
Dominican Republic could not afford to be left out of CAFTA 
and  Montas said that the Fernandez administration is 
prepared to take the necessary steps to see that the 
agreement is approved by congress. 
 
 
3. (U) Explaining the dynamics for ratification of the 
agreement in U.S. Congress, the DCM told Montas that 
intellectual property rights infringement and specifically 
television broadcast piracy was a continuing concern in the 
United States.  Secretary Montas acknowledged that broadcast 
piracy was a long running problem that potentially threatened 
President Fernandez,s agenda to make the Dominican Republic 
a top choice for film companies searching for new locations. 
He agreed that broadcasters violating IPR should be held 
accountable and assured the DCM that his office would 
instruct the Dominican Institute of Telecommunications 
(Indotel) to take appropriate steps to stop piracy.  He asked 
for a list of television channels and others who were acting 
illegally.  The Embassy is following up. 
 
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Benefits of a new IMF Standby Agreement 
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4. (SBU) The IMF,s Executive Board is scheduled to review a 
new  Standby Agreement for the Dominican Republic on January 
31, and Montas expects it to pass without difficulty now that 
a couple of last-minute problems have been resolved.  Montas 
said that relatively minor amounts of Dominican arrears with 
official creditors in Spain and Canada were recently 
discovered for which the current administration could find no 
records.  He lamented that controls had slipped to such a 
degree under the Mejia administration and that loan approvals 
were bypassing the Technical Secretariat and being approved 
directly by the Minister of Finance.  Despite what Mejia's 
Finance Ministry had maintained, he said the majority of 
loans were not taken from international financial 
institutions at favorable rates, but were made by private 
banks with less transparency and at higher costs. 
 
5. (SBU)  Montas said that the IMF agreement would help 
reestablish economic growth and stability.  Perhaps most 
importantly in Montas's opinion, the agreement will force 
institutional reform.  The program, he said, will change the 
way the government manages the economy, reducing the 
president,s inordinate decision-making power regarding 
lending and granting greater independence to the Banking 
Superintendency.  The new IMF agreement will require the 
government to clarify the decision-making process for loan 
approvals and will help avoid the free spending habits of the 
previous administration.  Montas stated that with the changes 
envisioned in the new agreement, the current administration 
will be in a position in four years to hand over a government 
structure completely different and improved from the one it 
inherited. 
HERTELL