US embassy cable - 05SANJOSE2038

UNCLAS SECTION 01 OF 02 SAN JOSE 002038 
 
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: COALITION OF DEPUTIES URGE PRESIDENT TO MOVE 
FORWARD ON CAFTA-DR 
 
REF:  (A) San Jose 01828 
      (B) San Jose 01455 
      (C) San Jose 01692 
      (D) San Jose 02008 
 
1.  (U) Summary.  On August 29, 2005, thirty-eight of the 
57 members (deputies) of the Costa Rican Legislative 
Assembly signed a letter to President Pacheco urging him to 
send the United States-Central American-Dominican Republic 
Free Trade Agreement (CAFTA-DR) to the legislative body 
immediately.  Assembly members from the President's Social 
Christian Unity Party (PUSC), the National Liberation Party 
(PLN), the Libertarian Movement Party (ML), and two 
independent deputies signed the letter.  This effort was 
spearheaded by the Assembly President, Gerardo Gonzalez 
(PUSC).  The letter expressed the deputies' concerns about 
delaying the ratification process of the agreement that 
could "forge the development of the country."  In a related 
story, the Administration on the same day officially 
submitted its complementary agenda to the Assembly.  End 
Summary. 
 
2.  (U) The letter was signed by all but three of the 19 
PUSC deputies.  Ricardo Toledo, the PUSC presidential 
candidate for the February 2006 elections, said he 
supported the letter but could not sign because he was 
absent from the legislative session.  All 15 of the PLN 
members signed the letter, as well as all five of the ML 
deputies, and two independents.  The theme of the letter 
was the vital need to move ahead on CAFTA-DR by allowing 
the deputies to officially start discussions on the 
agreement. 
 
3.  (U)  Gerardo Gonzalez is still discussing the 
possibility of a deputy introducing the agreement to the 
Assembly instead of waiting for the President to submit it. 
Various dailies on August 29, 2005, reported that Gonzalez 
was preparing to investigate this option with the 
Constitutional Court if the President does not respond to 
the deputies' written request.  (Note:  Most constitutional 
and political experts believe that only the President or a 
Minister of his Administration has the constitutional right 
to present such an international agreement to the 
Assembly.) 
 
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COMPLEMENTARY AGENDA OFFICIALLY SENT TO THE ASSEMBLY 
--------------------------------------------- ------- 
 
4.  (U)  In a related issue, the Administration officially 
presented its complementary agenda to the Assembly on 
August 29, 2005 (Ref C).  The complementary agenda is 
mainly funded through loans.  (Note: The Assembly is 
required to approve all new state debt, and as such has 
effective control over when and if this essential part of 
the CAFTA-DR package advances.)  Reportedly, the 
Administration had planned to presented the complementary 
agenda in a formal public ceremony.  However, due to the 
inability to coordinate various Ministers' schedules, the 
public event was cancelled.  Gilberto Barrantes, Minister 
of the Economy and Chair of the President's Economic 
Council, addressed the press on this issue. 
 
5.  (U)  Minister Barrantes did not provide much more 
detail than was previously released about the complementary 
agenda.  In general, the complementary agenda is planned as 
a series of coordinated projects over the next five years 
to increase the global competitiveness of Costa Rican 
businesses so that they can take advantage of the 
opportunities presented by CAFTA-DR.  Improving rural roads 
and highways, increasing efficiency of small- and medium- 
size businesses, streamlining of governmental processes, 
implementing educational initiatives, and helping promote 
sustainable agriculture are some of the projects integral 
to the complementary agenda.  Funding will be provided by 
loans from the Inter-American Development Bank (IADB) 
(loans of USD 117 million and USD 15 million), the World 
Bank (USD 30 million), and the Central American Bank of 
Economic Integration (BCIE)(USD 47 million).  The GOCR will 
contribute USD 136 million towards these projects. 
 
--------------------------- 
COMMENT - BUILDING PRESSURE 
--------------------------- 
 
6.  (SBU) It is clear that a strong majority of the 
deputies feel a sense of urgency to start the long process 
of ratifying CAFTA-DR in Costa Rica.  We believe that the 
number of deputies signing the letter (precisely two-thirds 
of the Assembly) is a measure of the level of support in 
the Costa Rican legislature and indicates that CAFTA-DR 
will be passed eventually.  Press coverage of the U.S. 
Congress's approval of CAFTA-DR was intense and focused 
attention on the lack of progress in the ratification 
process in Costa Rica.  The recent approval by the Senate 
of the Dominican Republic seems to have refocused attention 
on inertia here.  The sending of the complementary agenda 
to the Assembly is a step in the right direction.  However, 
the Administration is still lagging behind in sending the 
implementation agenda, i.e., the legislation necessary to 
comply with the terms of the agreement such as providing 
for the gradual opening of the telecommunications and 
insurance markets.  Post doubts that this increased 
pressure will be sufficient to move the Administration to 
action before the Eminent Persons Group studying the 
agreement releases its report o/a September 16 (see 
septel). 
FRISBIE