US embassy cable - 05SANJOSE2460

UNCLAS SECTION 01 OF 02 SAN JOSE 002460 
 
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: PRESIDENT PACHECO SENDS CAFTA-DR TO THE ASSEMBLY TO 
BEGIN THE RATIFICATION PROCESS 
 
REF: (A) SAN JOSE 02389 
 
     (B) SAN JOSE 02008 
     (C) SAN JOSE 02436 
 
1.  (SBU) Summary.  After meeting with his cabinet in the 
morning of October 21, 2005, President Pacheco announced 
that he would send the United States-Central American- 
Dominican Republic Free Trade Agreement (CAFTA-DR) to the 
Legislative Assembly later that day to start the 
ratification process.  This marks the end of Pacheco's 
delay in moving forward on the ratification of CAFTA-DR in 
Costa Rica and the beginning of what will probably be a 
long legislative process that will include debate in the 
Assembly's International Relations Committee, at least two 
votes by the entire 57-member Assembly, and a review by the 
country's Constitutional Court (Ref B) - all of this in the 
midst of the February 2006 Presidential and Legislative 
elections.  End Summary. 
 
2.  (U) In the press conference after the October 21 cabinet 
meeting, in which President Pacheco was accompanied by Vice 
President Lineth Saborio and Foreign Trade Minister Manuel 
Gonzalez, Pacheco announced that Gonzalez would deliver 
CAFTA-DR to President of the Assembly Geraldo Gonzalez later 
that same day.  President Pacheco made a point to say that 
the 14 months that have elapsed since he signed CAFTA-DR was 
not lost time but was the time needed to educate Costa 
Ricans on the agreement and its implications and to start 
the debate.  He said that Costa Ricans have become much more 
knowledgeable about the agreement, and he cited the recent 
CID/Gallup poll results as evidence (Ref C).  He also 
elaborated on the numerous meetings that the Administration 
has had with various groups about their views on CAFTA-DR. 
 
3.  (SBU) "What has happened today with the delivery of 
CAFTA-DR to the Assembly is that the forum of the debate has 
changed - from the executive to the legislative branch," 
said Pacheco.  When asked if Costa Rica could possibly be 
ready to join the other CAFTA-DR countries for a proposed 
January 1, 2006 implementation date, President Pacheco 
answered that the issue is now in the hands of the Assembly, 
but it was probably impossible given that CAFTA-DR will not 
go to the International Relations Committee until November, 
and the Assembly not being in session from before Christmas 
until after the February 5, 2006 elections.  (Comment: 
President Pacheco sets the Assembly's legislative priorities 
during the upcoming extraordinary session from December 1 
through April 30, and, in response to a question asked at 
the press conference, his priority is clearly the Fiscal 
Reform bill.  CAFTA-DR seems to be third on his priority 
list after the recently submitted proposed law to strengthen 
the Costa Rican Institute of Electricity (ICE) which he said 
must be approved prior to ratifying CAFTA-DR.  End Comment.) 
 
4.  (U) He also responded that "there is no hurry" and that 
"he does not know why everyone wants to rush this issue." 
"Costa Rica is different and we take our time to do things 
right," he added.  When asked if he had any doubts about 
CAFTA-DR, he said, "I have doubts like everybody."  He 
repeatedly stressed that CAFTA-DR is an instrument that 
Costa Rica can use to further development - an instrument 
that one must be prepared to use to its fullest extent. 
Pacheco said that the complementary agenda, the funding of 
which the Administration has already presented to the 
Assembly for approval, is very important to ensure that all 
Costa Ricans benefit from implementation of CAFTA-DR. 
Pacheco acknowledged that the work has just begun - that 
Costa Rica needs to make changes in its administration, 
infrastructure, etc., to take advantage of the opportunities 
presented by CAFTA-DR. 
 
5.  (U) When asked about what he would say to those CAFTA-DR 
opponents such as some labor union representatives and 
university students who have threatened strikes and 
protests, President Pacheco said that Costa Rica is a 
country of laws - that by law it was his duty to send the 
agreement to the Assembly for debate and discussion.  "To 
not have done so," he said, "I would have been acting as a 
dictator in unilaterally deciding yes or no on CAFTA-DR." 
He stressed that Costa Rica is a democracy and he called for 
a wide-reaching, meaningful, and peaceful debate in the 
Assembly and the country.  Pacheco stressed the peaceful 
nature and history of Costa Rica. 
 
6.  (U) President Pacheco and Minister Gonzalez stressed the 
need for Costa Rica to take part more fully in the world 
economy.  "We cannot isolate ourselves," said President 
Pacheco.  "Thousands of jobs depend on exporting products 
and providing services to the world market," said Gonzalez. 
Gonzalez said that he was happy to join Costa Rica's 
"brother countries" in this agreement not only to realize 
benefits with trade with the U.S. but also with the other 
Central American countries and the Dominican Republic. 
 
-------------------------- 
IMPLEMENTATION LEGISLATION 
-------------------------- 
 
7.  (U) As part of his presentation, President Pacheco said 
he "has faith in ICE" and that it is his requirement that 
the Assembly pass the law to strengthen ICE prior to 
ratifying CAFTA-DR.  One reporter referred to the fact that 
there are some Assembly members who are clearly in favor of 
CAFTA-DR but not in strengthening ICE.  When this reporter 
asked the President how he would ensure that the law to 
strengthen ICE would be passed in light of this possible 
opposition, President Pacheco said "Well, it is up to the 
Assembly, and we will have to see what happens."  President 
Pacheco gave the same answer when asked if all of these 
projects can be submitted, reviewed, discussed, and voted 
upon in the little time left before the new President and 
Assembly members take office on May 8, 2006.  Vice 
President Saborio did say that the Assembly should decide 
on October 24, 2005, how the law to strengthen ICE will 
proceed. 
 
8.  (SBU) In response to a question regarding when the 
proposed laws to comply with the telecommunications and 
insurance market provisions of CAFTA-DR, i.e., gradually 
opening these markets and effectively regulating them, 
would be submitted, Saborio said that both are under review 
by the Administration and they should be sent to the 
Assembly "in a few weeks".  (Comment:  The Administration 
has been saying for months that these bills would be ready 
"in a few weeks" with no result yet.  Appropriate 
legislation is necessary in these and other areas in order 
to comply with the requirements of CAFTA-DR.  End Comment.) 
 
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COMMENT 
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9.  (SBU) President Pacheco has decided that now is the 
appropriate time to send CAFTA-DR to the Assembly and start 
the relatively long ratification process.  This marks the 
beginning of a sure-to-be intense and complex debate given 
the number of legislative projects that need to be 
discussed and reviewed, the limited amount of time in which 
to do all of this, and the politically charged environment 
not only surrounding CAFTA-DR-related issues but also the 
Presidential and Legislative elections. 
FRISBIE