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Cablegate: Costa Rican Referendum Ratifies Cafta

VZCZCXYZ0010
PP RUEHWEB

DE RUEHSJ #1856/01 2892140
ZNR UUUUU ZZH
P 162140Z OCT 07
FM AMEMBASSY SAN JOSE
TO RUEHC/SECSTATE WASHDC PRIORITY 9040
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE PRIORITY
RUEHBO/AMEMBASSY BOGOTA PRIORITY 4131
RUEHPE/AMEMBASSY LIMA PRIORITY 1003
RUEHDG/AMEMBASSY SANTO DOMINGO PRIORITY 1566
RHEHNSC/NSC WASHDC PRIORITY

UNCLAS SAN JOSE 001856

SIPDIS

SENSITIVE
SIPDIS

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

E.O. 12958: N/A
TAGS: PGOV PREL PINR ETRD CS
SUBJECT: COSTA RICAN REFERENDUM RATIFIES CAFTA


1. (SBU) SUMMARY: In their first-ever national referendum,
Costa Ricans voted for ratification of CAFTA, 51.6% to 48.4%,
a margin of 49,400 votes with 98% of the vote tallied.
Turnout (nearly 60%) was well above the threshold to make the
referendum binding. The "Yes" vote won in four of seven
provinces, and in 48 of 81 cantones nationwide. In general,
it was not upper-middle class, university-educated voters
that voted against CAFTA in the largest percentages, but
voters in poorer, outlying areas. Final results await the
mandatory manual count, which should be completed before
October 20. Referendum day itself was a typically "Tico"
celebration of democracy, with no serious problems observed
or reported. Our preliminary assessment suggests that five
factors were key to the outcome: 1) the "Yes" advantage in
mobilizing their vote; 2) timely and effective USTR and White
House statements; 3) the perception that opposition leader
Otton Solis had overplayed his hand by drawing U.S. Congress
Members into the debate, and by taking a position which might
generate friction with the United States; 4) the last-minute
media push by the "Yes" campaign (featuring the USG
statements); and 5) the generally volatile atmosphere,
especially in the Central Valley, which magnified the impact
of (in this case, pro-CAFTA) media statements and popular
perceptions. Polling data, showing the "Yes" trailing days
before the vote, helped galvanize the pro-CAFTA campaign. By
approving a free trade agreement via referendum, Costa Rica
has made history, sending a clear signal around the region in
the process. The hardest challenge remains, however;
meeting the March 1, 2008 EIF deadline. END SUMMARY

===========================================
YES VOTE WINS IN CELEBRATION OF DEMOCRACY
===========================================

2. (U) Costa Ricans went to the polls on October 7 in the
first-ever national referendum and voted for ratification of
CAFTA. According to the Supreme Election Tribunal,s (TSE)
preliminary results, the "Yes" vote won by 51.6% to 48.4%, a
3.2% margin (approximately 49,400 votes). Turnout (nearly
60%) was lower than in the 2006 presidential elections, but
well above the 40% threshold to make the referendum binding.
Over 1.57 million voters participated. (For comparison, 2.55
million voters, or 65%, voted in 2006, with the margin of
victory for President Oscar Arias 19,169 votes or 1.1%.)

3. (U) The "Yes" vote won in four of seven provinces, and in
48 of 81 cantones nationwide. Cartago (home to "No leader
Eugenio Trejos) was the only province in which "Yes" won in
all cantones, probably fueled by the support of
export-dependent farmers. This same province also produced
the widest "Yes" margin both in actual count (over 25,000
votes) and in relative terms (13%). In Limon province, where
Costa Rica's major port depends on trade, the "Yes" carried
the day in all cantones but one -- isolated,
mostly-indigenous Talamanca. Alajuela produced the widest
"No" margin (over 6,100 votes). However, on a percentage
basis, Pacific coast Guanacaste posted the widest "No" margin
(over 5%). Perez Zeledon, a canton within the province of
San Jose and the home of opposition PAC leader Otton Solis,
voted strongly "No" (63.5%).

4. (U) Referendum day was a typically Tico celebration of
democracy. Families voted together after attending Sunday
mass, caravans (for both sides) circulated through
neighborhoods waving flags and honking horns, and there were
no serious problems. Embassy staff reporting from around the
Central Valley and participating in the OAS Observer Mission
noted no irregularities. The only incident involved
flag-burning by an anti-CAFTA group of University of Costa
Rica students, after the results were announced election
night. Despite the high emotions which sometimes
characterized the campaign, by the next day it was calmly
back to business as usual around the country.

=======================
POOR STATE, RICH STATE?
=======================

5. (U) In general, it was not upper-middle class,
university-educated voters that voted against CAFTA in the
largest percentages, as suggested in pre-referendum polling,
but voters in poorer, outlying areas around the country,
especially in Guanacaste, Alajuela and southern Puntarenas
provinces. Based on UN poverty data, seven of the 10 poorest
cantones voted "No." Not surprisingly, nine of the 10
wealthiest cantones, mostly in the Central Valley around San
Jose, voted "Yes."8 On the other hand, the strongest "Yes"
and "No" percentages were both from rural areas (Siquirres in
Limon voted 67.6% yes; San Ramon in Alajuela voted 72.2% no).
Of note, the six Pacific Coast cantones most dependent on
tourism split, with "Yes" and "No" each winning in three. In
contrast to some pre-referendum analysis, higher
abstentionism did not always mean a higher "No" vote. Limon
had the lowest voter participation rate (45.3%), but the
province voted "Yes". Alajuela had a high participation rate
(62.6%), but voted "No".

6. (U) The results reflect 98% of the votes counted. The
final tally awaits the mandatory manual count, which has been
proceeding smoothly since starting on October 9, and which
should be completed before October 20, according to the TSE.
The manual count is not expected to change the preliminary
results, and the Comptroller and the Supreme Court's
Constitutional Chamber (Sala IV) have endorsed the way the
referendum was conducted. Even PAC party leader Solis has
conceded publicly that the margin of victory was too large to
have been the result of manipulation. (The PAC and other
CAFTA opponents have filed a number of procedural complaints
with the TSE, however.) Once the results are final, the TSE
will return CAFTA-DR to the Asamblea (national legislature)
for routine publication in the official Gazeta. Once
gazetted, CAFTA becomes law in Costa Rica.

============================================= ====
MULTIPLE FACTORS, INCLUDING USG STATEMENTS, HELP
============================================= ====

7. (SBU) What went right? Why did the "Yes" win when the
picture (and polling) seemed tilted against CAFTA until the
last days before the referendum? Our preliminary assessment,
early soundings with some key players on both sides, and
their comments to the media, suggest five key factors:

-- First, the "Yes" side had a clear advantage in mobilizing
their vote. Campaign Director Alfredo Volio saw this as a
decisive comparative advantage. Embassy observers agreed.
Although "No" supporters seemed to be present and active in
and near polling stations early in the day, by the
afternoon, the clearly-marked "Si" convoys were bringing a
steady stream of voters to the polls;

-- Second, the USTR and White House statements, slamming the
door on a re-negotiated CAFTA, were timely and effective,
according to Volio, GOCR Ambassador to the US Tomas Duenas,
local diplomatic colleagues and PAC legislator Francisco
Molina, who candidly acknowledged their impact in a meeting
with Pol/C on October 12;

-- Third, according to Volio, voters perceived that
opposition leader Solis had overplayed his hand by drawing
U.S. Congress Members into the Costa Rican debate, and, as
suggested by the USG statements, by taking a position which
might generate friction with the United States if CAFTA were
not ratified, friction the conservative, mostly pro-US Costa
Rican electorate did not want to risk;

-- Fourth, the last-minute media push by the "Yes" campaign.
Volio believes this was especially effective in the
media-saturated Central Valley, where 26 of 31 cantones (and
over 518,000 voters) supported ratification. Again, this was
helped by the last-minute USG statements. The GOCR generated
coverage simply by pointing to, or commenting on the
statements. The PAC's Molina, like Solis and other "No"
supporters, argue that this coverage and the attendant
interviews with GOCR officials violated TSE prohibitions on
campaigning in the final 48 hours before the referendum.
(COMMENT: The TSE rules were actually fairly loose,
permitting media interviews in the days immediately prior to
the referendum. Both sides took advantage of this
flexibility. END COMMENT.)

-- Fifth, the pre-referendum atmosphere was volatile, as
noted by political commentator Constantino Urcuyo and others.
This magnified the impact of any development, including of
the factors outlined above, although the specific difference
they made would be difficult to quantify.

======================
WHAT ABOUT THE POLLS?
======================

8. (SBU) Was the polling wrong? What explains a swing from
as much as 12 points behind days before the referendum to a
3.2 point victory? Given the clear margin of victory for the
"Yes" and Solis, deciding not to challenge the results, the
debate over the accuracy of the pre-referendum polling has
been far less contentious than the debate over survey data
before the 2006 national elections. In an Op-ed on October
10 , CID Gallup director Carlos Denton claimed that his data,
published in late July (and showing a 44-38 lead for "Yes,"
with 18% undecided and a 3% margin of error) generally held
true throughout the campaign, despite the apparent ups and
downs of the final weeks. Some media reports speculated that
Costa Ricans, notoriously misleading in their responses to
pollsters, especially on highly controversial issues such as
CAFTA, may have masked their support for "Yes" to avoid
reprisals from more argumentative "No" voters.

9. (SBU) La Nacion Managing Director Alejandro Urbina, who
commissioned the series of UNIMER polls which showed a sharp
drop for the "Yes" vote before the referendum, stands by his
data and analysis. He told Pol/C and PAO on October 5 that
the UNIMER data (showing the "Yes" trailing), plus the USTR
statement on October 4, plus superior logistical planning and
capabilities should galvanize the pro-CAFTA vote and make the
difference in the end. Even so, less than 48 hours before
the polls opened, Urbina was not certain of the outcome. The
internal UNIMER numbers at that time (not released to the
media) suggested a "Yes" vote between 42.5 and 49.5% and a
"No" vote between 50 and 57%. The key, he said, would lie in
the 13% of those surveyed who had consistently not indicated
to UNIMER how they would vote.

======================================
COMMENT: SO WHAT DOES ALL THIS MEAN?
======================================

10. (SBU) Hyperbole aside, this was an historic event,
replete with drama and irony. Costa Rica has now done
something no other country has done; approve a free trade
agreement by referendum. In so doing, Costa Rica sent a
clear signal around the region. It is significant that
almost 800,000 voted in favor of CAFTA, an outright majority
of those participating, and that turnout was 50% higher than
required for the vote to be binding. The drama was in the
close count (or the expectation of same) up until the very
end. Ticos with us on election night were visibly worried
until just before the TSE started to release results. By the
time President Arias arrived at the Casa Presidencial to
watch the returns, however, the backslapping, applause and
broad grins signaled a likely win for "Yes," even though the
official TSE announcement was an hour away. The irony came
from the pre-referendum visit by two anti-CAFTA Members of
Congress, which (unintentionally) generated a series of
letters and statements in Washington ultimately helping the
"Yes" vote. Now, the hardest challenge remains; to enact the
relevant legislation and implement the required regulations
to meet the March 1, 2008 EIF deadline (septel).
BRENNAN

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