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Cablegate: Costa Rica: Austr Sets True Timeline for Cafta

VZCZCXYZ0000
PP RUEHWEB

DE RUEHSJ #0410/01 1382158
ZNR UUUUU ZZH
P 172158Z MAY 08
FM AMEMBASSY SAN JOSE
TO RUEHC/SECSTATE WASHDC PRIORITY 9726
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC PRIORITY

UNCLAS SAN JOSE 000410

SENSITIVE
SIPDIS

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

E.O. 12958: N/A
TAGS: ECON ETRD KIPR PGOV PREL CS
SUBJECT: COSTA RICA: AUSTR SETS TRUE TIMELINE FOR CAFTA
IMPLEMENTATION

1. (U) SUMMARY. AUSTR Everett Eissenstat met with GOCR officials on
April 24 and discussed several issues surrounding CAFTA-DR
implementation status including the shrinking timetable; the need to
ensure full CAFTA-DR compliance; remaining substantive issues,
including the areas of insurance, intellectual property, and
bidiversity; and USTR's willingness to commit resoures, including
sending a technical team to Costa ica, to "close out"
implementation. The GOCR enthusiastically responded to the AUSTR's
offer of snding a team to Costa Rica to work on technical isues.
The GOCR also acknowledged the AUSTR's explnation of the shrinking
timetable. The true woring deadline, when accounting for USTR
certification and the GOCR's Sala IV review process, is early July.
All the remaining CAFTA-DR implementing legislation should really be
completed by then in order to ensure entry-into-force by October 1.
END SUMMARY.

--------------------------------------------- ---
MEETING THE MNSTER OF THE PRESIDENCY AND THE VP
--------------------------------------------- --

2. (U) Minster of the Presidency Rodrigo Arias and Vice Presiden
Laura Chinchilla hosted a lunch for the AUSTR o April 24. Also
attending for the GOCR were Foregn Trade Minister Marco Vinicio
Ruiz, Ambassadorto the U.S. Tomas Duenas, Vice Minister of the
Presidency Roberto Thompson, and legislative advier Alex Silbaja.
CDA Peter Brennan, ADCM David Henifin, FCO, and Econoff accompanied
the AUSTR. Minister Arias emphasized the importance of CAFTA-DR to
President Arias (and, thus, was thankful for the extension to
October 1), reviewed the lack of progress under the previous
administration, and noted how CAFTA-DR has gained support since the
October referendum of last year. The Minister said he monitors the
progress and procedures of CAFTA implementation "in detail" and
expressed optimism that all the legislation could be completed by
July with insurance and telecommunications wrapping up in May.

----------------------------
USTR COMMITMENT OF RESOURCES
----------------------------

3. (U) The AUSTR replied that USTR was pleased to be able to offer a
March 1 extension through October 1. The extension process required
much discussion with CAFTA-DR partners. A July completion of the
implementation package would be a welcome result. Furthermore,
completion any later would jeopardize the process as the deadline
for completion is truly sooner than October. When factoring for the
USG's final review (about four weeks), likely Sala IV review of the
last bill (about four weeks), and a possible second Sala IV review
in the event that a bill is returned to the national assembly
(another four weeks), a deadline of 12 weeks prior to October 1 --
July 1 -- is the realistic working deadline. In addition, USTR will
commit resources to assist the GOCR with completing the
implementation review. The AUSTR specifically spoke of the
possibility of travel by a USTR team to San Jose to push the
implementation process and help reach agreement on the remaining
substantive issues. (NOTE: The USTR team is scheduled to visit the
week of May 11.) The AUSTR also emphasized the importance of
addressing all remaining issues to ensure entry-into-force by
October 1, including biodiversity, even though these issues may be
politically difficult.

4. (SBU) Vice President Chinchilla responded positively to the
suggestion that a technical team visit Costa Rica. She described
the political difficulties with crafting graduated penalties for IP
legislation and the resistance from legislators within the pro-CAFTA
coalition (G38) against modifying criminal law. Of note, she added
that the GOCR wants to establish a special office to prosecute IP
crimes.

------------------------------------
STAKES ARE HIGH; MUST STAYED FOCUSED
------------------------------------

5. (U) The AUSTR expressed a strong respect for Costa Rican
democracy by stressing that the GOCR must direct and manage the
CAFTA-DR process in Costa Rica. He emphasized the importance of
full compliance with the terms of CAFTA-DR, pointing out that the
results of not finishing the implementation process by October 1 or
finishing the implementing legislation which is not CAFTA-DR
compliant yields the same result: Costa Rica will not achieve
entry-into-force by October 1. He urged the GOCR to focus on
creative ways to arrive at CAFTA-DR compliant solutions to their
legislative problems. He likened the process to solving a complex
mathematical equation; there could be a number of ways to arrive at
the desired answer, but there was only one correct (i.e.,
CAFTA-compliant) answer. The AUSTR requested closer collaboration
on regulations as the sooner a review starts, the sooner potential

problems can be identified and resolved.

------------------------------------
MEETING WITH MINISTER RUIZ AND COMEX
------------------------------------

6. (U) Earlier in the day, the AUSTR met with COMEX Minister Ruiz
and his team (Director General Gabriela Castro, Alan Thompson, and Susana Vasquez) and Ambassador Duenas. The AUSTR outlined the high priority of including Costa Rica in CAFTA-DR, USTR's mandate to legally satisfy the requirements of CAFTA-DR compliance, and USTR's awareness of the local political sensitivity of the remaining issues, i.e., insurance, IP, and biodiversity. However, he cautioned that these issues must be resolved in order to achieve
trade agreement compliance and stressed the necessity to focus on
the remaining substantive issues given the limitations of the
schedule.

---------------
AND THE ISSUES?
---------------

7. (U) The COMEX team raised several issues on insurance and noted
that the insurance regulations should be ready by early May. On
other issues, the GOCR explained the political difficulty of
addressing biodiversity. The GOCR also acknowledged that
regulations and spectrum allocation remain as telecommunications
"to-do" items. COMEX expected to finish telecomm regulations by the
end of May. All agreed that a meeting between USTR's telecomm
expert and ICE (the national telecomm and electricity provider)
would be essential to resolving the questions on spectrum
allocation. A plan for IP could not be fully discussed since at the
time of the AUSTR-COMEX meeting, the Sala IV had yet to issue its
full ruling as to why it returned an IP bill to the national
assembly for "corrections." The AUSTR acknowledge that several of
these issues are politically difficult, but at the end of the day
COMEX had to find a way to address them in a timely manner and in a way that is fully CAFTA-DR compliant.

-------
COMMENT
-------

8. (SBU) There has been little CAFTA-DR progress since AUSTR
Eissenstat's visit. The special IPR prosecutor idea mentioned by VP
Chinchilla has been put on hold, pending resolution of the
diplomatic incident caused when Attorney General Francisco
Dall'Anese was delayed in the Miami airport on April 23 as he
arrived on official business. The prickly Dall'Anese took offense
at his perceived maltreatment, returned to Costa Rica, went public
with his experience, and suspended all cooperation with the USG on
judicial issues. We expect cooperation to return to normal, but we
are not there, yet, and IPR enforcement has never been high on
Dall'Anese's agenda, anyway. As of April 25, the legislature had
completed work on seven of 13 implementation bills, but work has
stopped since the annual legislative leadership elections on May 1
while the new legislative session gets organized. The agenda for
the new session is quite lengthy; we have been pushing legislators
not to let the CAFTA-DR bills get buried under the flow of other
business. A USTR team visit will thus be a timely instrument to
help the GOCR maintain its CAFTA-DR focus.

9. (U) AUSTR Eissenstat has cleared this cable.

SIEKERT

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