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Cablegate: Costa Rica (Finally) Closing in On Cafta

VZCZCXYZ0004
PP RUEHWEB

DE RUEHSJ #0634/01 2132107
ZNR UUUUU ZZH
P 312107Z JUL 08
FM AMEMBASSY SAN JOSE
TO RUEHC/SECSTATE WASHDC PRIORITY 9971
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE PRIORITY

UNCLAS SAN JOSE 000634

SENSITIVE
SIPDIS

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

E.O. 12958: N/A
TAGS: CS ECON ETRD KIPR PGOV PREL
SUBJECT: COSTA RICA (FINALLY) CLOSING IN ON CAFTA

REF: SAN JOSE 593

1. (SBU) SUMMARY: CAFTA is nearing the finish line in Costa
Rica. Three implementing bills were completed during July.
That will bring to eleven the total completed by the
legislature , with only two (on amendments and IPR
&catch-all8 issues) remaining. The GOCR (and we) are
confident these final items will become law by mid-September,
and that relevant regulations will be completed then, if not
sooner. Pro-CAFTA legislators attribute the success to
improved cooperation inside the G38 coalition, the
willingness of independent legislators to keep things moving,
and a tired opposition who wants to move beyond CAFTA. Lest
we sound too optimistic, we are also quietly making it very
clear that the GOCR should not/not fiddle around with
last-minute issues or rest on its laurels. Even without
further hiccups, the GOCR is not likely to finish all
legislation and regulations until shortly before the
(extended) October 1 EIF deadline. END SUMMARY.

------------------
ELEVEN DOWN, . . .
------------------

2. (U) Since AUSTR Everett Eissenstat,s visit in late-June
(Reftel), CAFTA implementing legislation has steadily moved
ahead in the Asamblea, even beating the GOCR,s projected
deadlines in some instances:

-- The law opening the insurance market was approved on July
1, signed by President Arias in a public ceremony on July 22,
and only awaits publication in the national gazette to become
law;

-- The controversial IPR enforcement bill (Observancias) was
approved on July 7 (without having to undergo a 2nd review by
the Constitutional Court). It is awaiting signature and
publication; and

-- The telecommunications bill was approved by the
Constitutional Court on July 16, and approved by the required
2nd Asamblea vote on July 29.

This will bring to eleven the total number of implementation
bills completed by the Asamblea, with three finished in July
alone, a monthly record for the CAFTA process.

----------------
. . . TWO TO GO.
----------------

3. (U) Two bills remain to be completed:

-- The amendments bill, which was approved by first vote on
July 22 and sent to the Constitutional Court for review on
July 25. (Court review is required in this case, since the
amendments are modifying an international agreement.)
Assuming no problems (and none are expected with this
straight-forward legislation), the bill should be returned
and approved by a 2nd vote in August; and

-- The controversial and complex IPR &catch-all8 bill (No.
12), which is under discussion in the Plenary. Using double
daily sessions to complete the 22 sessions permitted under
applicable fast-track rules, and assuming that biodiversity
issues added to this bill are completely acceptable (as we
believe they are), the GOCR is aiming for a 1st vote by
mid-August, in time for an (expected) Court review and 2nd
vote by mid-September. This bill is the &long pole8 in the
CAFTA tent.

--------------------------
THE COALITION IS CONFIDENT
--------------------------

4. (SBU) Pro-CAFTA G38 coalition leaders sound as confident
as we have ever heard them (and a bit relieved) that full
CAFTA implementation seems close. PLN faction chief Oscar
Nunez and his PUSC counterpart Lorena Vasquez point to better
cooperation among most coalition members, the availability
and willingness of independent members (especially ex-PAC
member Andrea Morales, now dating Nunez) to ensure that
quorums are met and the bills keep moving, and a generally
tired opposition who wants to move on. Separately, PAC
Faction Chief Francisco Molina acknowledged this last point
to us. In addition, meeting with the Ambassador on July 24,
the editorial board of leading daily La Nacion underscored
their confidence that CAFTA was virtually complete. (They,
in fact, optimistically predict that all remaining
legislation may be done by the end of August.)

5. (SBU) Nunez adds that even die-hard CAFTA-opponent and
wily legislative tactician Jose Merino (of the hard left FA
faction) had offered only a few motions to remaining
legislation &just for show.8 Both Nunez and Vasquez point
to intra-coalition problems as still troubling, particularly
with the five-member Libertarian faction, but the group is
cooperating at the moment. Vasquez, who had expressed
serious concerns during the AUSTR visit about biodiversity
issues, is now satisfied with the agreements reached between
USTR and the Ministry of Foreign Trade (COMEX) on that issue.
She adds that COMEX cooperation with the Asamblea is much
more fluid and effective now.

6. (SBU) Vasquez and Nunez also well understand that the GOCR
does not have until September 30 to complete its work and be
certified for EIF by the October 1 deadline. They are
pushing their troops (and the Executive) to keep moving.
Nunez opined that even the Constitutional Court may move a
little faster, aware of the deadline. He said he would
encourage Minister of the Presidency Rodrigo Arias (whose
office has extensive informal contacts with the Court) to
urge swift review of both the pending bills. The Amendments
bill, for example, may take only 2-3 weeks for the Court to
review (instead of the full 30 days permitted). Both faction
leaders note, however, that the IPR catch-all bill (a) will
probably be sent to the Court for review, even though it is
not technically required, and (b) is complex and
controversial enough to probably require a full 30-day review
period.

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

7. (SBU) Lest all this sound uncharacteristically optimistic,
we remind our readers that this saga ain,t quite over, but
we are almost there. The GOCR and pro-CAFTA legislators
sound (and act) confident and the Asamblea has made (for
them) extraordinary efforts (which we would love to see set a
precedent for other important initiatives). To have passed
any thirteen bills, but especially the CAFTA thirteen, in
&just8 ten months is a near-historic accomplishment for the
Costa Rican legislature. More importantly, even the
opposition is tired and wants to move on to life post-CAFTA.
We are convinced (at last) that CAFTA will be completed here.
However, we are quietly making it very clear that given the
helpful USG position on the state guarantee issue affecting
insurance (which has precluded the need for additional
legislation), the GOCR should not/not fiddle around with
other issues. Even without further substantive hiccups, the
GOCR is not likely to finish all legislation and regulations
until September, in keeping with the Tico last-minute style.
CIANCHETTE

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