Cablegate: Costa Rica: Inching Towards Cafta Implementation

VZCZCXYZ0019
PP RUEHWEB

DE RUEHSJ #2070/01 3532128
ZNR UUUUU ZZH
P 192128Z DEC 07
FM AMEMBASSY SAN JOSE
TO RUEHC/SECSTATE WASHDC PRIORITY 9293
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE PRIORITY
RUEHDG/AMEMBASSY SANTO DOMINGO PRIORITY 1572
RHEHNSC/NSC WASHDC PRIORITY

UNCLAS SAN JOSE 002070

SIPDIS

SENSITIVE

SIPDIS

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

E.O. 12958: N/A
TAGS: PGOV PREL PINR ETRD CS
SUBJECT: COSTA RICA: INCHING TOWARDS CAFTA IMPLEMENTATION

REF: A) SAN JOSE 1975, B) SAN JOSE 1856

1. (SBU) SUMMARY: Costa Rica's coalition of 38 pro-CAFTA
legislators (G38) has finalized two of the thirteen pieces
of legislation the GOCR has identified as required to
implement CAFTA-DR. The national assembly (Asamblea) is
working flat out, but that is not likely to be enough to
complete the other eleven bills in time, given the
Asamblea's cumbersome rules and the stubborn delaying
tactics of the opposition. Further complicating the
situation, the Ministry of Foreign Trade (COMEX) and USTR
have yet to complete implementation review consultations.
Debate-driven legislative changes in the Asamblea or
different-than-expected outcomes in the COMEX-USTR review
may present new obstacles to completing implementation on
time. In our view, prospects are slim that the GOCR will
achieve the March 1 deadline. END SUMMARY.

=================
GLACIAL MECHANICS
=================

2. (U) In order to understand the challenges facing the
G38, it is helpful to have a brief overview of Costa Rican
legislative mechanics. The Asamblea operates methodically
and deliberately due to a cumbersome, multi-layered system
of checks and balances. The principal elements of the
legislative process are (1) assignment to committee; (2)
review of amendments accumulated in committee; (3) first
plenary debate and vote; (4) second plenary debate and
vote, and (5) enactment into law. The second debate is to
confirm the voting in the first, but often takes place
after judicial review by the constitutional chamber (Sala
IV) of the Supreme Court. Some legislation automatically
requires Sala IV review. As few as 10 diputados may also
petition for a review, meaning that most legislation,
especially controversial items, face constitutional
scrutiny. In either case, the Sala IV has up to 30 days to
issue its ruling. If the Sala IV finds no fault, the
legislation moves to the second plenary for the confirming
vote. Disapproval by the Sala IV returns the bill all the
way back to committee for "correction." The PAC-led
opposition has vowed to take nearly all the CAFTA-DR
implementing legislation to the Sala IV.

3. (U) Normal Asamblea rules do not restrict debate on a
bill, allowing intransigent legislators to stretch the
process indefinitely. However, the GOCR has applied a new
"fast-track" rule (Article 41bis of the legislative rules
of procedure) which permits a supermajority of legislators
to limit the number of plenary sessions to 22 (with an
option for up to six more) on any given bill. In addition,
the Asamblea has created a "streamlined" mechanism whereby
bills can be assigned to a mini-plenary that consists of a
total of 19 legislators. These mini-plenaries have the
same debate and approval power of the full plenary.

=====================
SO, WHAT'S THE SCORE?
=====================

4. (U) With the above as background, this is the status of
the 13 items of implementing legislation as of December 18:

To be introduced: 1
In Committee: 1
In Plenary/Mini debate: 9 (8 under fast track rules)
Under Sala IV review: 0
Approved: 2

The approved legislation includes the dealer protection
(casas extranjeras) and anticorruption (codigo penal) laws.

==========
HOT ISSUES
==========

5. (SBU) In parallel with the legislative process, the
Ministry of Foreign rade (COMEX) and USTR continue their
implementaton review. COMEX reports that intellectual
proprty rights (IPR) remain a hurdle. Progress reportedly
has been made in reaching an understanding on the penalty
regime for IPR violations. A second issue is the lack of
clarity between the GOCR's existing law on biodiversity and
the proposed bill on patents. COMEX worries that
legislative efforts to amend the biodiversity law to "clean
up" any perceived contradictions with TRIPS or with the
patent bill will be extremely contentious and possibly
splinter the G38. Adoption of the UPOV convention is also
generating significant controversy, with one petition
pending before the Election Tribunal to hold the next
national referendum on this convention. (COMMENT: The
Tribunal is to rule on this in January. We expect they
will say no. END COMMENT.)

6. (SBU) Other key issues include opening the
telecommunications and insurance sectors, both of which
face vociferous opposition from some public-sector unions.
Members of the PAC-led opposition have told us that their
strongest opposition will continue to be on Telecom issues.
With the legislative and implementation review tracks
moving in parallel, there is always a risk that the content
of a bill in the Asamblea might veer away from USTR
principles, particularly when COMEX and USTR do not agree
on all issues. In addition, there are several CAFTA-DR
obligations that the GOCR will address through regulations,
such as SPS equivalence. While COMEX and the G38 have made
progress in moving the CAFTA-DR implementing legislation
through the Asamblea, the GOCR is still drafting the needed
regulations, which it hopes to conclude by mid-January.

============================
MARATHON WORK SCHEDULE . . .
============================

7. (U) The G38 is expending considerable energy to move the
legislation. Starting December 1, when the Executive sets
the agenda in the Extraordinary Session, the Asamblea work
schedule was extended to include evening and weekend
sessions, a highly-unusual step indicative of the Arias
Administration's intent to complete the legislation in
time. In public comments, both Arias brothers (the
President and the Minister of the Presidency) have stressed
the need to complete the Asamblea's work by January 15, in
order to allow time for the expected Sala IV reviews and to
complete final regulatory measures by March 1.

=========================
BUT A STUBBORN OPPOSITION
=========================

8. (SBU) Small numbers of hard-core CAFTA opponents
(including students and union members) continue to threaten
a few diputados and their families, picketing their homes
in some cases. Inside the Asamblea, PAC members often walk
out of the chamber (or refuse to enter), preventing a
quorum. The opposition also employs other familiar
obstructionist tactics, such as unleashing long-winded
diputado Jose Merino del Rio (Frente Amplio) for one of his
trademark six-hour filibusters, or dumping as many as 1000
amendments on bills under consideration.

9. (SBU) The PAC is under some pressure, including from its
own members, to stop blocking the "will of the majority"
who voted for CAFTA ratification in the October 7
referendum. This has opened some fissures in the party's
Asamblea faction, but PAC leadership remains determined and
disciplined. They acknowledge that CAFTA will happen in
Costa Rica, but they insist that meeting the March 1
deadline (which they see as artificial) is the GOCR's
"problem" and not PAC's.

=====================================
...AND AN EXHAUSTED, BRITTLE COALITION
=====================================

10. (U) The G38 itself faces internal problems, including
members' health issues (e.g., one legislator receives
cancer treatment early in the morning and then repairs to
the Asamblea to establish quorum in the afternoon) and
wavering coalition members, especially the problematic
Libertarian Movement (ML) party. With a two-thirds
majority required to overcome most obstacles or speed up
action, the G38 has precisely the needed number, with no
margin for error (or absence). All 38 members are needed
to be on hand, all the time, to establish quorum, and to
keep things moving.

11. (U) The expanded work schedule, longer hours, and tense
work environment have taken a toll on not only the
legislators, but also on exhausted Asamblea staff. It
remains to be seen how quickly legislators will regain the
momentum after the holiday recess. Our contacts report
that the Asamblea will work through at least December 21,
if not through December 24, probably returning on January 2
or January 7. Though the final recess calendar has yet to
be approved, our contacts report that the Asamblea will
more than likely work through at least December 21 and
probably return to work on January 7. That would leave a
mere nine days until the GOCR's self-imposed January 15
deadline, even working weekends.

=======
COMMENT
=======

12. (SBU) To its credit, the Arias administration is
maintaining a full court press and has not asked the USG
(or other CAFTA members, as far as we know) to consider an
entry-into-force extension. We expect such a request to
come next month. As we've noted previously (reftels), the
prospects remain unlikely for the GOCR to clear all
implementation hurdles in time. The timetable may be
technically possible, but it does not appear to be
politically feasible. On December 11, a former cabinet
minister told the Ambassador that there was "zero chance"
of the GOCR meeting the 1 March deadline. On December 12,
a senior opposition figure told us it would be
mathematically impossible to complete all the legislative
work in time (although quite possible, he said, with an
extension of two to three months).

LANGDALE

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