Cablegate: Pathways to Prosperity: Costa Rica Prepares For

VZCZCXYZ0000
RR RUEHWEB

DE RUEHSJ #0862/01 2811509
ZNR UUUUU ZZH
R 081509Z OCT 09
FM AMEMBASSY SAN JOSE
TO RUEHC/SECSTATE WASHDC 1283
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE

UNCLAS SAN JOSE 000862

SIPDIS

E.O. 12958: N/A
TAGS: PREL ECON CS HO AMGT OPDC OVIP
SUBJECT: PATHWAYS TO PROSPERITY: COSTA RICA PREPARES FOR
MINISTERIAL

1. SUMMARY. Costa Rican officials are working diligently to
prepare for a successful Pathways to Prosperity ministerial
meeting in December, which they hope Secretary Clinton will
attend. In a meeting with visiting State Department
officials, they undertook to coordinate efforts to improve and
standardize the content of the draft working papers. They
also agreed on measures to continue involving only recognized
Honduran officials in preparation for the ministerial.
Meanwhile, the business community in Costa Rica has not heard
about Pathways from the government but is interested in being
involved. END SUMMARY.

2. WHA/EPSC Director Matt Rooney, EEB/TPP/BTA Director Bob
Manogue, and WHA/EPSC officer Susan Garro visited Costa Rica
September 16-17 to discuss Pathways to Prosperity with Costa
Rican counterparts in preparation for the ministerial meeting
in San Jose in December. They held a productive joint meeting
with officials from the Export Promotion Ministry (COMEX) and
the Ministry of Foreign Affairs (MFA) and, separately, with
the Chairs of the American Chamber of Commerce (AmCham) and
the Chamber of Exporters of Costa Rica (CADEXCO).

3. In the meeting with COMEX and the MFA, the delegation and
their counterparts reached agreement on how to manage the role
played by Honduras in Pathways. Honduras is responsible for
preparing one of four working papers to be presented at the
December ministerial, and progress had been stymied since the
assumption of power by the de facto government. The group
agreed that President Zelaya's Minister of Economy, Fredis
Cerrato, would continue to coordinate the effort on this
paper, while the technical work would be performed by staff of
CENPROMYPE, an agency of the Central American Integration
System that focuses on small and medium enterprises. COMEX
representative Esteban Aguero noted that, at a recent meeting,
Central American foreign ministers had expressed openness to a
solution of this nature. The Costa Rican officials agreed to
circulate to the governments participating in Pathways an
updated e-mail addresses list that excluded officials in the
Honduran de facto ministries and included CENPROMYPE. This
step was important, since technical level officials were
communicating frequently via e-mail, and they inadvertently
had been including Honduran officials who should not have been
involved.

4. Turning to the substance of the draft working papers,
WHA/EPSC Director Rooney expressed concern that they were
uneven, ranging from simply listing programs without analyzing
lessons learned or highlighting successes, to laying out
useful suggestions for sharing of best practices. Aguero
agreed and undertook to coordinate with the working group
leaders and other interested countries to standardize the
papers, ensuring they included appropriate analysis. He
suggested shifting the original planning schedule by a month,
requiring the papers to be completed by late October or early
November, and stressed that he wanted the declaration to be
completed prior to the ministerial meeting. He noted that
the Inter-American Development Bank had offered assistance.

5. The Government of Costa Rica (GOCR) was very hopeful that
Secretary Clinton would attend the Pathways ministerial,
Aguero emphasized. He said President Arias and Foreign
Minister Stagno planned to invite her when they met with her
in New York on the margins of the UN General Assembly. (Note:
The conversation in New York ultimately focused mainly on the
Honduras crisis, but the Secretary did express continued
commitment to Pathways. End note.) Aguero noted that the
Central American presidents would hold a summit in San Jose
December 7 to 9. Therefore, if Secretary Clinton came to the
Pathways ministerial December 10 or 11, she could meet with
them. In addition, the GOCR could plan activities for her
related to climate change, gender, youth, and/or development
of small and medium enterprises. Aguero made clear that Costa
Rica was willing to adjust the dates of the ministerial to
accommodate Secretary Clinton's schedule. Rooney responded
that perhaps more important than the dates was the expected
outcome; there needed to be a good result to make it
worthwhile for the Secretary to participate.

6. The Costa Rican officials commended the USG's efforts to
host in October a program fostering women entrepreneurs'
access to international markets and finance. Rooney suggested
that Costa Rican officials host a follow-on event in San Jose
to leverage the experience of the Costa Rican participants to
a wider audience.

7. EEB/TPP/BTA Director Manogue asked the Costa Ricans for
their honest assessment of the value of Pathways to Prosperity
for their country. Aguero responded enthusiastically that
Pathways opened the door to working with economic partners on
social issues that arose in the context of trade agreements
but were not addressed by them. Manogue suggested that it was
essential for each participating government to identify

several specific objectives that they wished to accomplish
through Pathways.

8. In their meeting with the delegation, the CADEXCO and
AmCham Chairs said they had not heard about Pathways from the
GOCR. However, they believed it could be a useful forum to
address concerns about issues that were related to but not
covered by trade agreements.

9. Commenting that free trade was important but not enough,
CADEXCO Chairwoman Monica Araya described the associations'
efforts to prepare their members to compete. She and AmCham
Chairwoman Lynda Solar stressed that GOCR officials were not
trained adequately to administer Costa Rica's free trade
agreements (FTAs). As an example, she described a case in
which GOCR officials had given a business export permits for
three containers of perishable merchandise. However, when the
product arrived in the Dominican Republic, Dominican officials
halted the shipment, because it lacked appropriate paperwork
from Costa Rica. The business owner had to fly to the
Dominican Republic, and she and CADEXCO spent days resolving
the problem. Araya said the trade associations have compiled
a book that analyzed the performance of the GOCR institutions
involved in FTAs. She underscored that the GOCR must invest
in training personnel in order to be able to manage the FTAs
effectively. Rooney said the trade associations' book could
be of interest to the Pathways working group on
competitiveness and cross-border movement of trade chaired by
Panama. Manogue stressed that specific issues arising from
the implementation of CAFTA should be dealt with in the
mechanisms provided for by CAFTA, while agreeing that Pathways
would be a useful tool for sustaining the political commitment
to needed reforms.

10. Araya and Solar thought it would be important for private
sector representatives to participate in the Pathways
ministerial. Rooney welcomed their interest. At the same
time, he explained some private sector participants in other
international fora had found the discussions sterile, and
Pathway organizers wanted to avoid that dynamic. Solar asked
whether CAFTA trade capacity building funds could be directed
to Pathways projects. Rooney responded that Pathways did not
involve assistance projects but worked at a policy level in
parallel to those programs.

11. COMMENT: Costa Rica's Export Promotion Ministry
officials are truly enthusiastic about Pathways and will do
everything possible to make the ministerial a success. That
said, they have not yet been able to articulate concrete
outcomes that they would like to see from Pathways. We will
continue to encourage them to try to identify specific
objectives. Without that vision, Pathways will have limited
impact on the lives of Costa Rican citizens. END COMMENT.
The delegation cleared this message.
BRENNAN

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