This record is a partial extract of the original cable. The full text of the original cable is not available.

C O N F I D E N T I A L SECTION 01 OF 02 SAN JOSE 002227 
 
SIPDIS 
 
WHA/CEN 
EB FOR WCRAFT, BLAMPRON 
E FOR DEDWARDS 
WHA FOR WMIELE 
WHA/EPSC FOR KURS, LGUMBINER 
H FOR JHAGAN 
STATE PASS TO USTR FOR RVARGO, NMOORJANI, AMALITO 
 
E.O. 12958: DECL: 09/22/2015 
TAGS: ETRD ECPS ECON PREL PGOV SOCI CS
SUBJECT: FINANCE MINISTER WANTS PRESIDENT PACHECO TO SUBMIT 
CAFTA-DR FOR RATIFICATION 
 
REF: A. SAN JOSE 2202 
     ¶B. SAN JOSE 2051 
 
Classified By: Charge Russell Frisbie for Reasons 1.4 (b) and (d) 
 
¶1.  (C) Summary.  On September 21, 2005, Charge met with GOCR 
Finance Minister Federico Carrillo, in part, to discuss the 
status of the United States-Central American-Dominican 
Republic Free Trade Agreement (CAFTA-DR).  Carrillo was 
buoyed by the Commission of Eminent Persons' report on 
CAFTA-DR and stated the FTA would be presented to the 
legislature by September 28 (a subsequent statement by the 
Vice President calls this optimistic timeline into question, 
however).  Carrillo characterized the report as independent 
confirmation of his firm view that fiscal reform is a 
necessary corollary to CAFTA-DR for effecting the profound 
changes that the country must make to further development. 
End Summary. 
 
¶2.  (C)  Carrillo stated that he views the Commission of 
Eminent Persons report as positive in that it highlights the 
need to pass fiscal reform in order to be able to implement a 
robust and appropriate complementary agenda (Ref A).  He 
stated that the complementary agenda should be expanded to 
address the concerns of the Commission but that it cannot be 
done all at once.  He agreed with the statements of Foreign 
Trade Minister Manuel Gonzalez regarding the need to have a 
long-term, fifteen- to twenty-year plan for projects to 
sustain development of the country under CAFTA-DR. 
 
¶3.  (C)  Carrillo stated that he, Trade Minister Gonzalez, 
Central Bank President Francisco Gutierrez, and Economy 
Minister Gilberto Barrantes (who is also Chair of the 
President's Economic Council), have been pushing the 
President to move forward on CAFTA-DR by sending it to the 
Legislative Assembly for ratification.  Carrillo hoped the 
President would send the agreement on September 20 when the 
Commission of Eminent Persons delivered its report. He said 
Pacheco would nonetheless forward it to the legislature by 
September 28, 2005.  (Comment:  Despite Carrillo's 
affirmation, Vice President Lineth Saborio told the press the 
same day that the soonest the President would send the 
agreement to the Assembly would be October 19, 2005.  Other 
knowledgeable sources believe that Pacheco will not forward 
the Agreement any sooner that November or December, if at 
all.  End Comment.) 
 
¶4.  (C)  Carrillo also said that the legislation required to 
implement CAFTA-DR in Costa Rica, such as the law to open the 
telecommunications and insurance industries, are almost 
ready.  He said they are using several international and 
Costa Rican consultants to do this work.  The insurance 
industry-related legislation should be sent to the Assembly 
in October, and the telecommunications sector-related 
legislation probably sometime soon after that. 
 
¶5.  (C)  Carrillo also commented on the now-dead draft law to 
strengthen and modernize the Costa Rican Institute of 
Electricity (ICE), which provides electricity and 
telecommunications services.  He welcomed the legislation's 
demise because of the unprecedented power it would have given 
to ICE.  He also stated that ICE will be given sufficient 
autonomy to operate in an open telecommunications market and 
that legislation to effect these changes will be a separate 
project from the Telecommunications Act.  This legislation 
would not give ownership of the entire telecommunications 
frequency spectrum or other special treatment to ICE as 
proposed earlier as this would have resulted in less 
competition, not more. 
 
¶6.  (C)  Carrillo was pleased that tax revenues were up 
twenty percent in the first six months of this year over the 
same period in 2004.  This result is due to better tax 
collection procedures and enforcement.  He cited the 
assistance provided by the Department of Treasury's Office of 
Tax Assistance as instrumental in this success. 
 
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COMMENT 
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¶7.  (C)  Summary.  Carrillo's ability alone to influence 
President Pacheco to move more quickly on CAFTA-DR is 
limited, but his assertion that the three other members of 
the council are also pushing hard for the President to send 
CAFTA-DR to the Assembly immediately makes his quest somewhat 
less Quixotic.  Nonetheless, the VP's rather definitive 
description of a protracted timeline, coupled with the 
President's usual capriciousness and intransigence, would 
seem to trump Carrillo's optimistic forecast. 
FRISBIE