VZCZCXYZ0000
RR RUEHWEB

DE RUEHSJ #2617/01 3212050
ZNR UUUUU ZZH
R 172050Z NOV 06
FM AMEMBASSY SAN JOSE
TO SECSTATE WASHDC 6679

UNCLAS SAN JOSE 002617 
 
SIPDIS 
 
DEPARTMENT FOR WHA/CEN 
 
SIPDIS 
 
FOR UNITED STATES TRADE REPRESENTATIVE - A.MALITO 
 
E.O. 12958: N/A 
TAGS: ETRD ECON PGOV KIPR CS
SUBJECT: CAFTA RATIFICATION ADVANCES IN COSTA RICA 
 
REF:  SAN JOSE  1792 
 
¶1.  (U) Summary.  Although President Arias has made it a top 
priority, Costa Rican efforts to ratify and implement CAFTA-DR have 
proceeded at a slow pace, but are picking up speed.  After more than 
five months of committee deliberations, the President of the 
legislative assembly (the Asamblea), with the backing of two-thirds 
of the body, has finally given the committee a deadline of midnight 
December 12 for reporting the ratification bill out of committee. 
If this deadline is met (as we anticipate), then full Asamblea 
debate will begin after the holiday recess in January, with the 
first of two required plenary votes expected by mid-February.  If 
there are no glitches, this timetable could lead to the second (and 
ratifying) vote in April, following mandatory review by the Supreme 
Court in March.  Ratification is just the first step, however. 
Twelve of thirteen bills necessary to implement the treaty have been 
introduced, but only three  have been reported out of committee and 
are ready for debate by the full Asamblea.  End Summary. 
 
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COMMITTEE ACTION ON CAFTA RATIFICATION 
-------------------------------------- 
 
¶2.  (U) For more than five months Costa Rica's Asamblea has held 
committee hearings on whether to ratify CAFTA-DR, taking testimony 
from dozens of proponents and opponents.  On October 11, the 
legislature's international relations committee completed its 
hearings in San Jose.  After a one-day blitzkrieg of public fora 
around the country on October 14, the committee turned its attention 
to procedural motions and interpretive clauses intended to clarify 
legislative intent.  The committee has considered approximately 200 
procedural motions, most of which were stalling tactics by 
opponents.  So far 70 interpretive clauses intended to clarify 
legislative intent have been introduced in committee. 
 
¶3.  (U) Because of the delays, on October 31, the President of the 
Asamblea, with the backing of two-thirds of the body, set a deadline 
of midnight December 12, 2006, for the committee to vote upon its 
recommendation.  Under legislative rules, any interpretive motions 
not acted upon by the deadline will be forwarded to the full body 
for consideration later.  Post believes a majority of the committee 
will recommend ratification on December 12. 
 
-------------------------------------------- 
THE ASAMBLEA RATIFICATION PROCESS AND TIMING 
-------------------------------------------- 
 
¶4.  (U) According to legislative and executive branch sources, the 
full 57-member Asamblea (Plenary) is expected to begin deliberations 
in January 2007 with the first of two required plenary votes 
anticipated by mid-February.  Disagreement remains regarding the 
number of votes necessary to ratify the treaty.  While many experts 
believe a simple majority is sufficient, because some provisions of 
the treaty require changes that opponents contend conflict with the 
constitutional protection afforded to parastatal monopolies, the 
Arias administration believes a two-thirds majority (38 votes) is 
politically necessary to avoid a Supreme Court challenge and to 
silence critics.  The  administration remains confident they have 38 
votes. 
 
¶5.  (U) If the treaty is voted favorably, it will automatically be 
submitted to the Supreme Court's "Sala IV" chamber for up to 30 days 
for constitutional and procedural review.  Following Supreme Court 
review, the treaty would be returned to the Asamblea for a second 
plenary debate and vote which should take only a few days.  If there 
are no glitches, post's best guess at this point is that CAFTA-DR 
probably will be ratified in Costa Rica in April 2007. 
 
¶6.  (U) One potential glitch is the next round of public protests, 
which may take place around the time of the committee vote (in 
mid-December) or the first plenary vote (mid-February).  GOCR 
sources, pleased that the anti-CAFTA protests fell flat in October, 
have admitted to us that broader protests, (e.g., bringing in taxi 
drivers who could block streets, especially in San Jose), or more 
intense protests (e.g., making more use of university students) 
could be problematic.  Another potential glitch is in the Asamblea 
itself, where opposition parties, led by Otton Solis and the PAC 
party, could flood the plenary debate with motions as a stalling 
tactic.  Based on media interviews since November 12, the PAC seems 
to have chosen the plenary as its next battleground.  The third 
potential glitch is the Supreme Court, where opponents could bring a 
number of challenges to the treaty. 
 
----------------- 
ENTRY INTO FORCE 
----------------- 
 
¶7.  (U) Ratification is only the first step in bringing CAFTA-DR 
into force in Costa Rica, however.  The United States Trade 
Representative (USTR) has identified 13 areas of Costa Rican law 
that must be amended to bring the country's laws into compliance 
with the treaty before it can enter into force.  Twelve of the 
necessary thirteen bills have been introduced in the Asamblea.  Of 
those, three relatively non-controversial bills have passed out of 
committee and await action in the Plenary. 
 
¶8.  (U) Under Costa Rica's unusual legislative procedure, from 
December 1 until April 30 the executive branch controls the 
legislative agenda.  This week the Arias administration announced 
its first set of priorities for legislative action.  Three of the 
thirteen required CAFTA implementation bills appear on the priority 
list: Priority #3 - Opening of the insurance market; Priority #7 - 
intellectual property rights (IPR) reforms (the third of three 
required); and Priority #11 - opening of the telecommunications 
market.  These three bills are considered the most difficult and 
controversial part of the implementation agenda 
 
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COMMENT 
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¶9.  (SBU) One political commentator described the CAFTA process to 
us as a championship bout between evenly matched boxers.  There will be many rounds, and (probably) no knockout by either side.  The 
illustration may be apt.  The Arias administration got off to a slow 
start, but has been gaining ground.  As the legislative process 
continues, the government will have to take more punches -- in our 
view, more likely in the Asamblea than in the Supreme Court or in 
"the streets".  With sufficiently focused and determined politicalQleadership, post believes the Arias administration is up to the challenge of getting CAFTA ratified. 
 
¶10.  (SBU) The real challenge will be the race to pass all of the 
legislation necessary implementing legislation before the Feb. 29,Q08 deadline.  If the Asamblea ratifies the agreement in April, the 
GOCR will have approximately 300 days to pass necessary legislation. 
 Guatemala, Honduras, El Salvador, and the Dominican Republic have all taken an average of 450 days (ranging from 396-478 days; in the case of the DR 438 days and counting) after ratification to bring 
the CAFTA into force.  The question remains whether the GOCR follows that pattern or emulates Nicaragua's example (which took only 173 days) of not rearguing the substance of commitments already included in the agreement.