VZCZCXYZ0010
PP RUEHWEB

DE RUEHSJ #0031/01 0171740
ZNY CCCCC ZZH
P 171740Z JAN 08
FM AMEMBASSY SAN JOSE
TO RUEHC/SECSTATE WASHDC PRIORITY 9345
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE PRIORITY
RUEHDG/AMEMBASSY SANTO DOMINGO PRIORITY 1577
RHEHNSC/NSC WASHDC PRIORITY

C O N F I D E N T I A L SAN JOSE 000031 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR WHA, WHA/CEN, WHA/EPSC AND EEB; PLEASE PASS TO 
USTR:AMALITO/DOLIVER 
 
E.O. 12958: DECL: 01/17/2018 
TAGS: CS ECON ETRD PGOV PINR PREL
SUBJECT: COSTA RICA -- CAFTA EXTENSION REQUEST LIKELY 
 
REF: 07 SAN JOSE 2070 AND PREVIOUS 
 
Classified By: Classified By: DCM Peter Brennan per 1.4 (d) 
 
¶1.  (C) SUMMARY: While the national legislature (Asamblea) 
works at full speed to complete CAFTA implementing 
legislation, GOCR officials (and the local media) are 
openly speculating about a probable entry-into-force EIF 
extension.  In private, executive and legislative branch 
contacts are almost unanimous: there is no way Costa Rica 
can meet the March 1 deadline; at least another two months 
probably will be needed.  In public, President Arias and 
Minister of the Presidency Arias are keeping pressure on 
the legislature, but the President has acknowledged that 
meeting the deadline is "unrealistic".  The Arias 
brothers are also making clear that should there be an 
extension, the PAC-led opposition,s obstructionist 
"legislative terrorism" would be to blame.  With the public, 
and much of the Asamblea eager to get beyond CAFTA to 
other hot issues such as public security, the pro-CAFTA 
G38 coalition working well in the Asamblea, and the PAC 
under fire for its dilatory tactics (septel), Costa Rica 
may at last build sufficient momentum to get the CAFTA 
job done, although not on time.  We anticipate 
an extension request after the GOCR takes stock of 
progress at the end of January.  END SUMMARY. 
 
=============================== 
LEGISLATURE AT FULL SPEED . . . 
=============================== 
 
¶2.  (SBU) Pro-CAFTA legislators returned to work seemingly 
refreshed from their year-end recess and determined to make 
progress on the implementing agenda.  PLN faction chief 
Mayi Antillon seemed pleasantly surprised by the G38,s 
discipline and focus when she met with Pol/Econ Counselor 
on January 9.  Antillon sketched a timetable based on two 
sessions a day, under fast track rules, that would grind 
through legislation fairly swiftly (by Costa Rican 
standards).  Her goal is to move quickest (and in parallel) 
on the two telecom laws and the UPOV law (which passed its 
first plenary vote on January 14), in order to complete the 
first vote on these politically controversial topics before 
universities (full of potential protesters) resume class 
in early February.  She also predicted fast action on the 
Budapest Treaty.  The problematic Libertarian Party (ML) 
is cooperating, Antillon added, assuaged by, among other 
concessions, the PLN agreeing to form a new 
legislative committee on public security (an ML and PAC 
priority).  Vice Minister of the Presidency Roberto 
Thompson also gave an upbeat message to Pol/Econ 
Counselor on January 10. 
 
========================= 
. . . BUT NOT FAST ENOUGH 
========================= 
 
¶3.  (C) Antillon,s and Thompson,s best case scenarios, 
however, predict the Asamblea approving (in 1st vote) no 
more than 3-4 more items of implementing agenda by the end 
of January, with all of these likely facing 30-day 
Constitutional Chamber (Sala IV) review (forced by the PAC) 
before becoming law.  (The PAC has already asked that the 
UPOV bill be sent to the Sala IV for review.)  Even without 
Sala-required revisions, these bills would not become law 
until March, bringing the grand total of fully completed 
items at that time to 6-10 (out of 13 total).  Antillon 
predicted she could finish all the legislation by April or 
May, but this is contingent on maintaining the current 
pace in the Asamblea and discipline in the G38.  She added 
that any extension in the Asamblea would have to be part of 
a broader national strategy including a diplomatic 
component with the USG and other CAFTA-DR parties, and a 
public relations component, both domestic and 
international. 
 
¶4. (SBU) ML and PLN party staffers paint a similar 
picture.  Even with three-a-day and weekend sessions (which 
the legislators are likely to resist and which Antillon 
hopes to avoid), it is mathematically impossible, they say, 
to complete all the implementing legislation by March 1. 
ML calculations, in fact, suggest that a six-month 
extension might be realistic, given the other work the 
Asamblea wants to attend to and upcoming faction leadership 
elections in May. 
 
¶5.  (C) COMMENT:  We agree that an extension appears 
inevitable.  Under ideal conditions, the Asamblea could 
complete the first vote on the seven items now in the 
plenary o/a February 20.  The 30-day Sala IV review would 
still have to follow before the laws were enacted, however, 
and the two implementation items not yet in the plenary -- 
the laws regulating insurance contracts and authors, 
copyright protections - would lag even further behind.  The 
earliest completion date for all the implementing 
legislation is therefore sometime in late March or April. 
END COMMENT. 
 
============================================ 
TESTING THEIR ARGUMENTS, TESTING THE WATERS 
============================================ 
 
¶6.  (C) Minister of Foreign Trade Marco Vinicio Ruiz echoed 
these views during the Ambassador,s farewell call on 
January 7.  He opined that an EIF extension would be 
required, although he acknowledged that public discussion 
of such a request could dampen political momentum in the 
legislature.   Ruiz said he had already "reached out" 
informally to other CAFTA-DR parties to gauge their 
reaction to a possible extension request, and asked 
rhetorically when would be the appropriate time to make 
such a request.  The Ambassador urged Ruiz to consult with 
USTR on all aspects of the extension issue.  (NOTE: 
Confirming Ruiz,s comments about "reaching out," the media 
here has run interviews with CAFTA-DR officials such as the 
Guatemalan VM of Trade and the local Nicaraguan Ambassador 
predicting that their countries would respond favorably to 
a Costa Rican extension request.) 
 
¶7.  (C) The Minister suggested that the U.S. should deal 
"differently" with Costa Rica, since the country has 
specific characteristics that set it apart from its 
neighbors; namely, the three-fold challenge of opening a 
state telecommunications monopoly, opening a state 
insurance monopoly, and a facing a constitutional review 
of all CAFTA-related legislation.  Ruiz fretted that the 
Sala IV might not be able to handle multiple pieces of 
complex, controversial legislation fast enough to complete 
its review in the required 30 days. 
 
=============== 
EXTENSION MANIA 
=============== 
 
¶8.  (C) Despite his caution with the Ambassador, Ruiz 
later spoke to the press about an extension, predicting a 
two- to four-week delay.  His widely-reported remarks set 
off a flurry of political and press speculation prompting 
hasty spin control by the GOCR and its pro-CAFTA coalition 
partners.  An exasperated Antillon told Pol/Econ Counselor 
that Ruiz had spoken prematurely and without 
authorization.  Antillon and PUSC faction head Lorena 
Vasquez started a chorus of interviews, all stressing that 
the G38 would continue to work based on the March 1 
deadline.  Vasquez and ML chief Luis Barrantes, however, 
argued that should it appear that the Asamblea could not 
make the deadline, the GOCR should then explore extension 
options with the CAFTA-DR parties. 
 
¶9.  (SBU) In back-to-back statements released January 8-9, 
Minister Arias stressed that the GOCR had not made any 
official request, and would continue to view February 29 
as the final day to complete legislative work in time for 
the March 1 EIF deadline.  He stressed the importance of 
having CAFTA-DR enter into force, praised the Asamblea for 
its hard work, and urged the PAC to respect the results of 
the October 7 referendum by not obstructing work in the 
legislature.  In interviews, both Arias brothers (the 
President and the Minister) said a possible extension 
depended on the PAC.  If that party (and its anti-CAFTA 
allies) dropped their delaying tactics, the legislature 
could move faster.  The GOCR would have a better idea of 
progress by the end of January, and if it had to request an 
extension, it would do so after that. 
 
¶10. (U) In an interview on January 16, however, President 
Arias called the February 29 target date "unrealistic," 
and suggested that the an extension request might come 
"in mid-February," depending on the legislative picture 
then.  He declined to specify how much more time would be 
needed (although he had told the media on January 8 that 
two more months would be sufficient.) 
 
======== 
COMMENT: 
======== 
 
¶11.  (C) The specter of another legislative year frittered 
away by CAFTA debate seems to have galvanized the GOCR and 
the G38 into action.  The Arias administration is fully 
engaged, has a plan and is sticking to it.  The increasing 
public and political discussion of the post-CAFTA agenda 
(e.g., criminal justice reform, fiscal and concession 
reform, the so-called "development agenda," etc.) is a good 
sign.  Both sides, even the PAC, seem to be yearning 
for life after CAFTA.  Both sides also acknowledge that 
CAFTA-DR will enter into force for Costa Rica at some point. 
The questions are how and when. As to how, the GOCR appears 
confident enough to rely on its G38 coalition, for now; 
a deal with "moderate" PAC members is not in the cards. 
As to the when, we should know more when the Arias team 
takes stock in late January or early February. 
We understand that the COMEX delegation currently in 
Washington may raise the extension issue, but we do not 
expect a formal, fully-authoritative approach until the 
President -- or more likely Minister Arias -- weighs in, 
perhaps via a letter to USTR or a visit to Washington. 

LANGDALE