VZCZCXYZ0005
PP RUEHWEB

DE RUEHSJ #0066/01 0291836
ZNR UUUUU ZZH
P 291836Z JAN 08
FM AMEMBASSY SAN JOSE
TO RUEHC/SECSTATE WASHDC PRIORITY 9386
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE PRIORITY
RUEHDG/AMEMBASSY SANTO DOMINGO PRIORITY 1580
RHEHNSC/NSC WASHDC PRIORITY

UNCLAS SAN JOSE 000066 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR WHA, WHA/CEN, WHA/EPSC AND EEB; PLEASE PASS TO 
USTR:AMALITO/DOLIVER 
 
E.O. 12958: N/A 
TAGS: CS ECON ETRD PGOV PINR PREL
SUBJECT: CAFTA IMPLEMENTATION SNAPSHOT AS OF JANUARY 29 
 
REF: A. SAN JOSE 00031 
     ¶B. 07 SAN JOSE 2070 
 
¶1. (SBU) SUMMARY:  Focused on completing CAFTA implementing 
legislation, pro-CAFTA National Assembly (Asamblea) party 
leaders are hopeful regarding the passage of the legislation 
by the first vote before March 1.  Yet, the odds are slim 
given the realities of the Costa Rican legislative process 
coupled with a constitutional review of many of the remaining 
eight bills.  The prospect and method of requesting an 
extension heavily weighs over the CAFTA debate.  Accordingly, 
there is speculation by government and business leaders of 
whether Costa Rica should even request an extension.  The 
argument consists of three points: (1) Costa Rica can deposit 
notice with the OAS acknowledging a "work-in-progress"; (2) 
pressure must be maintained on the Asamblea; and (3) the GOCR 
can sidestep the perceived unpleasant process of negotiating 
extension agreements with its CAFTA partners, specifically 
Nicaragua.  Though interesting discourse, Post consistently 
expresses the position that March 1 signifies the completion 
of the legislation and USTR certification.  Costa Rican 
speculation highlights the need to delineate a USG position 
with an explanation of the USG role at the time of an 
extension request.  END SUMMARY. 
 
============================================= == 
LEGISLATION MOVING: IS FAST TRACK FAST ENOUGH? 
============================================= == 
 
¶2. (SBU) With fast track rules in place, the pro-CAFTA G38 
coalition continues to move forward on the implementing 
legislation.  Faction chiefs Mayi Antillon (PLN), Lorena 
Vasquez (PUSC) and Luis Antonio Barrantes (ML) are all 
hopeful; they expect the Asamblea to approve (by first vote) 
as many as six items of legislation by the end of February. 
The G38 leaders attribute their progress to three factors: 
(a) a general sense, even in the anti-CAFTA legislators, that 
the Asamblea (and the nation) need to get beyond CAFTA to 
other key initiatives, (b) the new public relations campaign 
against the opposition PAC party and its renowned 
obstructionist tactics, and (c) the fast track rules 
themselves, which limit the number of sessions for debate, 
even when hundreds of amendments are on the table.  With fast 
track, Antillon notes, the legislators can see the light at 
the end of the tunnel.  Despite the optimism of recent weeks, 
several renegade G-38 legislators appear to be using their 
CAFTA support as a bargaining chip in exchange for GOCR 
backing of "home-district" projects.  As for PAC, the PUSC 
and ML are gleefully taking credit for an inspired PR stunt, 
in which they held an impromptu press conference on January 8 
featuring a wheelbarrow stacked high with amendments offered 
by the PAC-led opposition.  Coupled with a GOCR-organized, 
private sector-funded media campaign to get CAFTA done, the 
PAC has been less problematic, according to Vasquez. 
 
================ 
LATEST SCORECARD 
================ 
 
¶3. (SBU) Even with this new "dynamism," progress is still 
slow.  Since our last scorecard (Ref B), two bills (the UPOV 
law and Budapest Treaty) have passed their first plenary 
reading and been transmitted to the Supreme Court's 
Constitutional Chamber (Sala IV) for review.  (On the former, 
PAC members exercised their right to ask for this review, 
which was not required in this case, illustrating that they 
have not given up, yet.)  A second bill (opening the 
insurance sector) moved from committee to the Plenary.  The 
tally as of January 29: 
 
To be introduced:       1 
In Committee            0 
In Plenary debate       5 
In Mini-Plenary debate  2 
Under Sala IV Review    2 
Fully approved          2 
 
Of the seven bills in the plenary and mini-plenary, five have 
fast track status. 
 
¶4. (SBU) Legislation in the mini-plenary has a "special" fast 
track status which means this legislation is expected to move 
through the Asamblea faster than legislation in the plenary. 
As for the bill yet to be introduced (an amendment to the 
copyright law), it has been purposely held back in order to 
add amendments, if necessary, for IPR issues that may be 
undermined in other CAFTA related IPR legislation currently 
tracking through the Asamblea, according to COMEX 
representatives in Washington. 
 
============================== 
MARCH, NO; APRIL OR MAY, MAYBE 
============================== 
 
¶5. (SBU) The G38 optimism remains tempered, however.  None of 
the faction leaders see all the CAFTA legislation being 
completed by March 1.  All three tell us that April or May is 
more likely, considering that the PAC probably will send 
every item to the Sala IV for review, adding as much as 
30-days to the timetable.  Vasquez acknowledges some weakness 
within her own PUSC faction, where one legislator -- more 
loyal to the party's anti-CAFTA leadership than to the 
pro-CAFTA PUSC caucus in the Asamblea -- has missed sessions 
(and blocked quorums) in pursuit of his own agenda.  She, 
Antillon and Barrantes agree that the hard core opposition 
may heat up when universities resume classes in February. 
The G38 leaders also expect the political maneuvering (now 
underway) for the Asamblea's internal elections May 1 may 
also slow progress on legislation.  Antillon has already 
announced that she will not run again to lead the PLN bloc. 
Vasquez and Barrantes may stay on, however. 
 
============================= 
THE "PARTIAL CREDIT" SCENARIO 
============================= 
 
¶6. (SBU) Meanwhile, the Arias administration is apparently 
mulling over next steps.  In a private conversation with the 
DCM on January 17, President Arias wondered aloud if Costa 
Rica could deposit its instrument of ratification with the 
OAS prior to March 1, as a commitment to CAFTA 
implementation, while continuing to push ahead on the 
legislation.  In similar fashion, businessman Carlos Denton 
opined in La Republica on January 23 that the Asamblea should 
just continue to work without a GOCR request for an extension 
since this would avoid brokering extension agreements with 
the CAFTA countries while maintaining pressure on the 
Asamblea.  Besides, he wrote, Costa Rica is already a part of 
CAFTA. 
 
=========================== 
WHEN TO ASK...NOW OR LATER? 
=========================== 
 
¶7. (SBU) In the Ambassador's farewell call on January 21, 
Minister of Finance Guillermo Zuniga asked for an explanation 
of what would happen if the implementing legislation was not 
passed and for advice on talking to partner countries.  The 
Ambassador quickly pointed out that Costa Rica was not in 
CAFTA and it was late.  But, the USG wanted Costa Rica in 
CAFTA hence, the more legislative progress the better.  He 
then described how CAFTA was similar to a partnership, and 
therefore Costa Rica should talk to a representative of the 
partnership, not to individual partners.  Whether the issue 
is the extension or with whom to negotiate the extension, the 
Ambassador's concluding advice was consistent:  call USTR. 
The common theme connecting the President's thinking, 
Denton's opinion, the Finance Minister's questions, and COMEX 
Minister Ruiz's extension questions to the Ambassador in 
early January  (Ref A) is when, and then how, to proceed with 
an extension request.  Clearly, the GOCR is gripped with when 
to make the formal extension request as it hedges the timing 
of such a request against legislative momentum and progress. 
 
 
======== 
COMMENT: 
======== 
 
¶8. (SBU) Although USTR will ultimately have to make the 
determination, it appears that Arias, and Denton's "partial 
credit" approach falls short of certifiable compliance. 
Their musings are all the more reason we should be ready, 
when the EIF extension request comes, to delineate the USG 
position and explain the USG role.  As for the Asamblea, if 
the G38 discipline continues to hold, then the legislators 
will have accomplished more since December (albeit too late 
to meet the EIF target) than the previous legislature did in 
four years.  We hope their experience will provide important 
lessons in more effective governance, but any wisdom gained 
may be short-lived.  Once the implementing legislation has 
been completed, we expect the G38's unity will begin to 
fracture, as all parties start their open jockeying on other 
priority legislative issues, for party leadership (elections 
on May 1), and for the 2010 national elections. 

BRENNAN