VZCZCXYZ0000
PP RUEHWEB

DE RUEHSJ #0410/01 1382158
ZNR UUUUU ZZH
P 172158Z MAY 08
FM AMEMBASSY SAN JOSE
TO RUEHC/SECSTATE WASHDC PRIORITY 9726
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC PRIORITY

UNCLAS SAN JOSE 000410 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR WHA, WHA/CEN, WHA/EPSC AND EEB; PLEASE PASS TO 
USTR:AMALITO/DOLIVER 
 
E.O. 12958: N/A 
TAGS: ECON ETRD KIPR PGOV PREL CS
SUBJECT: COSTA RICA: AUSTR SETS TRUE TIMELINE FOR CAFTA 
IMPLEMENTATION 
 
¶1. (U) SUMMARY. AUSTR Everett Eissenstat met with GOCR officials on 
April 24 and discussed several issues surrounding CAFTA-DR 
implementation status including the shrinking timetable; the need to 
ensure full CAFTA-DR compliance; remaining substantive issues, 
including the areas of insurance, intellectual property, and 
bidiversity; and USTR's willingness to commit resoures, including 
sending a technical team to Costa ica, to "close out" 
implementation.  The GOCR enthusiastically responded to the AUSTR's 
offer of snding a team to Costa Rica to work on technical isues. 
The GOCR also acknowledged the AUSTR's explnation of the shrinking 
timetable.  The true woring deadline, when accounting for USTR 
certification and the GOCR's Sala IV review process, is early July. 
All the remaining CAFTA-DR implementing legislation should really be 
completed by then in order to ensure entry-into-force by October 1. 
END SUMMARY. 
 
--------------------------------------------- --- 
MEETING THE MNSTER OF THE PRESIDENCY AND THE VP 
--------------------------------------------- -- 
 
¶2. (U) Minster of the Presidency Rodrigo Arias and Vice Presiden 
Laura Chinchilla hosted a lunch for the AUSTR o April 24. Also 
attending for the GOCR were Foregn Trade Minister Marco Vinicio 
Ruiz, Ambassadorto the U.S. Tomas Duenas, Vice Minister of the 
Presidency Roberto Thompson, and legislative advier Alex Silbaja. 
CDA Peter Brennan, ADCM David Henifin, FCO, and Econoff accompanied 
the AUSTR. Minister Arias emphasized the importance of CAFTA-DR to 
President Arias (and, thus, was thankful for the extension to 
October 1), reviewed the lack of progress under the previous 
administration, and noted how CAFTA-DR has gained support since the 
October referendum of last year.  The Minister said he monitors the 
progress and procedures of CAFTA implementation "in detail" and 
expressed optimism that all the legislation could be completed by 
July with insurance and telecommunications wrapping up in May. 
 
---------------------------- 
USTR COMMITMENT OF RESOURCES 
---------------------------- 
 
¶3. (U) The AUSTR replied that USTR was pleased to be able to offer a 
March 1 extension through October 1.  The extension process required 
much discussion with CAFTA-DR partners.  A July completion of the 
implementation package would be a welcome result.  Furthermore, 
completion any later would jeopardize the process as the deadline 
for completion is truly sooner than October.  When factoring for the 
USG's final review (about four weeks), likely Sala IV review of the 
last bill (about four weeks), and a possible second Sala IV review 
in the event that a bill is returned to the national assembly 
(another four weeks), a deadline of 12 weeks prior to October 1 -- 
July 1 -- is the realistic working deadline.  In addition, USTR will 
commit resources to assist the GOCR with completing the 
implementation review.  The AUSTR specifically spoke of the 
possibility of travel by a USTR team to San Jose to push the 
implementation process and help reach agreement on the remaining 
substantive issues. (NOTE: The USTR team is scheduled to visit the 
week of May 11.)  The AUSTR also emphasized the importance of 
addressing all remaining issues to ensure entry-into-force by 
October 1, including biodiversity, even though these issues may be 
politically difficult. 
 
¶4. (SBU) Vice President Chinchilla responded positively to the 
suggestion that a technical team visit Costa Rica.  She described 
the political difficulties with crafting graduated penalties for IP 
legislation and the resistance from legislators within the pro-CAFTA 
coalition (G38) against modifying criminal law.  Of note, she added 
that the GOCR wants to establish a special office to prosecute IP 
crimes. 
 
------------------------------------ 
STAKES ARE HIGH; MUST STAYED FOCUSED 
------------------------------------ 
 
¶5. (U) The AUSTR expressed a strong respect for Costa Rican 
democracy by stressing that the GOCR must direct and manage the 
CAFTA-DR process in Costa Rica.  He emphasized the importance of 
full compliance with the terms of CAFTA-DR, pointing out that the 
results of not finishing the implementation process by October 1 or 
finishing the implementing legislation which is not CAFTA-DR 
compliant yields the same result: Costa Rica will not achieve 
entry-into-force by October 1.  He urged the GOCR to focus on 
creative ways to arrive at CAFTA-DR compliant solutions to their 
legislative problems.  He likened the process to solving a complex 
mathematical equation; there could be a number of ways to arrive at 
the desired answer, but there was only one correct (i.e., 
CAFTA-compliant) answer.  The AUSTR requested closer collaboration 
on regulations as the sooner a review starts, the sooner potential 
 
problems can be identified and resolved. 
 
------------------------------------ 
MEETING WITH MINISTER RUIZ AND COMEX 
------------------------------------ 
 
¶6. (U) Earlier in the day, the AUSTR met with COMEX Minister Ruiz 
and his team (Director General Gabriela Castro, Alan Thompson, and Susana Vasquez) and Ambassador Duenas.  The AUSTR outlined the high priority of including Costa Rica in CAFTA-DR, USTR's mandate to legally satisfy the requirements of CAFTA-DR compliance, and USTR's awareness of the local political sensitivity of the remaining issues, i.e., insurance, IP, and biodiversity.  However, he cautioned that these issues must be resolved in order to achieve 
trade agreement compliance and stressed the necessity to focus on 
the remaining substantive issues given the limitations of the 
schedule. 
 
--------------- 
AND THE ISSUES? 
--------------- 
 
¶7. (U) The COMEX team raised several issues on insurance and noted 
that the insurance regulations should be ready by early May.  On 
other issues, the GOCR explained the political difficulty of 
addressing biodiversity.  The GOCR also acknowledged that 
regulations and spectrum allocation remain as telecommunications 
"to-do" items.  COMEX expected to finish telecomm regulations by the 
end of May.  All agreed that a meeting between USTR's telecomm 
expert and ICE (the national telecomm and electricity provider) 
would be essential to resolving the questions on spectrum 
allocation.  A plan for IP could not be fully discussed since at the 
time of the AUSTR-COMEX meeting, the Sala IV had yet to issue its 
full ruling as to why it returned an IP bill to the national 
assembly for "corrections."  The AUSTR acknowledge that several of 
these issues are politically difficult, but at the end of the day 
COMEX had to find a way to address them in a timely manner and in a way that is fully CAFTA-DR compliant. 
 
------- 
COMMENT 
------- 
 
¶8. (SBU) There has been little CAFTA-DR progress since AUSTR 
Eissenstat's visit.  The special IPR prosecutor idea mentioned by VP 
Chinchilla has been put on hold, pending resolution of the 
diplomatic incident caused when Attorney General Francisco 
Dall'Anese was delayed in the Miami airport on April 23 as he 
arrived on official business.  The prickly Dall'Anese took offense 
at his perceived maltreatment, returned to Costa Rica, went public 
with his experience, and suspended all cooperation with the USG on 
judicial issues.  We expect cooperation to return to normal, but we 
are not there, yet, and IPR enforcement has never been high on 
Dall'Anese's agenda, anyway.  As of April 25, the legislature had 
completed work on seven of 13 implementation bills, but work has 
stopped since the annual legislative leadership elections on May 1 
while the new legislative session gets organized.  The agenda for 
the new session is quite lengthy; we have been pushing legislators 
not to let the CAFTA-DR bills get buried under the flow of other 
business.  A USTR team visit will thus be a timely instrument to 
help the GOCR maintain its CAFTA-DR focus. 
 
¶9. (U) AUSTR Eissenstat has cleared this cable. 
 
SIEKERT