VZCZCXYZ0005
OO RUEHWEB

DE RUEHSJ #0541/01 1752256
ZNR UUUUU ZZH
O 232256Z JUN 08
FM AMEMBASSY SAN JOSE
TO RUEHC/SECSTATE WASHDC IMMEDIATE 9876
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC PRIORITY

UNCLAS SAN JOSE 000541 
 
SENSITIVE 
 
SIPDIS 
 
DEPT FOR WHA/CEN, WHA/EPSC, WHA/PPC AND EEB; 
PLEASE PASS TO USTR:AMALITO/DOLIVER 
 
E.O. 12958: N/A 
TAGS: CS ECON ETRD PGOV PREL
SUBJECT: SCENESETTER FOR AUSTR EISSENSTAT'S VISIT TO COSTA RICA: 
         GOCR READY FOR FINAL LEGISLATIVE PUSH? 
 
REF: A. SAN JOSE 410 
 
     ¶B. SAN JOSE 508 and previous (NOTAL) 
 
¶1. (SBU) SUMMARY: Embassy San Jose warmly welcomes AUSTR Everett 
Eissenstat and his team. The Arias administration seems prepared 
for a final political push on the remaining CAFTA-DR legislation, 
and sees the AUSTR visit as an essential component of that push. 
GOCR officials evince confidence about completing all 
CAFTA-related bills and regulations in time to meet the October 1 
certification deadline, but they know the road ahead is steep. 
Although eight of 13 CAFTA-related bills have been completed, the 
five remaining touch on controversial intellectual property (IP), 
insurance and biodiversity issues.  The GOCR's best case scenarios 
project completion of the final legislation in August-September, 
well after the informal mid-July legislative deadline suggested 
during Eissenstat's April visit (Ref A).  The four CAFTA-related 
telecommunications regulations are currently undergoing final 
review, and are expected to be completed in August.  We agree that 
the time is right for the AUSTR visit.  The Arias administration is 
convening all the leaders of its pro-CAFTA legislative coalition, plus 
key private sector representatives for a (long overdue) pep talk. (SEE 
REVISED SCHEDULE, PARA 9.) The legislators know that Costa Ricans from 
across the political spectrum want to close the CAFTA chapter and move 
on to other important issues.  As from the start of this long and 
winding road, success continues to depend on the GOCR sustaining its 
political discipline and focus. END SUMMARY. 
 
------------------ 
THE POLITICAL PUSH 
------------------ 
 
¶2. (SBU)  The GOCR views this AUSTR visit as primarily political, and 
part of a broader concerted effort to energize the legislature.  On 
June 19, Minister of the Presidency Rodrigo Arias described the other 
components of this "push" to the Ambassador.  Arias will convene the 
entire PLN party faction on June 23 to get them in line.  There 
will be no legislative travel (and perhaps no recess) until the 
CAFTA work is completed.  On June 25, Arias is to meet with 
"moderate" legislators from the opposition PAC party, including new 
faction leader Francisco Molina, to agree on a way forward. 
Arias does not expect any PAC member to support CAFTA, but he believes 
a small group can be persuaded not to stand in the way.  Arias is 
also counting on help from ex-PAC member Andrea Morales (who left 
her party and declared herself an independent on June 13).  The 
embattled Morales chairs the Juridical Committee, which is working 
on the remaining IPR bill.  With all 38 votes in the pro-CAFTA 
coalition required to keep the final bills moving, and with 
fissures periodically appearing in that coalition, Arias is looking 
for a little wiggle room, in the form of one or two more votes to 
guarantee quorum, approve extra sessions, and make better use of the 
legislature's crowded calendar. 
 
¶3. (SBU) The Ministry of Foreign Trade (COMEX) views the AUSTR visit as 
an opportunity to reiterate directly to legislators the CAFTA 
certification requirements, and to make very clear what is required for 
CAFTA compliance.  COMEX staff tells us that they do not see Eissenstat 
as stepping in "between" the GOCR and the legislature.  Instead, they 
view AUSTR's message as reinforcing their own, i.e., that the 
legislative details COMEX is insisting upon are in fact necessary for 
the implementing legislation to be CAFTA-compliant.  COMEX does not 
expect (or want) AUSTR to be drawn into a detailed discussion of 
technical details (although time is built into the visit schedule for 
separate staff-level discussions, see below).  In addition, COMEX hopes 
the AUSTR visit will spark a positive dialogue with the pro-CAFTA 
coalition, which will generate "creative" solutions to pending issues. 
 
----------------------- 
THE LAGGING LEGISLATION 
----------------------- 
 
¶4. (SBU) Since AUSTR Eissenstat's last visit, progress has been spotty. 
Four bills (The Budapest Treaty, The International Agreement on 
Trademark Rights, the UPOV Convention bill, and the bill opening the 
telecommunications sector) have been signed into law.  The latter is 
still pending publication in the official gazette, the last step in 
implementation.  The remaining five bills have been challenging, more 
often because of problems within the pro-CAFTA G38 coalition than from 
opposition without.  The five-member Libertarian Party (ML) and one 
member of the Social-Christian Unity Party (PUSC) have been the most 
troublesome in the last two months, blocking quorum, opposing fast 
track rules and questioning substantive details (such as in IPR 
penalties).  The GOCR believes it has overcome these obstacles and that 
all 38 members of its coalition (perhaps aided by a few moderate 
members of the opposition) are finally ready to move on. 
 
¶5. (SBU) The following is a June 20 snapshot of the remaining 
legislation. The GOCR is counting on the August extraordinary 
session of the legislature to wrap up the remaining legislation, 
although it appears likely that at least one bill may not be fully 
approved (second vote) until early September: 
 
-- IPR enforcement:  The Second Plenary Commission is completing IPR 
penalty revisions (in Article 52) requested by the Constitutional 
Chamber (Sala IV) of the Supreme Court.  The GOCR is aiming for a first 
vote on the corrected bill the week of June 23.  If the corrected bill 
is sent to the Sala IV for review (as is expected) final approval would 
not take place before August; 
 
-- IPR catch-all bill ("number 12"):  Under debate in the Juridical 
Committee.  The GOCR is aiming for Committee approval by the end of 
June, and a first plenary vote in July.  Fast Track status was 
approved, which will limit debate, but the GOCR will need 38 votes to 
approve the extra sessions required to move quickly.  With the expected 
30-day Sala IV review, the GOCR is aiming for final approval in August 
or September.  GOCR officials acknowledge that the long delay caused by 
the ML party's stubborn debate about, and microscopic review of, this 
bill will likely make it the last to be approved.  One of the articles 
in the IPR enforcement bill opposed by the Sala IV (Article 71) was 
moved to this legislation; 
 
-- Insurance bill:  Was to emerge from completed Sala IV review on June 
7, but returned on June 4, instead, to "clarify" why some documents 
were missing from the package submitted to the Court.  This technically 
requires another full 30-day Sala IV review.  GOCR officials see this 
as a blatantly political maneuver by one of the two anti-CAFTA 
magistrates in the Sala IV.  The original package has been corrected 
and re-submitted, and GOCR officials believe the Sala IV will not take 
another 30 days to issue a ruling.  They are hopeful for final approval 
in late July or August; 
 
-- Telecom modernization bill: Under Sala IV review.  Should return to 
the legislature in early July, with the GOCR aiming for final approval 
in late July or August; and, 
 
 
-- Amendments bill:  Voted out of committee on June 13, but some text 
was missing.  The bill may have to be corrected in plenary debate. 
Fast Track status was approved, but 38 votes will be needed to schedule 
the extra sessions required.  GOCR aiming for plenary debate to begin 
in early July, followed by Sala IV review (by early August) and final 
approval later in August. 
 
--------------------------------- 
REMAINING ISSUES (AND REGULATIONS) 
--------------------------------- 
 
¶6. (SBU) While all the pending legislation is urgent at this point, 
three specific issues are being cited with particular concern: 
biodiversity, IPR data protection, and insurance.  The following is our 
understanding at this point, but USTR would likely have more details: 
 
-- COMEX believes the biodiversity concerns are held by only a few 
legislators, and can be overcome by AUSTR "clarifying" the USG 
position.  Revised legislative language may not be required; 
 
-- The IPR data protection issues can be resolved by more technical 
staff-level discussion, according to COMEX; (On that issue, Fedefarma 
contacts tell us that there is no new health bill before the 
legislature.  The bill that was on the agenda was pulled some months 
ago by the Health Ministry for further review); 
 
-- On insurance, the GOCR believes a legislative solution (which has 
been rejected as too politically difficult by GOCR officials, pro-CAFTA 
legislators and the private sector) is off the table, and that another 
mechanism (such as a side letter) can be found to resolve the national 
guarantee issue; and 
 
-- On IPR penalties, Minister Arias and other GOCR leaders are 
confident the penalty regime worked out in recent discussions with USTR 
has satisfied concerns about that issue. 
 
¶7. (SBU)  The four telecommunications regulations which are also part o 
CAFTA implementation are currently going through an internal final 
review. The four regulations are: 1) Access and Interconnection, 2) 
General Communications, 3) Competition, and 4) Access and Universal 
Service.  The three entiies charged with writing the regulations are 
the Ministry of Environment, Energy and Telecommunications (MINAET); 
the regulatory authority ARESE, through its future telecommunications 
superintendency SUTEL; and COMEX.  (Note that SUTEL will be established 
under the telecom modernization bill when it becomes law.)  The final 
versions of these regulations will go through a public audience and 
 
 
review process and are expected to be published in August. 
 
------- 
COMMENT 
------- 
 
¶8. (SBU)  The GOCR knows what it needs to do in order to pass the 
remaining CAFTA legislation and seems re-committed to doing it.  The 
GOCR, the pro-CAFTA coalition and even the opposition are all tired of 
CAFTA and eager to get on with other business before the 
pre-2010 election maneuvering (which has already begun) dominates 
domestic politics next year.  As recently as one week ago, key PLN 
legislators and legislature staff were not optimistic that all CAFTA 
bills could be completed even by September.  We have seen this 
despondency-determination cycle before, however, in the sense of drift 
last November which was replaced by a sense of purpose in the 
legislature from December-March.  The GOCR needs to light that 
sort of fire again.  The highest levels of the government remain 
completely seized by CAFTA.  The President spoke of little else 
when the Ambassador called on him June 12, for example. CAFTA is 
the Arias administration's top priority, and is closely identified 
with the President himself. The Arias brothers know that if they 
can't follow through on this, they may not be able to follow through 
with other essential pending initiatives on domestic security or 
energy.  AUSTR Eissenstat's visit thus comes at an opportune moment. 
The Ambassador recommends that the three-fold message should be: no 
renegotiation; no second extension; and a warning that Costa Rica, once 
the region's CAFTA leader, is now falling further and further behind. 
These familiar themes bear repeating over and over again here.  END 
COMMENT. 
 
------------------------ 
VISIT SCHEDULE (REVISED) 
------------------------ 
 
¶9. (SBU) The following is the schedule as of 1500 local on June 23.  It 
has been revised from earlier versions, to split the meetings with 
legislators into three sessions.  A more detailed version was emailed 
to USTR and will be available to AUSTR and team upon arrival.  COMEX 
will provide interpretation for all events involving AUSTR: 
 
TUESDAY, JUNE 24 
 
0900-1000: MEETING WITH GOCR EXECUTIVE BRANCH AND SOME LEADERS OF THE 
G38 PRO-CAFTA COALITION, President's Office 
(Ministers Arias and Ruiz will lead the GOCR side.) 
 
The strongest CAFTA supporters in the legislature will be included 
(from the President's PLN party and the PUSC party). 
 
This session would "frame the day's objectives," according to COMEX. 
Because the GOCR's closest allies are participating, COMEX believes 
that "nothing should be held back" with this group, and that this 
session should be/can be more candid that the later sessions with other 
party members.  COMEX also believes these legislators will ask what 
happens if the implementing legislation is not done in time. 
 
1030-1230: MEETING WITH OTHER LEADERS FROM G38 PRO-CAFTA COALITION, 
CHATEAU RESTAURANT, SAN PEDRO 
(Minister Ruiz, Amb. Duenas, VM Thompson, and VM Pacheco will lead the 
GOCR side.) 
 
In the first segment, the AUSTR and GOCR teams will meet with 
independent, but pro-CAFTA legislators.  In the second segment, the 
AUSTR and GOCR teams will meet with members of the pro-CAFTA (but more 
problematic) ML party. 
 
These sessions are not to "substitute" for the "lobbying" work COMEX 
must do (according to COMEX staff), but they afford an opportunity to 
better "explain" the USG position.  The discussion will focus on how to 
move ahead and complete the legislative work in time.  Legislators may 
seek to explain why the process is so uniquely slow in Costa Rica, but 
our focus should be to look forward, not backward. 
 
1230-1430:QWORKING LUNCH, CHATEAU RESTAURANT 
 
150O-1530:   OVERVIEW OF PENDING REGULATORY ISSUES (at COMEX) 
(Ministers Ruiz, Dobles, Amb, Duenas and VM Thompson lead GOCR side.) 
 
1530-1630:QWRAP-UP MEETING WITH GOCR EXECUTIVE BRANCH 
(Ministers Ruiz, Amb. Duenas and VM Thompson lead GOCR side.) 
 
This session should agree on next steps and a way ahead. 
 
1900-2100:QRECEPTION HOSTED BY AMBASSADOR CIANCHETTE (Ambassador's 
 
Residence) 
 
Note that the morning of June 25 has been left open for possible 
follow-on meetings before AUSTR departs.  USTR team remains until June 
26 for possible follow-up technical meetings.  COMEX reconfirmed on 
June 23 that follow-on meetings may be scheduled as a result of the 
June 24 sessions. 
 
 
CIANCHETTE