VZCZCXYZ0006
OO RUEHWEB

DE RUEHSJ #1194/01 3562008
ZNR UUUUU ZZH
O 222007Z DEC 09
FM AMEMBASSY SAN JOSE
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0160
INFO WHA CENTRAL AMERICAN COLLECTIVE IMMEDIATE

UNCLAS SAN JOSE 001194 
 
SENSITIVE 
SIPDIS 
DEPT FOR EEB/TPP/BTA DGROUT AND RMANOGUE, WHA/EPSC SGARRO, EBB/TPP/IPE LHUGHES 
AND JURBAN 
PLEASE PASS TO USTR AMALITO AND DOLIVER 
PLEASE PASS TO TREASURY SRALSTON AND ENEPHEW 
PLEASE PASS TO COMMERCE 
 
E.O. 12958: N/A 
TAGS: ETRD KIPR ECON CS PREL PGOV
SUBJECT: COSTA RICA WILL NOT PASS THE LAST CAFTA-DR BILL BY DECEMBER 
31 DEADLINE 
 
REF: SAN JOSE 969 
 
¶1. (U) SUMMARY The Ministry of Foreign Trade (COMEX) informed us 
that Costa Rica will not meet the December 31 deadline for passing 
the 14th CAFTA-DR law regarding technical corrections to 
intellectual property rights (IPR) laws.  COMEX pressed for a 5 to 
6 month extension to avoid withholding a CAFTA-DR sugar quota 
benefit.  Meanwhile, COMEX has been unable to reach agreement with 
USTR on agro-chemical regulations and is considering taking the 
issue to a CAFTA-DR disputes panel.  End summary. 
 
 
 
------------------------------- 
 
ANOTHER GOCR EXTENSION REQUEST? 
 
------------------------------- 
 
 
 
¶2. (U) On December 11, COMEX Minister Marco Vinicio Ruiz told 
Charge Peter Brennan that the GOCR will not meet the December 31 
deadline for obtaining passage of a law regarding technical 
corrections to IPR legislation.  This is the 14th and final law 
that Costa Rica agreed to pass in order to align its legislation 
with the U.S.-Central America-Dominican Republic free trade 
agreement (CAFTA-DR).  Minister Ruiz presented a case for an 
"extension" of the deadline for withholding the CAFTA-DR quota 
benefit for sugar.  USTR designed the quota holdback to take effect 
by default if the GOCR did not meet the December 31 deadline.  The 
GOCR and USTR had agreed on this issue on December 8, 2008.  Post 
understands that Minister Ruiz made a similar appeal to AUSTR 
Everett Eissenstat. 
 
 
 
¶3. (SBU) Charge Brennan responded that an extension was unlikely. 
Costa Rica has had a year to complete the work, and the current 
mood in Washington favored strict enforcement of trade agreements. 
That said, he noted that Costa Rica's 2010 CAFTA-DR quota would 
only be delayed until it passed the law. 
 
 
 
--------------------------- 
 
HOW TO JUSTIFY AN EXTENSION 
 
--------------------------- 
 
 
 
¶4. (U) COMEX Director Esteban Aguero made a similar case to Econoff 
and linked the GOCR's argument for an extension to two issues: 
 
 
 
(1) Practicality -- the technical IPR corrections do not affect the 
day-to-day trade relationship. 
 
 
 
(2) Presidential Politics -- Aguero painted a scenario where 
opposition candidates would use the failure to obtain passage of 
the 14th law to attack National Liberation Party (PLN) presidential 
candidate Laura Chinchilla and current President Oscar Arias. 
Chinchilla was Arias' Vice President until she resigned in October 
2008 to run for president.  (Comment:  We do not anticipate this 
being a significant political issue.  If it were brought up in the 
campaign, the opposition would also receive its share of blame, as 
it obstructed passage of all legislation related to CAFTA-DR.) 
 
 
 
 
------------------------------------- 
 
ARE THERE OTHER COMPLICATING FACTORS? 
 
------------------------------------- 
 
 
¶5. (SBU) Aguero also described to Econoff COMEX's desire to use a 
USG-granted extension to gain leverage within the GOCR.  COMEX has 
been unable to reach agreement with USTR on agro-chemical 
regulations, due to resistance from the Ministries of Economy and 
Agriculture.  The GOCR is confident of its interpretation and is 
considering taking the issue to the CAFTA-DR disputes panel. 
According to Aguero, if the USG granted an extension, COMEX could 
raise the regulatory issue to President Arias and persuade him to 
accept USTR's position.  A presidential decision would obviate the 
need to take the issue to a disputes panel.   Adding another 
complication, the language in the 14th bill needs to be changed to 
link with the agro-chemical regulations currently under 
negotiation. 
 
 
 
¶6. (SBU) Both Aguero and Minister Ruiz also shared with the Embassy 
that a major shipment of sugar was scheduled to depart from Costa 
Rica on December 26 bound for U.S. delivery after January 1.  The 
holdback of the sugar quota -- effective January 1 without a 14th 
law and regulations -- will jeopardize the pricing of this shipment 
and likely result in the U.S. buyers canceling the contract. 

BRENNAN