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### Viewing cable 07SANJOSE1571, MOVEMENT ON IMPLEMENTATION LEGISLATION UNLIKELY

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
07SANJOSE1571 | 2007-08-22 21:09 | 2011-03-02 16:04 | CONFIDENTIAL | Embassy San Jose
Appears in these articles: http://www.nacion.com/2011-03-02/Investigacion.aspx

`

    VZCZCXRO7469
    PP RUEHAO RUEHCD RUEHGA RUEHGD RUEHHA RUEHHO RUEHMC RUEHNG RUEHNL
    RUEHQU RUEHRD RUEHRG RUEHRS RUEHTM RUEHVC
    DE RUEHSJ #1571/01 2342131
    ZNY CCCCC ZZH
    P 222131Z AUG 07
    FM AMEMBASSY SAN JOSE
    TO RUEHC/SECSTATE WASHDC PRIORITY 8726
    INFO RUEHWH/WESTERN HEMISPHERIC AFFAIRS DIPL POSTS PRIORITY
    RUEHDG/AMEMBASSY SANTO DOMINGO PRIORITY 1551

` `

    C O N F I D E N T I A L SECTION 01 OF 03 SAN JOSE 001571

    SIPDIS

    SIPDIS

    DEPARTMENT FOR WHA/CEN, WHA/EPSC AND EEB; PASS TO USTR
    AMALITO

    E.O. 12958: DECL: 08/22/2017
    TAGS: ETRD PGOV PINR PREL CS
    SUBJECT: MOVEMENT ON IMPLEMENTATION LEGISLATION UNLIKELY
    BEFORE CAFTA REFERENDUM IN OCTOBER

    REF: SAN JOSE 830

    Classified By: ADCM David E. Henifin per 1.4 (d)

    ¶1.  (SBU) SUMMARY:  The Arias Administration expects
    little or no action on CAFTA implementing legislation
    before the October 7 referendum.  Pro-CAFTA coalition
    in-fighting, coupled with stubborn stalling tactics by the
    PAC-led opposition, have blocked quorums and buried the
    GOCR,s legislative agenda in contentious wrangling.  To
    turn down the political heat (which could have a negative
    impact on the pro-CAFTA referendum campaign) Minister of
    the Presidency Arias ordered the implementing bills pulled
    from this month,s extraordinary session of the Asamblea.
    Action in September, during the next ordinary session, is
    technically feasible but may be politically impossible,
    with the referendum just five weeks later.  The Arias
    Administration is counting on a "Si" win on October 7 to
    re-glue its fractured legislative coalition together and to
    roll over enough CAFTA opponents to complete all the
    required legislation by March 1, 2008.  This may be a very
    tall order.  Mandatory Supreme Court legislative review,
    likely final consultations on some issues with USTR, the
    required annual budget debate in November, and end-year
    holidays in December all stand between the referendum and
    implementation.  END SUMMARY.

    --------------------------------------------- ------------
    AS CAFTA CAMPAIGN HEATS UP, LEGISLATIVE ACTION COOLS DOWN
    --------------------------------------------- ------------

    ¶2.  (U) On August 15, Minister Rodrigo Arias made it
    official.  Ending speculation brewing since the start of
    the August extraordinary session (which is controlled by the
    Executive), he announced that the GOCR would not act on the
    13 pieces of CAFTA-related legislation until the next
    ordinary session, in September.  Citing problems within
    the government,s 38-seat coalition, in particular continued
    friction with and within the six-member Libertarian bloc,
    and criticizing the PAC-led opposition for refusing to
    permit a quorum for any CAFTA-related debate, the Minister
    said he did not want "to create more chaos" in the Asamblea
    by forcing action on items that were not "politically
    viable" at the moment.  He also said the GOCR wanted to
    "allow space" for the referendum to take place.

    ¶3. (SBU) In response to this GOCR "restraint" before the
    referendum, Arias called on all parties in the Asamblea to
    approve the implementing legislation after the referendum,
    as a reflection of the "popular will," should the "Si"
    vote win.   Opposition leaders applauded the GOCR,s
    "realistic" actions, but declined to make any pre-referendum
    commitments.  In exchange for their promise not to block
    implementing legislation should the "yes" vote win, PAC has
    insisted the GOCR agree to take no further action on
    CAFTA-related legislation, should the "no" side win.  The
    GOCR has declined to make such a deal.   This fundamental
    disagreement, plus tight control by PAC faction leadership,
    apparently torpedoed quiet GOCR-PAC negotiations on the
    CAFTA implementing agenda in June and July.

    -------------------------------------------
    COMEX:  LOOK FOR MOVEMENT BEHIND THE SCENES
    -------------------------------------------

    ¶4.  (SBU) On August 10, Director General of Foreign Trade
    Gabriela Castro and Legislative Adviser Nelly Vargas of
    COMEX told ADCM and Econoff the GOCR feared that
    placing the implementing legislation on the legislative
    calendar now might be seen as an attempt to move
    ahead on CAFTA before the people have had their say on
    October 7.  The public reaction would be negative.

    ¶5.  (SBU) The decision to postpone action is not all bad,
    according to Castro and Vargas.  While the PAC-led
    opposition was boycotting plenary sessions (and taking full
    advantage of their "free time" to campaign for the "no"
    vote in the referendum), legislators in the GOCR,s
    coalition wasted three weeks virtually chained to the
    Asamblea building, trying to maintain a quorum for the
    implementing legislation.  Now, pro-CAFTA legislators would
    also be able to skip sessions to campaign in their home
    provinces.  (NOTE:  The pro-CAFTA coalition is exactly
    two-thirds of the legislature and thus theoretically
    sufficient to control the agenda, but only if all 38 members
    are present for every key vote, every day.)

    ¶6.  (SBU) Castro and Vargas did not completely rule out

    SAN JOSE 00001571  002 OF 003

    the GOCR reversing course and resuming pre-referendum
    action on the CAFTA-related bills at some point, if the
    political risk of doing so were deemed acceptable.
    They also stressed that not all work on the legislation
    is stalled.  While little/nothing is happening in the
    public eye, COMEX is continuing its discussions with USTR
    on each of the bills to ensure that the draft legislation
    meets Costa Rica,s CAFTA obligations.  In addition, there
    are a few regulatory decisions that must be made separate
    from the legislation, such as which entity will serve as
    the new telecom regulator.  Vargas confirmed that eight
    of the 13 bills on the GOCR,s implementing agenda are
    posed for action in the Plenary, while the remaining five
    bills are in committee.

    -------------------------------------
    THE LEGISLATURE:  TIME IS RUNNING OUT
    -------------------------------------

    ¶7.  (C) On August 15, PLN faction chief Mayi Antillon
    confirmed
    to ADCM that the GOCR will not proceed with CAFTA implementing
    legislation in August. She also predicted that movement
    during the
    regular session in September will be very difficult, unless
    the Arias Administration can finally discipline the
    Libertarians (ML).  Without their six votes, the GOCR,s
    38-seat, two-thirds majority is not guaranteed, with the ML
    "tail" wagging the GOCR "dog".

    ¶8.  (C) The faction was running in multiple directions,
    Antillon explained.  In early August, former faction head
    Evita Arguedas began unsanctioned negotiations with PAC
    party leader Otton Solis.  Antillon was adamant that
    the PLN did not want to grant any legitimacy or stature
    to Solis by involving him in the implementing legislation.
    Faction head aspirant Mario Quiros, a purist on
    legislative procedures, continues to bog down progress by
    myopic focus on process, according to Antillon.  Current
    faction head Luis Barrantes has been thin-skinned and
    petulant about the criticism of his faction, she added.
    Party leader (and 2010 presidential hopeful) Otto Guevara is
    campaigning for the "Si" vote, but could or would do
    nothing to rein in his party colleagues, Antillon said.

    ¶9.  (C) Minister Arias was so angry, according to Antillon,
    that he summoned Guevara for a series of meetings on August
    15 to clear the air.  It is time, says Antillon, for the
    Libertarians (ML) to make up their minds and fall in (or
    fall out) with the government once and for all on CAFTA.
    Obviously exasperated, she thought it might be easier to
    include a few moderate PAC members in a post-referendum
    working coalition (assuming a "Si" victory) than to
    continue babysitting the Libertarians.

    -----------------------------
    CAN THEY GET THERE FROM HERE?
    -----------------------------

    ¶10.  (SBU) On August 17, veteran Asamblea staffer Edel
    Reales was pessimistic.  With some careful
    behind-the-scenes pushing, if the Libertarians were
    on board, the GOCR could use the September session to
    position all the CAFTA implementing legislation for action
    as soon as possible after the referendum.   In his view,
    however, this was the absolute best case scenario;
    possible, but not probable.  Any real action more likely
    will have to wait until after the referendum, and the few
    months remaining pose a daunting challenge.   Given the
    likely recesses in September (for the referendum campaign)
    and December (end-year holidays), the mandatory budget
    debate in November, the required Supreme Court
    (Constitutional Chamber) review of all legislation, and the
    legislative rules which favor the minority (and
    obstructionists), in Reales, professional opinion, the GOCR
    will not be able to complete all the implementing
    legislation by March 1.

    ¶11. (SBU) Antillon, ever the politician, was less categorical.
    Implementation will be extremely difficult, in her view,
    but she is withholding judgment until after the referendum.
    She and Reales both acknowledged that if Costa Rica did not
    make the Entry into Force deadline, the GOCR would have to
    seek an extension from all CAFTA members, not just the USG.

    -------
    COMMENT
    -------

    SAN JOSE 00001571  003 OF 003

    ¶12.  (SBU) Tactically, the GOCR,s actions may be
    understandable.  However, Costa Rica is going to be
    extremely hard-pressed to get all of the legislation
    passed by March 1 unless more progress is made before
    October 7.  The Asamblea,s historic inability to take
    decisive action engenders little confidence.   With
    or without the Libertarians, the Arias administration
    will need a decisive "yes" win in the referendum,
    a resulting groundswell of public opinion to get CAFTA
    done, legislator willingness to work together in response
    to that groundswell, and skillful use of all the
    legislative tools at its disposal to meet the March 2008
    implementation deadline.  For Costa Rica, this would
    be an extraordinary combination of political factors.
    Brennan

`