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### Viewing cable 08SANJOSE288, DAS MADISON URGES CAFTA IMPLEMENTATION, DISCUSSES

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
08SANJOSE288 | 2008-04-18 14:02 | 2011-03-07 18:06 | CONFIDENTIAL | Embassy San Jose

Appears in these articles:
http://www.nacion.com/2011-03-06/Investigacion/NotasDestacadas/Investigacion2702320.aspx
http://www.nacion.com/2011-03-06/Investigacion/NotasSecundarias/Investigacion2702325.aspx
http://www.nacion.com/2011-03-06/Investigacion/NotaPrincipal/Investigacion2702324.aspx
http://www.nacion.com/2011-03-06/Investigacion/NotasSecundarias/Investigacion2702326.aspx
http://www.nacion.com/2011-03-06/Investigacion/NotasSecundarias/Investigacion2702327.aspx

`

    VZCZCXYZ0001
    PP RUEHWEB

    DE RUEHSJ #0288/01 1091447
    ZNY CCCCC ZZH
    P 181447Z APR 08
    FM AMEMBASSY SAN JOSE
    TO RUEHC/SECSTATE WASHDC PRIORITY 9606
    INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
    RUEABND/DRUG ENFORCEMENT ADMIN HQ WASHINGTON DC
    RUEKJCS/SECDEF WASHDC
    RHMFISS/CDR USSOUTHCOM MIAMI FL

` `

    C O N F I D E N T I A L SAN JOSE 000288

    SIPDIS

    SIPDIS

    DEPT FOR WHA DAS MADISON, WHA/CEN, WHA/PPC AND EEB
    PLEASE PASS TO USTR AMALITO/DOLIVER

    E.O. 12958: DECL: 04/04/2018
    TAGS: ECON ETRD PGOV PREL SNAR CS
    SUBJECT: DAS MADISON URGES CAFTA IMPLEMENTATION, DISCUSSES
    SECURITY REFORM

    REF: A. SAN JOSE 238
         ¶B. STATE 26799
         ¶C. STATE 30767
         ¶D. SAN JOSE 263

    Classified By: CDA Peter M. Brennan for reason 1.4 (d).

    ¶1. (SBU) SUMMARY.  WHA DAS Kirsten Madison visited Costa Rica
    March 31-April 3 to urge the GOCR to quickly pass CAFTA
    implementation laws and address growing domestic security
    problems.  President Oscar Arias said he expected the CAFTA
    legislation would be passed in the next three months and he
    pledged to continue to push CAFTA as a top priority.  In
    meetings with pro-CAFTA legislators and the Ministry of
    Foreign Trade (COMEX), Madison said the U.S. appreciated the
    hard work done thus far, but the extended October 1
    entry-in-force deadline was solid and represented "one last
    opportunity" for Costa Rica.  In her meeting with Vice
    Minister for Public Security Gerardo Lascarez, Madison
    praised the outstanding USG-GOCR counternarcotics
    cooperation. She also briefed Lascarez on the Merida
    Initiative and underscored the need to confront
    narcotraffickers, terrorists and transnational criminals at
    every opportunity.  DAS Madison completed the visit with a
    visit to Sardimar, a seafood processing and canning company
    which currently enjoys CBTPA preferences and would benefit
    from CAFTA's permanent preferences, and a stop at the future
    site of the new Costa Rican Coast Guard station (DoD-funded)
    in Caldera.  END SUMMARY.

    ==========================================
    MEETING WITH PRESIDENT ARIAS AND FM STAGNO
    ==========================================

    ¶2. (C) With President Arias and FonMin Bruno Stagno on April
    1, DAS Madison discussed CAFTA, security including the Merida
    Initiative, Cuban migrant resettlement (Refs. A & C), the
    FARC, Public Security Minister Berrocal's resignation (Ref
    D), and Costa Rica's relationship with the region.  Arias
    underscored that:

     -- CAFTA implementation laws should be passed in the next
    three months and that the leading opposition party, PAC, had
    shown a new attitude to move the agenda along;

     -- security was the "number one concern" of the Costa Rican
    people; Stagno asked that Costa Rica not be "left
    out" of the Merida Initiative;

     -- there was no list of Costa Rican politicians associated
    with the FARC, despite ex-Minister of Public Security
    Berrocal's assertions; and

     -- regarding any connections between the FARC and Costa
    Rica, he was sending VP Laura Chinchilla, Stagno, and
    Attorney General Francisco Dall'anese to Bogota to consult
    with authorities there.  (NOTE:  The three visited Bogota on
    April 4-5.)

    ¶3. (C) Stagno told Madison that he was concerned about the
    possible membership of Cuba in the Rio Group, which he
    believed could diminish the importance of the OAS.  According
    to Stagno, during the March 17 OAS meeting that addressed the
    FARC crisis between Ecuador and Colombia, Brazil had
    expressed an interest to engage with Caribbean countries.
    Stagno emphasized that this could only mean that Brazil and
    other countries had expressed support for Cuba to join the
    Rio Group, including Panama and Chile.  Opening the Rio Group
    to Cuba, Stagno said, could marginalize OAS solidarity on
    Cuba.

    ¶4. (C) On security issues, Stagno said Central America
    suffered the terrible consequences of being wedged between
    Mexican and Colombian drug trafficking.  Stagno said Costa
    Rica would be grateful if Merida could become a reality.  He
    added that security in Costa Rica continued to be affected by
    the aftermath of the 1980s-era Nicaraguan conflict due to the
    large number of weapons in the country.  He said the GOCR was
    also concerned about the huge resettlement of Colombian
    refugees around 2000-2002.  Finally, Stagno said the
    possibility of Maras migrating south to Nicaragua and Costa
    Rica was a great cause for concern.

    =======================================
    TRADE: THE DEVILISH DETAILS OF CAFTA
    =======================================

    ¶5. (SBU) DAS Madison met with Vice Minister Amparo Pacheco of
    the Ministry of Foreign Trade (COMEX) on the status of CAFTA
    implementation.  While praising COMEX's hard work on
    ratifying CAFTA and its ongoing work with USTR and the
    National Assembly, Madison underscored to COMEX the necessity
    of finishing CAFTA implementation before the  October 1
    deadline.  Pacheco and COMEX Director Gabriela Castro
    highlighted the challenges of working with the National
    Assembly on CAFTA, specifically the acute sensitivity of some
    legislators to "CAFTA plus," that is, any bill which permits
    greater latitude than what is required by CAFTA.

    ¶6. (SBU) On the USTR-COMEX dialogue, Pacheco and Castro noted
    that intellectual property (IP) continued to be a
    controversial issue.  However, the April 9 and 11 meetings
    with USTR in Washington could provide an opportunity for
    progress.  On insurance, the GOCR,s support remained firm
    for a government guarantee for state insurance entity INS,
    but both officials reasoned that the execution of such a
    guarantee was highly unlikely.  Also, COMEX was uncertain
    about the concept of a private guarantee fund as an offset to
    the government guarantee of INS.  On the topic of
    regulations, COMEX was cautiously confident about timely
    completion.

    ¶7.  (SBU) COMMENT: Three days after this meeting, the Supreme
    Court's Constitutional Chamber returned one of
    the CAFTA-related IP bills to the National Assembly for
    modification.  The Chamber argued that proposed IPR violation
    penalties were "an infringement of the principles of
    reasonable and proportional penalties" while the proposed
    confiscation of counterfeit products from purchasers was a
    violation of private property rights.  The ruling may
    complicate the COMEX-USTR dialogue.  END COMMENT.

    =================
    TRADE: EU STATUS
    =================

    ¶8. (SBU) DAS Madison asked about the status of the Central
    American trade negotiations with the EU and what
    effects, if any, those had on COMEX's complicated and
    sometimes delicate CAFTA-related work.  Pacheco made clear
    that CAFTA was the number priority for COMEX.  She explained
    that EU talks were focused on political, cooperative, and
    trade relations and thus were different in character from the
    CAFTA discussions.

    ========================================
    TRADE IN PRACTICE AND CAFTA CONSEQUENCES
    ========================================

    ¶9. (U) The seafood processing and packing company Sardimar
    hosted DAS Madison for a presentation and factory tour at its
    facility near Caldera on April 2.  With a primary business of
    tuna processing and canning, Sardimar employs 1400 people
    (and 6000 indirectly) in a modern facility that was
    constructed in 2002 at a cost of USD 80 million.  The
    Sardimar product is marketed in 26 countries (primarily in
    the Americas and Europe) under multiple brand names which
    serve distinct market segments at varying price points.

    ¶10. (U) In the presence of local media and one of the
    Diputadas from the Puntarenas region, Company President Tomas
    Gilmore presented a compelling story of innovation in plant
    operations, market strategy, and corporate responsibility,
    stressing that the successes of this Costa Rican owned
    company and its business strategy are directly linked to
    trade preferences granted under CBTPA.  Though enthusiastic
    about the firm's accomplishments in Costa Rica, Gilmore had
    no doubts that he would have to move a significant proportion
    of the company's operations to El Salvador in the event that
    CAFTA is not implemented and CBTPA is not renewed.  In such a
    scenario, the local economy of Caldera and nearby Puntarenas
    would suffer a major employment and economic setback.
    Gilmore estimated that Sardimar's current tariff of 4.6
    percent would jump to over 30 percent if CAFTA were not
    implemented by October 1.

    =================================
    SECURITY: THE PRIVATE SECTOR VIEW
    =================================

    ¶11. (U) During DAS Madison's breakfast with AmCham members,
    she thanked the organization for its active support of CAFTA

    during the 2007 referendum and its continuing CAFTA support
    during the implementation process.  Security issues weighed
    heavier on AmCham's mind, however.  The members expressed
    concern about the deteriorating domestic security situation
    in general for Costa Rica, and in particular for their
    employees.  They questioned on what the Merida Initiative
    would mean for Costa Rica and what, if anything, AmCham could
    do.  DAS Madison noted that U.S. companies might have some
    valuable insights for the U.S. Congress on the consequences
    that security realities in Central America have for U.S.
    investors.

    ¶12. (U) Michael Borg, AmCham president, said the unrest over
    security was "just the beginning," and that the threat of
    transnational crime in Costa Rica could scare away future
    investors.  Carlos Denton of CID-Gallup told us that the
    Maras were beginning to infiltrate Nicaragua and were trying
    to recruit in Costa Rica, with their main goal in Costa Rica
    being linkages with local gangs.  Borg and the AmCham team
    agreed that the best way to approach the GOCR on their
    security concerns would be to frame it in terms of caring for
    their employees and their families.

    ============================================= ===========
    SECURITY:  THE VIEW FROM THE MINISTRY (AND IN THE FIELD)
    ============================================= ===========

    ¶13. (SBU) Due to former Minister of Public Security Fernando
    Berrocal's resignation the day before her arrival, DAS
    Madison met with Vice Minister Gerardo Lascarez, whose
    portfolio includes counternarcotics.  Madison briefed
    Lascarez on the Merida Initiative (Ref B) and thanked him for
    GOCR's record-breaking year of drug seizures for 2007.
    Madison emphasized Merida's regional approach and that all of
    Central America needed to work together to deny
    narcotraffickers and criminals easy transit through the zone.
     Lascarez appreciated the briefing and any assistance the
    U.S. could provide.

    ¶14. (U) With media in tow, DAS Madison also visited the site
    of the future Costa Rican Coast Guard (SNGC) station in
    Caldera, approximately 20 miles from the current station in
    Puntarenas on the Pacific Coast.  Martin Arias, SNGC
    Director, showed Madison the blueprints for the new station,
    to be funded largely by $1.25 million in DoD/SOUTHCOM Section
    1004 funds.  (Announcement of the USG contribution was
    reported in the media and circulated in a SNGC press
    release.)  The new station will include an operations center
    and barracks, maintenance facility, dry dock, expanded pier,
    and classrooms for the new coast guard academy.  The Caldera
    facility will eventually house at least four of the six main
    patrol boats the SNGC operates, including their 105-foot
    vessel.

    ¶15. (U) DAS Madison has cleared this cable.
    HENIFIN

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