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### Viewing cable 07SANJOSE2070, COSTA RICA: INCHING TOWARDS CAFTA IMPLEMENTATION

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
07SANJOSE2070 | 2007-12-19 21:09 | 2011-03-02 16:04 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy San Jose
Appears in these articles: http://www.nacion.com/2011-03-02/Investigacion.aspx

`

    VZCZCXYZ0019
    PP RUEHWEB

    DE RUEHSJ #2070/01 3532128
    ZNR UUUUU ZZH
    P 192128Z DEC 07
    FM AMEMBASSY SAN JOSE
    TO RUEHC/SECSTATE WASHDC PRIORITY 9293
    INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE PRIORITY
    RUEHDG/AMEMBASSY SANTO DOMINGO PRIORITY 1572
    RHEHNSC/NSC WASHDC PRIORITY

` `

    UNCLAS SAN JOSE 002070

    SIPDIS

    SENSITIVE

    SIPDIS

    DEPT FOR WHA, WHA/CEN, WHA/EPSC, AND EEB
    PLEASE PASS TO USTR: AMALITO

    E.O. 12958: N/A
    TAGS: PGOV PREL PINR ETRD CS
    SUBJECT: COSTA RICA: INCHING TOWARDS CAFTA IMPLEMENTATION

    REF: A) SAN JOSE 1975, B) SAN JOSE 1856

    ¶1. (SBU) SUMMARY: Costa Rica's coalition of 38 pro-CAFTA
    legislators (G38) has finalized two of the thirteen pieces
    of legislation the GOCR has identified as required to
    implement CAFTA-DR.  The national assembly (Asamblea) is
    working flat out, but that is not likely to be enough to
    complete the other eleven bills in time, given the
    Asamblea's cumbersome rules and the stubborn delaying
    tactics of the opposition.  Further complicating the
    situation, the Ministry of Foreign Trade (COMEX) and USTR
    have yet to complete implementation review consultations.
    Debate-driven legislative changes in the Asamblea or
    different-than-expected outcomes in the COMEX-USTR review
    may present new obstacles to completing implementation on
    time.  In our view, prospects are slim that the GOCR will
    achieve the March 1 deadline.  END SUMMARY.

    =================
    GLACIAL MECHANICS
    =================

    ¶2. (U) In order to understand the challenges facing the
    G38, it is helpful to have a brief overview of Costa Rican
    legislative mechanics.  The Asamblea operates methodically
    and deliberately due to a cumbersome, multi-layered system
    of checks and balances.  The principal elements of the
    legislative process are (1) assignment to committee; (2)
    review of amendments accumulated in committee; (3) first
    plenary debate and vote; (4) second plenary debate and
    vote, and (5) enactment into law.  The second debate is to
    confirm the voting in the first, but often takes place
    after judicial review by the constitutional chamber (Sala
    IV) of the Supreme Court.  Some legislation automatically
    requires Sala IV review.  As few as 10 diputados may also
    petition for a review, meaning that most legislation,
    especially controversial items, face constitutional
    scrutiny.  In either case, the Sala IV has up to 30 days to
    issue its ruling.  If the Sala IV finds no fault, the
    legislation moves to the second plenary for the confirming
    vote.  Disapproval by the Sala IV returns the bill all the
    way back to committee for "correction."  The PAC-led
    opposition has vowed to take nearly all the CAFTA-DR
    implementing legislation to the Sala IV.

    ¶3. (U) Normal Asamblea rules do not restrict debate on a
    bill, allowing intransigent legislators to stretch the
    process indefinitely.  However, the GOCR has applied a new
    "fast-track" rule (Article 41bis of the legislative rules
    of procedure) which permits a supermajority of legislators
    to limit the number of plenary sessions to 22 (with an
    option for up to six more) on any given bill.  In addition,
    the Asamblea has created a "streamlined" mechanism whereby
    bills can be assigned to a mini-plenary that consists of a
    total of 19 legislators.  These mini-plenaries have the
    same debate and approval power of the full plenary.

    =====================
    SO, WHAT'S THE SCORE?
    =====================

    ¶4. (U) With the above as background, this is the status of
    the 13 items of implementing legislation as of December 18:

    To be introduced:        1
    In Committee:            1
    In Plenary/Mini debate:  9 (8 under fast track rules)
    Under Sala IV review:    0
    Approved:                2

    The approved legislation includes the dealer protection
    (casas extranjeras) and anticorruption (codigo penal) laws.

    ==========
    HOT ISSUES
    ==========

    ¶5. (SBU) In parallel with the legislative process, the
    Ministry of Foreign rade (COMEX) and USTR continue their
    implementaton review.  COMEX reports that intellectual
    proprty rights (IPR) remain a hurdle.  Progress reportedly
    has been made in reaching an understanding on the penalty
    regime for IPR violations.  A second issue is the lack of
    clarity between the GOCR's existing law on biodiversity and
    the proposed bill on patents.  COMEX worries that
    legislative efforts to amend the biodiversity law to "clean
    up" any perceived contradictions with TRIPS or with the
    patent bill will be extremely contentious and possibly
    splinter the G38.  Adoption of the UPOV convention is also
    generating significant controversy, with one petition
    pending before the Election Tribunal to hold the next
    national referendum on this convention.  (COMMENT: The
    Tribunal is to rule on this in January.  We expect they
    will say no.  END COMMENT.)

    ¶6. (SBU) Other key issues include opening the
    telecommunications and insurance sectors, both of which
    face vociferous opposition from some public-sector unions.
    Members of the PAC-led opposition have told us that their
    strongest opposition will continue to be on Telecom issues.
    With the legislative and implementation review tracks
    moving in parallel, there is always a risk that the content
    of a bill in the Asamblea might veer away from USTR
    principles, particularly when COMEX and USTR do not agree
    on all issues.  In addition, there are several CAFTA-DR
    obligations that the GOCR will address through regulations,
    such as SPS equivalence.  While COMEX and the G38 have made
    progress in moving the CAFTA-DR implementing legislation
    through the Asamblea, the GOCR is still drafting the needed
    regulations, which it hopes to conclude by mid-January.

    ============================
    MARATHON WORK SCHEDULE . . .
    ============================

    ¶7. (U) The G38 is expending considerable energy to move the
    legislation.  Starting December 1, when the Executive sets
    the agenda in the Extraordinary Session, the Asamblea work
    schedule was extended to include evening and weekend
    sessions, a highly-unusual step indicative of the Arias
    Administration's intent to complete the legislation in
    time.  In public comments, both Arias brothers (the
    President and the Minister of the Presidency) have stressed
    the need to complete the Asamblea's work by January 15, in
    order to allow time for the expected Sala IV reviews and to
    complete final regulatory measures by March 1.

    =========================
    BUT A STUBBORN OPPOSITION
    =========================

    ¶8.  (SBU) Small numbers of hard-core CAFTA opponents
    (including students and union members) continue to threaten
    a few diputados and their families, picketing their homes
    in some cases.  Inside the Asamblea, PAC members often walk
    out of the chamber (or refuse to enter), preventing a
    quorum.  The opposition also employs other familiar
    obstructionist tactics, such as unleashing long-winded
    diputado Jose Merino del Rio (Frente Amplio) for one of his
    trademark six-hour filibusters, or dumping as many as 1000
    amendments on bills under consideration.

    ¶9. (SBU) The PAC is under some pressure, including from its
    own members, to stop blocking the "will of the majority"
    who voted for CAFTA ratification in the October 7
    referendum.  This has opened some fissures in the party's
    Asamblea faction, but PAC leadership remains determined and
    disciplined.  They acknowledge that CAFTA will happen in
    Costa Rica, but they insist that meeting the March 1
    deadline (which they see as artificial) is the GOCR's
    "problem" and not PAC's.

    =====================================
    ...AND AN EXHAUSTED, BRITTLE COALITION
    =====================================

    ¶10. (U) The G38 itself faces internal problems, including
    members' health issues (e.g., one legislator receives
    cancer treatment early in the morning and then repairs to
    the Asamblea to establish quorum in the afternoon) and
    wavering coalition members, especially the problematic
    Libertarian Movement (ML) party.  With a two-thirds
    majority required to overcome most obstacles or speed up
    action, the G38 has precisely the needed number, with no
    margin for error (or absence).  All 38 members are needed
    to be on hand, all the time, to establish quorum, and to
    keep things moving.

    ¶11. (U) The expanded work schedule, longer hours, and tense
    work environment have taken a toll on not only the
    legislators, but also on exhausted Asamblea staff.  It
    remains to be seen how quickly legislators will regain the
    momentum after the holiday recess.  Our contacts report
    that the Asamblea will work through at least December 21,
    if not through December 24, probably returning on January 2
    or January 7.  Though the final recess calendar has yet to
    be approved, our contacts report that the Asamblea will
    more than likely work through at least December 21 and
    probably return to work on January 7.  That would leave a
    mere nine days until the GOCR's self-imposed January 15
    deadline, even working weekends.

    =======
    COMMENT
    =======

    ¶12. (SBU) To its credit, the Arias administration is
    maintaining a full court press and has not asked the USG
    (or other CAFTA members, as far as we know) to consider an
    entry-into-force extension.  We expect such a request to
    come next month.  As we've noted previously (reftels), the
    prospects remain unlikely for the GOCR to clear all
    implementation hurdles in time.  The timetable may be
    technically possible, but it does not appear to be
    politically feasible.  On December 11, a former cabinet
    minister told the Ambassador that there was "zero chance"
    of the GOCR meeting the 1 March deadline.  On December 12,
    a senior opposition figure told us it would be
    mathematically impossible to complete all the legislative
    work in time (although quite possible, he said, with an
    extension of two to three months).

    LANGDALE

`