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