COALITION OF DEPUTIES URGE PRESIDENT TO MOVE

UNCLAS SECTION 01 OF 02 SAN JOSE 002038 SIPDIS SENSITIVE WHA/CEN EB FOR WCRAFT, BLAMPRON E FOR DEDWARDS WHA/EPSC FOR KURS, LGUMBINER STATE PASS TO USTR FOR RVARGO, NMOORJANI, AMALITO E.O. 12958: N/A TAGS: ETRD ECPS ECON PREL PGOV SOCI CS SUBJECT: COALITION OF DEPUTIES URGE PRESIDENT TO MOVE FORWARD ON CAFTA-DR REF: (A) San Jose 01828 (B) San Jose 01455 (C) San Jose 01692 (D) San Jose 02008 ¶1. (U) Summary. On August 29, 2005, thirty-eight of the 57 members (deputies) of the Costa Rican Legislative Assembly signed a letter to President Pacheco urging him to send the United States-Central American-Dominican Republic Free Trade Agreement (CAFTA-DR) to the legislative body immediately. Assembly members from the President's Social Christian Unity Party (PUSC),the National Liberation Party (PLN),the Libertarian Movement Party (ML),and two independent deputies signed the letter. This effort was spearheaded by the Assembly President, Gerardo Gonzalez (PUSC). The letter expressed the deputies' concerns about delaying the ratification process of the agreement that could "forge the development of the country." In a related story, the Administration on the same day officially submitted its complementary agenda to the Assembly. End Summary. ¶2. (U) The letter was signed by all but three of the 19 PUSC deputies. Ricardo Toledo, the PUSC presidential candidate for the February 2006 elections, said he supported the letter but could not sign because he was absent from the legislative session. All 15 of the PLN members signed the letter, as well as all five of the ML deputies, and two independents. The theme of the letter was the vital need to move ahead on CAFTA-DR by allowing the deputies to officially start discussions on the agreement. ¶3. (U) Gerardo Gonzalez is still discussing the possibility of a deputy introducing the agreement to the Assembly instead of waiting for the President to submit it. Various dailies on August 29, 2005, reported that Gonzalez was preparing to investigate this option with the Constitutional Court if the President does not respond to the deputies' written request. (Note: Most constitutional and political experts believe that only the President or a Minister of his Administration has the constitutional right to present such an international agreement to the Assembly.) -------------- -------------- COMPLEMENTARY AGENDA OFFICIALLY SENT TO THE ASSEMBLY -------------- -------------- ¶4. (U) In a related issue, the Administration officially presented its complementary agenda to the Assembly on August 29, 2005 (Ref C). The complementary agenda is mainly funded through loans. (Note: The Assembly is required to approve all new state debt, and as such has effective control over when and if this essential part of the CAFTA-DR package advances.) Reportedly, the Administration had planned to presented the complementary agenda in a formal public ceremony. However, due to the inability to coordinate various Ministers' schedules, the public event was cancelled. Gilberto Barrantes, Minister of the Economy and Chair of the President's Economic Council, addressed the press on this issue. ¶5. (U) Minister Barrantes did not provide much more detail than was previously released about the complementary agenda. In general, the complementary agenda is planned as a series of coordinated projects over the next five years to increase the global competitiveness of Costa Rican businesses so that they can take advantage of the opportunities presented by CAFTA-DR. Improving rural roads and highways, increasing efficiency of small- and medium- size businesses, streamlining of governmental processes, implementing educational initiatives, and helping promote sustainable agriculture are some of the projects integral to the complementary agenda. Funding will be provided by loans from the Inter-American Development Bank (IADB) (loans of USD 117 million and USD 15 million),the World Bank (USD 30 million),and the Central American Bank of Economic Integration (BCIE)(USD 47 million). The GOCR will contribute USD 136 million towards these projects. -------------- COMMENT - BUILDING PRESSURE -------------- ¶6. (SBU) It is clear that a strong majority of the deputies feel a sense of urgency to start the long process of ratifying CAFTA-DR in Costa Rica. We believe that the number of deputies signing the letter (precisely two-thirds of the Assembly) is a measure of the level of support in the Costa Rican legislature and indicates that CAFTA-DR will be passed eventually. Press coverage of the U.S. Congress's approval of CAFTA-DR was intense and focused attention on the lack of progress in the ratification process in Costa Rica. The recent approval by the Senate of the Dominican Republic seems to have refocused attention on inertia here. The sending of the complementary agenda to the Assembly is a step in the right direction. However, the Administration is still lagging behind in sending the implementation agenda, i.e., the legislation necessary to comply with the terms of the agreement such as providing for the gradual opening of the telecommunications and insurance markets. Post doubts that this increased pressure will be sufficient to move the Administration to action before the Eminent Persons Group studying the agreement releases its report o/a September 16 (see septel). FRISBIE