PRESIDENT MEETS WITH COMMISSION OF EMINENT PERSONS

UNCLAS SECTION 01 OF 02 SAN JOSE 002047

SIPDIS

WHA/CEN
EB FOR WCRAFT, BMANOGUE
E FOR DEDWARDS
WHA FOR WMIELE
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STATE PASS TO USTR FOR RVARGO, AMALITO

E.O. 12958: N/A
TAGS: ETRD ECPS ECON PREL PGOV SOCI CS
SUBJECT: PRESIDENT MEETS WITH COMMISSION OF EMINENT PERSONS

REF: SAN JOSE 01819


1. (SBU) Summary. On August 29, 2005, President Pacheco
met with four of the five members of the Commission of
Eminent Persons regarding their progress on reviewing the
text of the U.S.-Central American-Dominican Republic Free
Trade Agreement (CAFTA-DR). Franklin Chang, head of the
Commission, stated that the Commission has decided to
expand the topics on which it will focus, but still plans
to submit its report to the President by September 16,

2005. Although the Commission has not studied the
complementary agenda and implementation legislation for
CAFTA-DR due to their incomplete status, Chang stated that
the role these projects will play will be very important
and will need to be implemented carefully and
appropriately. Whatever the Commission's recommendation,
the ultimate decision will be left to President Pacheco as
to whether or not to send CAFTA-DR to the Assembly before
he leaves office. End Summary


2. (U) According to Chang, the Commission has met with at
least 30 people to consult with and hear their views about
CAFTA-DR. We note that with the exception of Anabel
Gonzalez, the ex-lead Costa Rican negotiator of the
agreement, and the "Chamber of Chambers" (the Union of
Costa Rican Chambers and Private Sector Associations--
UCCAEP, http://www.uccaep.or.cr),the Commission has met
exclusively with CAFTA-DR opponents. These include Albino
Vargas, President of the approximately 15,000-member
National Association of Private and Public Employees (ANEP)
who is vehemently against CAFTA-DR, and Otton Solis, the
presidential candidate of the left-leaning Citizens' Action
Party (PAC),whose official position is to pursue
renegotiation of the agreement. Chang also stated that the
Commission has received hundreds of e-mails each day from
citizens about CAFTA-DR.


3. (U) In addition to the thirteen topics on which the
Commission previously stated they would focus (Reftel),
Chang said the Commission will look at (1) the possibility
of sending CAFTA-DR to a national referendum, (2) the
option of renegotiating the agreement, (3) the option of
withdrawing from the agreement once it is already entered
into force, and (4) the status of approvals in the other
CAFTA-DR signatory countries.


4. (U) In the August 30, 2005 edition of "La Republica,"
Chang referred to the need to learn more about the
complementary and implementation agendas. "The Commission
of Eminent Persons is studying the topic of the agendas
because they are not completely clear to us. They are
still being defined. These projects should be used to
better prepare the country and, therefore, it is necessary
to study them with care," said Chang. Chang specifically
referred to the need to improve the global competitiveness
of Costa Rican companies, to upgrade roads, highways, and
ports, and to streamline the country's customs-clearing
capabilities.

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AFTER THE COMMISSION DELIVERS ITS REPORT
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5. (U) After the Commission delivers its report to the
President on September 16, 2005, the Commission will
present its findings to the various Ministers of the
Cabinet. This could occur as early as September 20.


6. (U) On August 29, 2005, the Administration submitted to
the Assembly general information, including the funding
sources, on the complementary agenda. The implementing
legislation that should ensure compliance with CAFTA-DR
requirements in the telecommunications and insurance
industries has not yet been officially submitted to the
Assembly, and the status of these projects is unclear to
Post. The GOCR reportedly plans to submit the insurance-
related legislation imminently, and the telecommunications-
related legislation in November 2005.

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COMMENT
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7. (SBU) Two pro-CAFTA-DR participants in the Commission
interviews held last week told us they believe the
Commission is trending toward a pronouncement along the
lines of: "The agreement is basically positive and can be
`fixed' if we do x, y, and z." They could for instance say
that there should be some trade adjustment assistance in
the complementary agenda, which now focuses entirely on
competitiveness issues.


8. (SBU) In the end, the ball will be back where it has
always been, with the President. Still unknown is how
President Pacheco will incorporate the Commission's report
into his decision-making process. How he chooses to `spin'
the report will be telling and perhaps decisive regarding
his intentions to send CAFTA-DR to the Assembly during his
Administration. He will undoubtedly use the Commission's
report to justify whatever course of action he ultimately
decides to take.
FRISBIE