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05SANJOSE2131 2005-09-12 23:11:00 CONFIDENTIAL Embassy San Jose
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					  C O N F I D E N T I A L SECTION 01 OF 02 SAN JOSE 002131 


E.O. 12958: DECL: 09/12/2015


Classified By: Charge Russell Frisbie for reasons 1.4 (b) and (d)


1. (C) As the clock ticks down on a three-year "truce" on the
San Juan River dispute between Costa Rica and Nicaragua,
Foreign Minister Roberto Tovar on September 8 told Charge
that he will propose a new two-year stopgap agreement. He
said Costa Rica, however, will demand in the new agreement
some limited navigational rights on the river that it has not
been able to exercise under the current truce. President
Pacheco, responding off the cuff to a reporter's question on
August 30, said talks between the GOCR and GON had been
fruitless and that the GOCR was no longer willing to "kick
the ball down the road" (postpone dealing with the dispute).
If the GOCR and GON do not reach an agreement, Costa Rica
will file an application with the International Court of
Justice by October 23. End summary.

Dispute calendar


2. (U) According to the GOCR, the current version of the San
Juan River dispute began on July 15, 1998, when the
Nicaraguan Army started to impede the movement of armed Costa
Rican police on the river. This caused then-President of
Costa Rica Miguel Angel Rodriguez to cancel a scheduled visit
to Nicaragua. On March 8, 2000, Costa Rica and Nicaragua
agreed to OAS mediation of the dispute, but it was clear
after a month that there would be no accord. Anticipating
that Costa Rica would take the matter to the International
Court of Justice (ICJ), then-President of Nicaragua Arnoldo
Aleman filed a motion with the ICJ on October 23, 2001,
claiming that the court lacked jurisdiction over the dispute.
Costa Rica had one year to answer the motion or forfeit the
case. After months of negotiations, Costa Rican Foreign
Minister Roberto Tovar and Nicaraguan Foreign Minister Norman
Caldera on September 26, 2002, signed a three-year truce by
which the two sides agreed to delay discussion of the
Nicaraguan motion and that Costa Rica would not attempt to
bring the case to the ICJ.

Approaching deadline


3. (C) The current truce expires September 27, and, unless
the GOCR and GON arrive at a new agreement, the GOCR has
until October 23 to file an application with the ICJ
challenging the GON's motion filed four year before. Foreign
Minister Tovar told Charge September 8 that if Costa Rica
were to fail to respond to Nicaragua's motion in the ICJ,
Costa Rica would lose its rights. He said that the GOCR has
already drafted its ICJ application and will file it if the
GOCR and GON do not reach agreement by the October 23

President lets slip that negotiations have been fruitless



4. (C) President Pacheco, responding to a reporter's question
on August 30, let slip publicly what MFA advisers Sergio
Ugalde and Arnoldo Brenes have been telling us privately and
confidentially--that negotiations with GON have gone nowhere.

The GOCR's goal was to get the GON to agree to arbitration
of the San Juan River dispute by the ICJ or some other third
party (reftel). The GON, however, refused and instead
proposed an extension of the current truce, which is
unacceptable to Costa Rica. President Pacheco reflected
Costa Ricans' frustration when he told the press: "I thought
it would have been possible for two friendly countries to
reach an agreement with both yielding a little bit. But it
was not to be." He added: "We need to solve this matter once
and for all; we're not going to kick the ball down the road
(postpone dealing with the dispute) which serves the
interests of neither side."

Press commentary


5. (U) Since President Pacheco spoke out while negotiations
were ongoing, he was criticized in the Costa Rican press for
being "indiscreet" and "imprudent." Leading daily newspaper
"La Nacion," in a September 1 editorial, accused both sides
of carelessness in dealing with the San Juan issue:
"Nicaragua's leaders, politicians, and other sectors treat
(the dispute) according to their whims. And President
Pacheco, without warning, has violated the elementary norms
of maturity, prudence, and wisdom. Let's hope our Foreign
Ministry can get us back on track for the sake of our
national interest."

Tovar's two-year plan


6. (C) Having failed to persuade the GON to agree to
arbitration, the GOCR, Tovar told Charge, will now attempt to
negotiate a new two-year stopgap agreement. It is not merely
kicking the ball down the road because, unlike in the
existing truce, Costa Rica would insist on acknowledgment of
some limited navigational rights on the river (presumably to
include the transportation of armed Costa Rican police).
Tovar believes such an agreement would save face for both
sides and obviate threatened trade sanctions between the two
countries. He said that an interruption in trade or an
increase in tariffs would both be antithetical to CAFTA-DR
and cause bankruptcy for some small- and medium-sized



7. (C) Pacheco spoke out of turn but also truthfully. After
three years of fruitless negotiations on the San Juan
dispute, it is unrealistic to expect the next few weeks to be
different. The GOCR is willing to bend, but only so far. No
government, Costa Rican or Nicaraguan, can afford politically
to "give away" the San Juan River. For the Costa Ricans, the
dispute is more about saving face than any practical
considerations. In fact, Tovar has told us he doesn't even
care much whether an arbitrator rules for or against Costa
Rica, only that the matter is finalized. The great virtue he
sees in arbitration is that neither the GOCR nor the GON can
be accused of giving away territory or the rights of its
citizens; instead, the losing party can blame the arbitrator.