DOMINICAN GOVERNMENT PUSHES HARD FOR CAFTA

UNCLAS SECTION 01 OF 02 SANTO DOMINGO 005213

SIPDIS

SENSITIVE

DEPT FOR WHA, WHA/CAR, INR, EB/TPP/BTA/EWH;
PASS USTR FOR R VARGO, A MALITO;
USCINCSO ALSO FOR POLAD; TREASURY FOR M WAFER

E.O. 12958: N/A
TAGS: ETRD PGOV PREL DR CAFTA
SUBJECT: DOMINICAN GOVERNMENT PUSHES HARD FOR CAFTA
IMPLEMENTATION



1. (U) Summary: Aiming for a January 1 implementation date
for CAFTA, the Dominican Republic is working quickly to meet
requirements. The Fernandez administration recently created
a task force made up of public and private sector trade
experts, many of whom have CAFTA negotiating experience, to
help ensure that the government stays on course with
preparations. USAID has hired contractors who are working
with members of the task force and other Dominican Government
officials to help prepare for implementation. End summary.


2. (U) Along with some of its Central American CAFTA
partners, the Dominican Republic has realized that it has a
lot yet to do in preparation for implementation of the trade
agreement. Since a proposed implementation date of January
1st was first put forward by USTR in the fall, the date has
been the target the Dominicans have been aiming for. As the
deadline draws near, the government shows a new awareness of
just how complicated are the preparations for the agreement.

IMPLEMENTATION TASK FORCE


3. (U) President Fernndez has authorized an "implementation
task force," a director and group of experts assigned to
confirm that all agencies are doing what they should for
implementation. Fernndez appointed as interim director
Guaracuyo Felix, head of the president's own budget office.
Wilma Arbaje, a private consultant with extensive government
experience, will take over the position when she returns this
week from a trip abroad. Meeting with USAID and Embassy,s
economic officer November 17, Felix said that creation of the
task force reflected the administration,s recognition that
there was "need for additional focus" to ensure that
implementation comes off without a hitch. He stressed that it
is still the Ministry of Industry and Commerce and not the
task force which holds ultimate responsibility for
implementation.


4. (SBU) Felix offered for the task force to meet with
Embassy officers weekly until implementation, so as to ensure
that the Embassy and USG are informed on status and aware of
potential problems. He said the government plans to have all
necessary pieces in place by mid-December, when the
government shuts down for the holidays, to ensure January 1
preparedness. (Secretary of Industry and Commerce Javier
Garcia was quoted in the press on December 1 as citing the
mid-December deadline.) Felix commented on widespread
expectation among CAFTA participants that the implementation
date could slip to March 1, which, he said, "would be more
practical and less stressful to all participants, including
the United States."
DOMINICAN CUSTOMS


5. (U) Customs Technical Subdirector Eduardo Rodriguez told
us soon afterwards that his agency is also working with a
January 1 implementation date, although he similarly
indicated that Customs believes CAFTA countries might decide
to delay implementation. Rodriguez was confident that the
Dominican Republic will be ready for January 1. He cited as
progress the expected congressional approval of the fiscal
reform package including regulatory changes necessary for
implementation. For instance, CAFTA-required elimination of
a consular fee charged for all goods imported to the country
is written into the fiscal reform package.

USAID CONSULTANTS


6. (U) USAID has hired two contractors with CAFTA negotiation
experience in Central America to work on IPR and Agricultural
issues. IPR expert Federico Valerio is concerned that
INFADOMI (an association of unscrupulous pharmaceutical
copiers) continues to try to influence the patent office
(ONAPI) into implementing procedures that favor patent
violators and run counter to CAFTA. So far, he said, ONAPI
has resisted the pressure and the country is moving in the
right direction on implementation. Another indication of
this, widely reported on November 30, was Senate President
Andres Bautista's firm and vocal refusal to further consider
INFADOMI-backed IPR-weakening legislation that the Embassy
had earlier pointed to Bautista as problematic for CAFTA.


7. (U) The USAID-hired agricultural policy expert, Vivian
Santa Maria, brought up a potential concern regarding the
Ministry of Agriculture,s approach to managing quotas,
particularly the most sensitive: rice quotas. The Ministry
of Agriculture has drafted new quota regulations which
compartmentalize quotas into three periods during the year,
meaning that an importer must time imports according to a
government-imposed schedule. Other CAFTA participants allow
flexibility to use quotas whenever desired throughout the
year. Santa Maria said that the Dominican approach is not
unreasonable--it is based on historical marketing data--but
added that it could potentially make importation more costly,
forcing importers to bring in smaller quantities, more often
than they would under a more traditional approach.
KUBISKE