NICARAGUA CLOSE TO THE FINISH LINE ON CAFTA, SEEKS

UNCLAS SECTION 01 OF 02 MANAGUA 000513 SIPDIS SENSITIVE SIPDIS FOR WHA/CEN, WHA/EPSC, EB/TPP/BTA/EWH PASS USTDA FOR AL ANGULO AND KATE MALONEY USDOC FOR MARK SIEGELMAN, ALYSIA WILSON AND WALTER BASTIAN OPIC FOR JUAN CARLOS MONTES-RIVERA AND MARK STUCKART USTR FOR ANDREA MALITO E.O. 12958: N/A TAGS: ETRD BEXP PREL NU SUBJECT: NICARAGUA CLOSE TO THE FINISH LINE ON CAFTA, SEEKS HIGH LEVEL EVENT TO KICK-START INVESTMENT REF: A. MANAGUA 275 ¶B. MANAGUA 256 Sensitive but unclassified; handle accordingly. ¶1. (SBU) Summary: The GON is now reasonably confident that Nicaraguan politicians will finally permit a vote on CAFTA implementing legislation March 9, so that Nicaragua can join CAFTA by April 1. PLC (Liberal Party) sources in the National Assembly have also confirmed that a vote is on track. Minister of Trade Alejandro Arguello visited Ambassador March 6 to seek Embassy assistance in arranging a high-level event in Washington to acknowledge the event, explaining that the GON needs all the good news it can get in this election year. A trade mission would also be welcomed here. End summary. ¶2. (SBU) Alejandro Arguello, Minister of Industry, Development and Trade, called on the Ambassador March 6. accompanied by Cristian Martinez, director of regulations at MIFIC. Arguello said that the PLC had assured him that they would have the 40 members of their party bloc prepared to vote the required legislative changes under "emergency" procedures on Thursday, March 9. Eduardo Montealegre had also promised that his seven-member ALN-PC bloc would be there to vote yes. With a few more votes from the generally pro-GON Camino Cristiano and Azul y Blanco blocs, there should be a clear majority in the Assembly. The GON was still a bit concerned that the Sandinistas have not promised to refrain from interfering, and that several key FSLN deputies have talked about amending the draft legislation on anti-corruption penalties and IP protections, which could open a Pandora's box. However, MIFIC's extensive consultations with the PLC bloc had at last provided that group with all the information they claimed to need to hold a vote (Comment: in the past, the Assembly has used the need for more information as a stalling tactic. End comment). Martinez also indicated that Agriculture Minister Mario Salvo had the declaration of SPS equivalency on his desk for signature that day (ref a). Arguello had participated in successful outreach events with local rights holders to promote IPR legislation (ref b),and was coordinating with local business groups. ¶3. (SBU) The Ambassador offered to weigh in with PLC contacts to urge a prompt vote. Assembly board member Eduardo Mena (PLC) informed polcouns on the morning of March 7 that the PLC,s 40 deputies are prepared to vote for CAFTA-DR implementation legislation on March 9. Assembly Defense Committee Chair Delia Arellano (Camino Cristiano) called in the afternoon to confirm the PLC deputies are prepared to vote on the CAFTA-DR legislation. She explained that the instructions, as usual, had come from El Chile, former President Arnoldo Aleman's hacienda, where the PLC leadership meets every Monday to receive its marching orders. ¶4. (SBU) Once entry into CAFTA is assured, the GON wants to arrange for maximum exposure for launching this trade opportunity. Foreign Minister Caldera and Nicaraguan Ambassador to the U.S. Salvador Stadthagen have advised Arguello that the GON should seek a White House kickoff ceremony for President Bolanos, as was provided to Salvadoran President Saca in February. Arguello explained that it was important to attract some major investment to Nicaragua in the short term in order to have the promise of jobs in the run-up to November's presidential election. "We need to create some good news in the next eight months" he explained. Ambassador Trivelli cautioned that a White House event would be difficult to achieve, but agreed to convey the GON's request. ¶5. (SBU) In addition to garnering publicity for Nicaragua's CAFTA potential in the United States, a high-level trade mission, ideally to be led by Secretary of Commerce Gutierrez, would help the GON harvest the fruits of CAFTA and demonstrate the benefits of free trade and close association with the USG in the face of Sandinista appeal. A trade mission would benefit from deliverables associated with possible OPIC program announcements and USTDA's heralding of new projects in the key sectors of energy, telecommunications and infrastructure. MANAGUA 00000513 002 OF 002 ¶6. (SBU) Action request: Washington agencies are asked to consider providing some official recognition for Nicaragua's entry into CAFTA. If, as we anticipate, a White House event is not feasible, perhaps a ceremony with USTR Portman could be arranged. We also urge USDOC to consider including Nicaragua on the schedule for a high level trade mission at the earliest opportunity. Post stands ready to collaborate with Washington agencies on the organization of successful CAFTA kick-off events. TRIVELLI