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