CODEL BURTON ENGAGES GOCR ON CAFTA-DR AND U.S.

UNCLAS SAN JOSE 000132

SIPDIS

SIPDIS

WHA/CEN
EB FOR WCRAFT, BLAMPRON
E FOR DEDWARDS
WHA FOR WMIELE
WHA/EPSC FOR KURS, LGUMBINER
H FOR JHAGAN
STTE PASS TO USTR FOR RVARGO, NMORRJANI, AMALITO

E.O. 12958: N/A
TAGS: OREP ETRD EAGR PREL PGOV CS
SUBJECT: CODEL BURTON ENGAGES GOCR ON CAFTA-DR AND U.S.
MEAT AND POULTRY INSPECTION

REF: A. 05 SAN JOSE 423


B. 05 SAN JOSE 933

Summary
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1. In his third visit to Costa Rica in a year (see reftels
for previous visits),Representative Dan Burton (R-IN) met
with President Pacheco, several members of his cabinet, key
legislators, and Pacheco's probable successor as president,
Oscar Arias. As in previous visits, discussions focused on
the ratification and implementation of the U.S.-Central
American-Dominican Republic Free Trade Agreement (CAFTA-DR).
Costa Rican agriculture and foreign trade officials used the
visit to argue that CAFTA-DR did not explicitly require Costa
Rica to recognize the safety standards of the U.S. meat and
poultry inspection system and therefore such recognition
should not be a condition of the treaty's entry into force.
End Summary.


2. Representative Dan Burton (R-IN),Chairman of the House
Subcommittee on the Western Hemisphere, visited Costa Rica
January 10-12 together with an agricultural trade mission
from Indiana headed by Lieutenant Governor Becky Skillman.
They met with Agriculture Minister Rodolfo Coto and Acting
Foreign Trade Minister Doris Osterlof. See septels for
Burton's separate meetings with President Pacheco,
presidential candidate Oscar Arias, Minister of Public
Security Rogelio Ramos, and legislative leaders.

Minister of Agriculture
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3. Lt. Governor Skillman made the point that U.S. and Costa
Rican agricultural products were complementary, not in
competition. She said Indiana exported yellow corn and
soybeans vital to Costa Rica's poultry and dairy industries.
Coto agreed, noting that the United States was Costa Rica's
principal market for agricultural products, including
bananas, coffee, pineapples, melons, sugar, yucca, and
ornamental plants. He said that CAFTA-DR was important to
Costa Rica to ensure permanent access to the U.S. market.


4. Coto then cited a number of trade problems: (1) rice,
produced in both countries and a staple in Costa Rica, is
subsidized in the United States, creating problems for local
producers; (2) the opening of Costa Rica's telecommunications
and insurance sectors, required under CAFTA-DR, was "a
sensitive matter and needed to be managed carefully;" and (3)
the requirement that Costa Rica recognize the U.S. meat and
poultry inspection system and "automatically" approve U.S.
federally inspected meat and poultry products is not part of
CAFTA-DR and therefore should not be imposed on Costa Rica.
Coto said that if Costa Rica recognized the U.S. inspection
system, which is often referred to as "equivalency," it would
have to do the same for other CAFTA-DR countries.


5. Representative Burton noted that the U.S. inspection
system had the highest standards of quality and safety in the
world. The safety of the U.S. food supply, he believed, was
second to none. Burton promised nevertheless to communicate
Coto's concerns to his colleagues and to USTR in Washington.

Acting Minister of Foreign Trade
--------------

6. In a separate meeting, Osterlof said that although the
United States was already Costa Rica's biggest market, there
was room for expansion. She said that her ministry was in
the midst of reviewing its marketing strategy in the United
States and was considering opening two or three new offices
around the country apart from the office that already exists
in Miami. Osterlof repeated Coto's complaint that the United
States was "imposing requirements" on Central American
countries that were not part of CAFTA-DR. Opponents of the
treaty, she said, argue that Costa Rica should not give
concessions to the United States without getting anything in
return; they use such arguments to delay ratification and to
urge renegotiation of the treaty.


7. Representative Burton responded that renegotiation of
CAFTA-DR was out of the question, though some "fine-tuning"
of the treaty was possible after ratification. He said it
was important that Costa Rica not delay in ratifying and
implementing CAFTA-DR because it was unlikely that the

country would continue to receive Caribbean Basin Initiative
(CBI) benefits.

Press Coverage
--------------

8. CODEL Burton was widely covered in the press, including
an interview that covered more than half a page in the
January 13 edition of "La Nacion." In the interview, Burton
focused on the need to combat leftist influence in the
hemisphere with investment, economic growth, and jobs. In
another interview, which appeared in the business newspaper
"El Finaciero" on January 16, Burton cautioned that if Costa
Rica does not join CAFTA-DR within two years of the
entry-into-force date of treaty, it might have to stay out.

Comment
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9. Regarding equivalency, it was highly unusual that the
Ministries of Agriculture and Foreign Trade coordinated to
deliver a message to the United States. This was the first
time that Costa Rican officials denied that the GOCR had made
a commitment during the CAFTA-DR negotiations to undertake an
equivalency determination with respect to the U.S. meat and
poultry inspection system. In past contacts with AGATT,
working-level officials certainly stalled and came up with
various excuses for the lack of progress toward equivalency
(including the political difficulty of the task),but they
never disavowed the commitment.
LANGDALE