FUTURE PUSC DEPUTIES STRESS IMPORTANCE OF "SOCIAL

1. (C) On May 29, Ambassador hosted all five deputies-elect
of the Social Christian Unity Party (PUSC) for breakfast.
They all expressed support for the Central America-Dominican
Republic Free Trade Agreement (CAFTA-DR) but were concerned
about opposition from labor trade unions, some agricultural
groups, students, and the Citizens' Action Party (PAC).
Deputy-elect Ana Helena Chacon said that confrontation during
the process of ratification was inevitable: "we just have to
make sure we don't lose." Faction leader Lorena Vasquez told
us, the PUSC strategy was to promote a "social agenda" that
will, in essence, buy off some of the opposition to the
agreement. End summary.

PUSC Puts on a Brave Face


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2. (C) The February 5 general elections were a disaster for
PUSC. The party won only five of the 57 seats in the
Legislative Assembly, down from the 19 seats in the last
election, and its presidential candidate got only 3.5 percent
of the vote. The party has been buffeted by corruption
scandals that for a while put its last two former presidents
(Rafael Angel Calderon and Miguel Angel Rodriguez) in jail
and by the notoriously ineffective presidential
administration of PUSC member Abel Pacheco.



3. (C) The five deputies-elect owe their positions to Rafael
Angel Calderon who has reemerged as party boss even while
fighting off corruption charges. Calderon determined the
party lists and selected candidates of proven loyalty to him.
Of the five elected deputies, four have served previously in
the Legislative Assembly, and the fifth, Ana Helena Chacon,
was until recently Vice Minister of Public Security. During
the breakfast, they reflected optimism that as a centrist
party they can hold the balance of power in the Assembly and
make a difference after they take office on May 1.

CAFTA-DR a Priority


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4. (C) Lorena Vasquez, who will be the PUSC faction leader
in the Assembly, noted the close relations between her party
and the U.S. Embassy over the years. She said that PUSC
fully recognized the importance of ratifying and implementing
a free trade agreement with Costa Rica's most important
trading partner, the United States. She regretted the
weakness of the Pacheco government whose lack of vision and
purpose delayed ratification and led to the exit from
government of the entire team of CAFTA-DR negotiators.



5. (C) Deputy-elect Bienvenido Venegas said that while
dialogue with civil society on CAFTA-DR and other issues was
important, the current Legislative Assembly went too far by
creating so-called mixed commissions in which elected
deputies sat together and negotiated with non-elected
representatives of labor unions and community organizations.
He said it was important to recognize the limits of dialogue
and that his party and the PAC, for example, were bound to be
on opposite sides of most issues.

Opposition to CAFTA-DR


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6. (C) Deputy-elect Jorge Eduardo Sanchez harked back to
2000 when street demonstrations ultimately defeated the
Rodriguez government's plan to partially privatize the Costa
Rican Electricity Institute (ICE). He said that many groups
with various grievances against the government came together
in defense of the state monopoly. The government was forced
to back down even though it had the support of the vast
majority of the legislature. Sanchez was concerned that that
could happen again in the battle to ratify CAFTA-DR.



7. (C) Deputy-elect Chacon said that a confrontation with
the labor unions over CAFTA-DR was inevitable; "we just have
to make sure we don't lose." She noted from her time in the
Ministry of Public Security deep suspicions that the
government of Venezuela was financing and fomenting
anti-government demonstrations and in particular was behind
efforts to defeat CAFTA-DR. She said what the GOCR lacked
was proof, and she urged that the USG provide more assistance
on intelligence matters.

Dividing the Opposition


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8. (C) Lorena Vasquez said it was important for the
government to engage civil society and opponents of CAFTA-DR.
She said that PUSC will support a "social agenda" (read
complementary agenda) that will lessen the harm suffered by
the "losers" in CAFTA-DR. She noted that some labor union
leaders and the PAC will never support CAFTA-DR, but it is

possible to effectively buy off some of their potential
allies.



9. (C) Deputies-elect Jose Luis Vasquez and Jorge Eduardo
Sanchez agreed with Lorena Vasquez, stressing that the
successful ratification and implementation of CAFTA-DR
depended on dividing the opposition and preventing the
formation of a massive anti-CAFTA-DR bloc. Sanchez added
that it was essential that the entire government speak with
one voice on CAFTA-DR. A major problem in the Pacheco
administration was that it appeared that only the Foreign
Trade Ministry supported the agreement with the rest of
government either ambivalent or silent.

Comment


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10. (C) PUSC appears to be on board to support CAFTA-DR but
not as enthusiastically as either the ruling National
Liberation Party (with 25 deputies) or Libertarian Movement
Party (with six deputies). PUSC deputies will defend their
concept of "social justice," which means that their support
for CAFTA-DR is to some extent conditioned on a satisfactory
complementary agenda. With PUSC, we count a total of 38
votes out of 57 in support of CAFTA-DR ratification. Due to
Costa Rica's painstaking parliamentary procedures and the
lack of progress until now, it could be many months before a
vote on CAFTA-DR takes place. An early test of how long the
ratification process will take will be whether the rules of
the Legislative Assembly can be modified to streamline its
deliberation process
LANGDALE