DOMINICAN COMMERCE MINISTER EXPOSTULATES ABOUT

C O N F I D E N T I A L SANTO DOMINGO 000301

SIPDIS

SIPDIS

DEPT FOR WHA, WHA/CAR, WHA/EPSC; DEPT PASS TO USTR (MALITO);
WHITE HOUSE PASS TO USTR (MALITO)

E.O. 12958: DECL: 02/07/2017
TAGS: BEXP ELAB ENRG ETRD DR
SUBJECT: DOMINICAN COMMERCE MINISTER EXPOSTULATES ABOUT
CAFTA-DR AND HYDROCARBONS RESOLUTIONS

REF: A. 07 SANTO DOMINGO 0164

B. 07 SANTO DOMINGO 0215

Classified By: Classified by Economic-Political
Counselor Michael Meigs for reasons 1.5 (b) and (d)


1. (C) Summary. On February 6 Dominican Minister of
Industry and Commerce Francisco Javier Garcia delivered to
the Ambassador and EMBASSY officers a lengthy diatribe
asserting that the USG is imagining contradictions between
CAFTA-DR and Hydrocarbons resolutions 148 and 23 clamping
down on contracts for fuel transportation. The Ambassador
read sections of the text aloud, insisting to Garcia that the
resolutions interfere with private contracts. After much
discourse, Garcia returned to a familiar demand: "USTR just
needs to tell us exactly what to do. They provide the
language and we'll make the changes." Concerning the
commercial issue of Chevron and fuel transport contracts,
Garcia told the Ambassador, "My priorities are the agreement
and these resolutions; I will meet with Chevron after these
issues are resolved." End summary.


2. (C) On February 6, Dominican Minister of Industry and
Commerce Francisco Javier Garcia accepted the Ambassador's
invitation to the Residence to discuss the impasse over entry
into force for the Dominican Republic of the DR-CAFTA
regional agreement. Also attending were the Deputy Chief of
Mission, the Commercial Counselor, the econ chief and an
economic officer. The Ambassador opened by telling Garcia,
"You hold the keys to entry into force." The Minister replied
with a lengthy discourse, asserting that he, other Dominican
officials and the Dominican private sector think that USTR
and the USG do not want a free trade agreement with the
Dominican Republic at all. Garcia recited a chronology of
all the CAFTA-DR consultations and asserted that at each
stage the Dominican Republic had "endured delay after delay."
Garcia asserted that he fully expects there to be another
issue that will delay entry into force even after the
question of the resolutions is resolved.


3. (C) He would not stop expostulating. After showing
remarkable patience for nearly half an hour, the Ambassador
interrupted the Minister to insist that the United States
wants CAFTA-DR to enter into force for the Dominican Republic
as soon as possible. The Ambassador brought the discussion
back to the specifics of Ministry resolutions 148 and 23,
which effectively preclude petroleum companies in the
Dominican Republic from terminating contracts with Dominican
trucking firms. Even in the face of the Ambassador's textual
citation of relevant articles, Garcia denied that the
resolutions included penalties, inserted the Ministry in the
private contracts with transporters, prohibited
cancellations, dictated the form of contracts or modification
of transport fleets without justification, or gave the
Ministry any role other than that of arbiter. It was as if he
were denying that the written texts had any relation to
reality.


4. (C) As the Ambassador repeatedly pointed out Garcia's
inconsistencies, the Minister switched from one topic to
another, in a verbal stream of consciousness. The defense
of the resolutions that emerged was a virtually incoherent
combination of the fear of a strike, a determination to
maintain public order, a desire to protect the trucking
companies' investments, and a conviction that he has the
authority to regulate public services as he wishes. Garcia
asserted that there would have been no problem if Chevron not
complained to the U.S. government - - a view that the
Ambassador decisively countered. Garcia remained adamant
against rescinding the resolutions: "I would resign before I
would rescind those resolutions."


5. (C) Garcia conceded that the Ministry might modifying the
resolutions in some fashion so as to ensure consistency with
CAFTA-DR. He asked for USTR to provide explicit language for
modification or to draft new resolutions themselves.


6. (C) Garcia has postponed the meeting with Chevron
previously set for February 9. He told the Ambassador that he
would meet with Chevron "after the resolutions are modified
and after the CAFTA-DR agreement enters into force." (Prior
to the postponement, Chevron had mentioned to econoff that
they planned to offer Garcia a deal that postponed the
cancellation of the contracts for up to 18 months and that
provided jobs to those drivers who worked for the companies

that lost the contract.)

Comment
- - - -


7. (C) Garcia at least paid lip service to the importance
of the entry into force of CAFTA-DR and to the notion of
modifying the resolutions. Even so, it was disheartening to
see the disconnect between his interpretation of the
resolutions and the literal texts. At least Garcia informed
the Ambassador that although he is the campaign manager for
President Fernandez' re-election campaign, CAFTA-DR is his
"number one priority."


8. (U) This report and extensive other material can be
consulted on our SIPRNET site,
http://www.state.sgov.gov/p/wha/santodomingo/
HERTELL