COSTA RICA: BACHELET VISIT DEMONSTRATED CLOSE,

C O N F I D E N T I A L SAN JOSE 000970 SIPDIS DEPARTMENT FOR WHA/CEN AND WHA/BSC; TREASURY FOR OTA E.O. 12958: DECL: 12/11/2018 TAGS: PREL PGOV PARM ECON ETRD APECO CI CS SUBJECT: COSTA RICA: BACHELET VISIT DEMONSTRATED CLOSE, LIKE-MINDED BILATERAL RELATIONSHIP Classified By: DCM Peter M. Brennan for reason 1.4(d). ¶1. (C) SUMMARY: Chilean President Michelle Bachelet's first-ever state visit to Costa Rica October 28-29 produced one new accord and a joint presidential declaration that clearly manifested a close bilateral relationship based on shared political, social and economic values. The GOCR accepted Chile's offer to advise and train negotiators in anticipation of Costa Rica's upcoming FTA negotiations with China (septel). Beyond the official documents, Arias' public and press statements demonstrated his almost fervent, devoted admiration of the "female Chilean champion of free markets, human rights and social development," and of the Chilean model for Latin America. Bachelet's stop, en route to the Ibero-American Summit in El Salvador, reciprocated Arias' visit to Santiago in October 2006, one of his first during his administration. The visit showed Arias' and Bachelet's vision and support for hemispheric economic development through free-market economies with strong social institutions, in contrast to the Bolivarian "alternatives" in the region. END SUMMARY. ¶2. (C) The MFA's Foreign Policy Director Christian Guillermet told us earlier this year that the GOCR had learned from CAFTA-DR and EU trade negotiations and was planning to incorporate more "political" aspects into the Chilean and future FTAs. According to his deputy, Alejandro Solano, the Association Accord ("Acuerdo de Asociacion") signed with Chile on October 28 did just that, by committing to build upon the relationship that the two countries had enjoyed since the Chilean-Costa Rican FTA took effect in 2002. ¶3. (SBU) The Costa Rica-Chile Accord establishes an "Association Council," (a binational commission) which will meet biennially. (The first meeting actually took place before Bachelet's visit, at the senior working level, to sketch out the 20 cooperative projects on the two countries' agenda.) The Accord also pledges to increase political dialogue, mutual assistance and educational/cultural exchanges, social development, and commercial cooperation. The presidential declaration highlighted those themes and others, including mutual support of an international arms trade treaty (ATT, an Arias Administration priority),Chile's �A;Observer status in SICA, the two countries' commitment to UNSC reform, Chile's support of Costa Rican APEC membership (another Arias priority),and environmental cooperation. The full text of the accords is available in the "News" section of the MFA's website, www.rree.go.cr. ¶4. (SBU) Though not part of the formal accords, Chile offered to help Costa Rica with its upcoming FTA negotiations with the Chinese. The MFA's Solano told us that Chile would provide technical assistance, such as training and advice, as Chile has done during the GOCR's negotiations with the EU. ¶5. (U) Domestically, Arias used Bachelet's visit and Chile's success with more than 50 FTAs to promote passage of the remaining CAFTA-DR implementation bill in the National Assembly, which was finally approved on November 11 and enacted into law on November 26. Citing the Chilean example, Arias described FTAs as major tools to promote development. For her part, Bachelet publicly urged Costa Rica to construct an "array" of FTAs that benefit various economic sectors. Thus far, however, the Chilean-Costa Rican FTA has run in Chile's favor, according to Solano. In 2007, for example, Costa Rica imported USD 184 million in goods from Chile and exported USD 26 million. Costa Rican exports are on the rise, though; 2007 exports to Chile showed an increase of 78 percent over 2006. ¶6. (U) Arias and Bachelet also spoke at the opening of a new wing (funded by Norway) of the Inter-American Court of Human Rights. In his remarks, Arias called Bachelet the "epitome of those who raise their voices against oppression and human rights violations" and the "dream woman" for which Costa Rica had "shouted and cried" in Chile's name when Chile was muted by dictatorship. In an October 31 op-ed, Arias referred to Bachelet as the leader of the "most advanced nation in Latin America," and called on Chile and Costa Rica to continue working for "development, peace, democracy and liberty." Arias also hinted that Costa Rica, like Chile, should elect a female president, a veiled reference to one of his party's 2010 presidential candidates, Laura Chinchilla, who stepped down from her dual posts of Vice President and Minister of Justice in October to begin her campaign. ¶7. (C) COMMENT: In contrast to the Bolivarian world view, Arias and Bachelet's visit pointed to the "other" Latin America that shares a vision of progressive and forward-looking growth founded in free trade and democratic ideals. His hyperbole aside, Arias' and Costa Rica's admiration for Chile could yield tangible, positive benefits if both countries follow through on the commitments in their latest accord. This is a partnership that could be good for the region and U.S. objectives as well as for both countries. One idea we are considering, working with Treasury's OTA team here, would be to tap the U.S.-Chile Infrastructure Finance Experts Corps (IFEC) to offer the GOCR technical advice to improve and streamline the concessions process. This is crucial for Costa Rica to attract the private investment needed to help modernize its ailing national infrastructure. CIANCHETTE