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
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