This record is a partial extract of the original cable. The full text of the original cable is not available.

C O N F I D E N T I A L SECTION 01 OF 02 SAN JOSE 002930 
 
SIPDIS 
 
E.O. 12958: DECL: 12/27/2015 
TAGS: PGOV PINR PREL ECON CS
SUBJECT: PRESIDENTIAL CANDIDATE OTTON SOLIS RUNNING AGAINST 
CAFTA-DR 
 
 
Classified By: Charge Russell Frisbie for reasons 1.4(b) and (d) 
 
Summary 
-------- 
¶1. (C) Presidential candidate Otton Solis told Ambassador 
that CAFTA-DR "would place Costa Rica in the hands of the 
multinationals."  He said the treaty was one-sided, opening 
the Costa Rican market to U.S. industrial power, against 
which Costa Rica cannot hope to compete, and in return 
providing for Costa Rican exporters only "tiny things" in 
addition to what they already have under the Caribbean Basin 
Initiative (CBI).  Ambassador said that in his view no 
country will benefit more from CAFTA-DR than will Costa Rica. 
 Ambassador said that CAFTA-DR was intended to replace CBI, 
so Costa Rica should not count on CBI benefits in the future, 
nor is it realistic to hope, as Solis has urged, that 
CAFTA-DR can be renegotiated.  End summary. 
 
 
Election Campaign 
----------------- 
¶2. (SBU) On December 13, Ambassador paid a courtesy call on 
Otton Solis, who is running behind Oscar Arias for president 
in the February 5 election.  Solis founded the Citizens' 
Action Party (PAC) in 2000 and ran as PAC's candidate for 
president in 2002, coming in third place with a respectable 
26 percent of the vote.  While he is now in second place, the 
polls indicate he will probably receive fewer votes than last 
time.  His platform calls for greater transparency, 
decentralization, and citizen involvement in government. 
More concretely, he wants to preserve existing state 
monopolies, including in telecommunications and energy, and 
he is against CAFTA-DR.  The meeting took place in Solis's 
home.  Also present were his campaign chief Alberto Salom, 
his candidate for second vice president Marita Gonzalez, and 
retired diplomat and PAC supporter Alvar Antillon. 
Ambassador was accompanied by Polcouns. 
 
¶3. (SBU) Solis said his campaign focuses on direct "citizen 
encounters" in town-hall-type meetings with an open-ended 
agenda.  He does not give speeches, he said, but sits on a 
stool and discusses issues raised by voters.  Solis said that 
voters most often bring up Nicaraguan immigration (most 
advocating that immigrants be kicked out), security, drugs, 
CAFTA-DR, and fiscal reform.  Solis said that with regard to 
Nicaraguans, "My duty is to calm people down."  He argued: 
(1) Nicaraguan immigration cannot be stopped, (2) Costa Rica 
benefits from Nicaraguan labor, (3) Costa Ricans 
hypocritically hire Nicaraguans and complain about them at 
the same time, (4) The "racist notion" that Nicaraguans are 
more prone to crime than Costa Ricans is demonstrably untrue; 
in fact, the opposite is true, and (5) While Nicaraguans 
remit USD 120 million from Costa Rica to Nicaragua, Costa 
Ricans remit USD 300 million from the United States to Costa 
Rica.  Costa Rica is therefore a net winner in remittances. 
Solis did acknowledge, however, problems arising from the 
fact that many employers do not pay payroll taxes due on 
Nicaraguan employees.  This gives Nicaraguans a competitive 
wage advantage and means that they do not contribute to the 
costs of public education, health care, and other government 
services that they nevertheless use. 
 
 
Economy "not working" 
--------------------- 
¶4. (SBU) Solis said Costa Rica's model of development is 
failing.  The economy is plagued by increasing unemployment, 
poverty, and income concentration, slow growth, an 
unfavorable trade balance, fiscal problems, and corruption. 
He said: "Costa Rica suffers from a mix of contradictory 
policies - - market-oriented policies for small businesses, 
and subsidies and tax exemptions for multinationals and other 
large enterprises."  Farmers, he complained, are not 
protected from imports. 
 
¶5. (SBU) CAFTA-DR, Solis believes, will make matters worse 
and in effect "would place Costa Rica in the hands of the 
multinationals."  He sees the treaty as one-sided, opening 
Costa Rica's market to U.S. industrial power, against which 
Costa Rica cannot hope to compete, and in return providing 
for Costa Rica only "tiny things," e.g., slightly more access 
for textile products and sugar, in addition to what the 
country already enjoys under the Caribbean Basin Initiative 
(CBI).  Solis said: "Our negotiators did not negotiate; they 
merely accepted everything the U.S. wanted."  He said 
CAFTA-DR will have to be renegotiated. 
 
¶6. (SBU) Ambassador responded that all the CAFTA-DR countries 
will benefit from the treaty, but none more than Costa Rica. 
He said that Costa Rica has already proved it can compete, 
and CAFTA-DR will open up many new opportunities.  It was 
unwise, he said, to count on CBI benefits in the future 
because CAFTA-DR was intended to replace CBI.  He said that 
passage of CAFTA-DR in the U.S. Congress was a very difficult 
process leaving "blood on the floor."  Ambassador said it was 
unrealistic to hope that the U.S. would consider any 
renegotiation. 
 
¶7. (SBU) With respect to ending CBI benefits, Solis said that 
he refused to believe that the United States was "an evil 
country that would punish us" for not approving CAFTA-DR.  He 
said it was impossible to imagine such a thing because Costa 
Rica is a democratic, peaceful country that cares for its 
environment and has always been a friend to the United 
States.  Costa Rica, he said, cannot be treated like 
Guatemala or Nicaragua.  There would be tremendous tension in 
Costa Rica if the U.S. tried to hurt the country.  Ambassador 
stressed that there was no intention to hurt Costa Rica, but 
to bring Costa Rica and the U.S. closer together through a 
mutually binding and mutually beneficial trade agreement 
supported by majorities in both countries. 
Oscar Arias 
----------- 
¶8. (C) Solis warned that the election of Oscar Arias as 
president would be disastrous for the United States.  First, 
he said, Arias hates the United States.  Solis said that over 
the years Arias has learned that defying the U.S. wins 
applause at the UN.  So Arias condemned the Reagan 
Administration's bombing of Libya.  If reelected, Solis said, 
Arias plans to move the Costa Rican Embassy in Israel from 
Jerusalem to Tel Aviv, and he will continue to make anti-U.S. 
speeches at universities in exchange for honorary Ph.D. 
degrees.  Second, according to Solis, the Arias campaign is 
"probably" financed by narcotraffickers.  Solis claimed that 
six narcotraffickers were involved in Arias's 1986 campaign 
and that Arias is therefore careful not to condemn drug 
trafficking.  Third, Solis said, Arias is anti-democratic. 
Arias refuses to engage in dialogue with farmers, labor 
organizations, or students.  Further, Solis said, Arias has 
debated the other candidates only twice and refuses a 
one-on-one debate with Solis, who is second in the polls. 
Solis said that he, contrary to Arias, loves and admires the 
United States (two of his brothers studied there), is the 
worst enemy of drug trafficking and corruption, and believes 
in dialogue and consensus, and thus is a true democrat. 
 
 
Biographic Information 
----------------------- 
¶9. (U) Solis told Ambassador that he had not been involved in 
politics until 1986 when he was age 31 and Arias asked him to 
be his Minister of Planning.  Solis said he resigned after 29 
months because of his disgust with the Arias Administration. 
Solis was a National Liberation Party (PLN) member of the 
Legislative Assembly from 1994 to 1998 and planned to retire 
from politics at the end of his term.  But then he decided to 
found PAC in 2000 and has been working for the party full 
time ever since. 
 
 
Comment 
------- 
¶10. (C) It is interesting that Solis has never said in public 
what he told us in private about Arias.  While there are 
small elements of truth in some of Solis's comments about 
Arias, we do not believe that Arias hates the U.S., is in the 
hands of narcotraffickers, or is anti-democratic.  The fact 
that Solis does not make such allegations against Arias in 
public probably indicates that Solis does not believe them 
either and does not want to look ridiculous or be sued for 
slander. 
 
¶11. (C) Solis has staked out his position on CAFTA-DR and 
will not move.  He does not want to appear anti-U.S. or 
anti-free trade, so he says that he wants a free trade 
agreement with the Unites States, but a different one.  He 
also stresses that Costa Rica needs to negotiate agreements 
with the European Union, Japan, and Mercosur. 
 
¶12. (C) Solis and his party's campaign appears to be 
foundering, but, because the ruling Social Christian Unity 
Party (PUSC) has collapsed, PAC will likely end up as the 
second force in the Legislative Assembly with Solis as the 
party boss.  Solis is therefore a power to be reckoned with 
and can be expected to oppose a future President Arias's 
free-market-oriented reforms at every turn. 
LANGDALE