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

UNCLAS SECTION 01 OF 02 SAN JOSE 002942 
 
SIPDIS 
 
WHA/CEN 
EB FOR WCRAFT, BMANOGUE 
EB/CIP FOR WAYALA 
E FOR DEDWARDS 
WHA FOR WMIELE 
WHA/EPSC FOR KURS, LGUMBINER 
STATE PASS TO USTR FOR RVARGO, NMOORJANI, AMALITO 
 
E.O. 12958: N/A 
TAGS: ETRD ECPS ECON PREL PGOV SOCI CS
SUBJECT: CAFTA-DR RATIFICATION AND IMPLEMENTATION TIMELINE 
 
 
¶1.  (SBU) SUMMARY: The debate about the Central America- 
Dominican Republic-United States Free Trade Agreement 
(CAFTA-DR) started in the unicameral 57-member legislature 
(the Assembly) on December 6, 2005 after long delays in the 
Costa Rican administration's decision to send the agreement 
to the Assembly.  Since then, the twice-weekly sessions 
held by the responsible legislative Committee have been 
interrupted by logistical and political problems.  Despite 
extending its working sessions past the usual mid-December 
break for the holidays, the Assembly's International 
Relations and Trade Committee which is responsible for 
reviewing CAFTA-DR has made little progress and will not 
reconvene until after the February 5, 2006 presidential and 
legislative elections.  The key question is whether or not 
the lame-duck legislators on the International Relations 
and Trade Committee can complete their hearings and send 
the agreement to the floor for a first vote prior to the 
end their terms on May 1, 2006.  If not, the new 
legislature will have to review the work already done, thus 
further delaying the ratification process.  End Summary. 
 
----------------------------------------- 
CAFTA-DR RATIFICATION - A LONG ROW TO HOE 
----------------------------------------- 
 
¶2.  (SBU) Costa Rica is the only CAFTA-DR signatory country 
not to have ratified the treaty.  Fourteen months after 
signing CAFTA-DR and after much public debate over whether 
or not the agreement would benefit the poor, President 
Pacheco on October 21, 2005 finally sent the agreement to 
the Assembly to start the relatively long ratification 
process.  Delays in printing and distributing the more than 
3,000-page document pushed the official start date for 
Assembly discussions to December 6, 2005.  The Assembly's 
International Relations and Trade Committee then began to 
hold hearings, but as of December 22 the Committee had not 
even completed interviewing the first of 30 people who are 
scheduled to be summoned. 
 
¶3.  (SBU) Soon after the Committee's discussions began, 
their work was halted because of inadequate facilities in 
which the debate could be held.  The rooms normally used for 
such hearings were deemed to be too small and insecure to 
allow the public to safely observe the proceedings.  This 
resulted in several missed sessions and the inability of the 
Committee to progress in its work.  Supporters of CAFTA-DR 
alleged lack of support by Gerardo Gonzalez, the President 
of the Asembly and a member of President Pacheco's Social 
Christian Unity Party (PUSC).  Comment:  President Pacheco 
has washed his hands of the CAFTA-DR issue, refusing to 
lobby any legislators and repeatedly saying that CAFTA-DR is 
now in the hands of the Assembly.  This is not entirely true 
because his administration has yet to submit the all- 
important CAFTA-DR implementing legislation which would 
comply with the requirements to better protect intellectual 
property, and facilitate the phased opening of the 
telecommunications and insurance industries. End Comment. 
 
¶4.  (SBU)  The few hearings that have been conducted have 
been heated with anti-CAFTA-DR deputies on the Committee 
verbally attacking the Vice Minister of Foreign Trade, Doris 
Osterlof, and accusing the negotiators (not one of whom 
still works for the GOCR) of "betraying" the country and 
alleging a lack of transparency in the negotiation process. 
Comment:  Much of this is for show since six of the nine 
members of the Committee will vote in favor of CAFTA-DR. 
However three members of the committee are vice presidential 
candidates and one is a presidential candidate which means 
the hearings so far have been more about campaign slogans 
than debates about the merits of the agreement.  End 
Comment. 
 
¶5.  (U) Due to the legislative recess from December 23, 2005 
through the February 5 elections, a completion of the 
Committee's work is expected no sooner than the end April 
2006 just before the new deputies take office on May 1, 
¶2006.  (Note: The new Administration takes office on May 8, 
¶2006.  End Note.)  After the Committee has sent its 
recommendation to the plenary, two separate votes by the 
entire Assembly are required to pass the agreement, between 
which the Constitutional Court will review CAFTA-DR for any 
constitutional issues.  We think there is little likelihood 
that the second vote could occur during the first half of 
2006, but it is probable during the second half of 2006. 
The President would then sign the bill approving CAFTA-DR 
and publish it in the official gazette, two to four weeks 
after which CAFTA-DR would be considered officially 
ratified. 
 
---------------------------------- 
RATIFICATION IS NOT IMPLEMENTATION 
---------------------------------- 
 
¶6.  (SBU) Unlike the path taken by the USG and U.S. 
Congress, the Assembly will approve CAFTA-DR separately from 
the legislation that will actually implement the agreement. 
To date, the implementing legislation has not yet been sent 
to the Assembly and passing these bills could be more 
difficult than passing CAFTA-DR itself.  Of all the CAFTA-DR 
countries, Costa Rica clearly has the most work to do in 
drafting, debating, passing, and implementing this 
complementary legislation.  These bills should effect the 
phased opening of the telecommunications and insurance 
markets to competition - markets that are currently legally 
monopolized by the state-owned Costa Rican Institutes of 
Electricity (ICE) and Insurance (INS), respectively. 
(Comment:  The other CAFTA-DR countries also pass 
implementing legislation separate from the vote on the 
agreement itself.  We are now seeing how difficult the 
implementation issue is with several of these countries that 
have already ratified the agreement and are now trying 
fulfill their commitments before entry into force.  Costa 
Rica is not only the farthest behind on ratification, it is 
equally far behind in preparing the implementing 
legislation.  End Comment.) 
 
------- 
COMMENT 
------- 
 
¶7.  (SBU) The lack of progress in the International 
Relations and Trade Committee during the few short weeks of 
hearings, coupled with the Administration's reluctance to 
fully back CAFTA-DR, does not bode well for voting the 
agreement out of committee prior to the new Assembly members 
taking office on May 1, 2006.  If CAFTA-DR is not voted out 
of committee during the lame duck session, it means that the 
ratification process will take that much longer to complete, 
possibly extending the ratification well into the second 
half of 2006.  Even after approving CAFTA-DR, the real work 
of debating and passing the implementing legislation will 
remain and could well delay the implementation of the 
agreement beyond the end of 2006. 
FRISBIE