VZCZCXYZ0012
RR RUEHWEB

DE RUEHMU #0256/01 0332103
ZNR UUUUU ZZH
R 022103Z FEB 06
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC 5118
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
RUEHDG/AMEMBASSY SANTO DOMINGO 0493
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC

UNCLAS MANAGUA 000256 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT FOR WHA/CEN, WHA/EPSC, EB 
DEPARTMENT PASS TO COMMERCE, TREASURY, USTR, USAID 
 
E.O. 12958: N/A 
TAGS: ETRD NU
SUBJECT: CLOCK TICKING ON CAFTA IPR REFORMS IN NICARAGUA 
 
REF: MANAGUA 0026 
 
¶1.  (SBU) Summary: Minister of Trade Alejandro Arguello told 
Econoffs on February 1 that he expects a tough fight on the 
IPR portion of a legislative package that must be approved in 
the National Assembly before CAFTA-DR enters into force. 
Arguello indicated that the IPR reforms will likely motivate 
the Sandinista Party (FSLN) to orchestrate parliamentary 
delays and street protests.  He reported close cooperation 
with CAFTA Committee Chair Carlos Noguera on strategies to 
line up a 47 vote majority in favor of the required 
legislative reforms.  Noguera echoed that cooperation in a 
February 1 meeting with Econoffs, and suggested that the 
greatest impediment to March 1 entry into force was not FSLN 
opposition but a tight timeframe.  He recommended that the 
GON put all its political and technical muscle into 
convincing pro-CAFTA legislators to accept and support the 
introduction of the CAFTA package as an emergency measure, 
bypassing committee debate. The Trade Ministry and the 
Embassy have coordinated closely with local artists and 
businesses to create and launch a home grown defense of 
Nicaraguan culture through a anti-piracy campaign scheduled 
to be launched the week of February 6.  At the request of 
Minister Arguello, the Embassy will maintain a low profile on 
IPR issues throughout debate of the CAFTA reforms, so as not 
to encourage bad actors with worse intentions.  End Summary. 
 
¶2.  (SBU) The GON is preparing for a potentially tough fight 
to push required IPR legislative reforms through the National 
Assembly prior to February 16, so that Nicaragua can enter 
CAFTA-DR into force on March 1, 2006.  Minister of 
Development, Industry and Trade (MIFIC) Alejandro Arguello 
called Econoff on February 1 to request Embassy assistance in 
urging quick review and return of the IPR reforms.  (Note: 
The Minister's request came a short time before USTR informed 
the GON that they had reviewed the text and had no further 
comment, and invited the Nicaraguan CAFTA negotiators to 
Washington on February 6 to review the full CAFTA 
implementation package, including regulations.  The GON 
accepted the invitation.)  The 26 page IPR text calls for 
specific changes in Nicaragua's penal code, establishing a 
jail sentence of 1 to 2 years for unauthorized use of 
intellectual property, and a 2 to 3 year sentence for illegal 
use and reproduction of patented software and computer 
programs.  Industrial property rights are accorded the same 
protections.  Code reforms also include provisions for the 
confiscation and destruction of machinery used for illegal 
reproductions.  Currently, the penal code only permits the 
confiscation and destruction of pirated materials.  (Comment: 
Nicaraguan police took custody of 13,000 CDs and DVDs during 
a January 2006 raid, and the three pirates reportedly 
protested violations of their human rights at an empty 
National Assembly within hours of the raid.) 
 
¶3. (SBU) Arguello expressed concern about possible street 
protests and parliamentary delays against IPR reforms, all 
orchestrated by the Sandinista Party (FSLN).  His concern 
about the political (and illegal commercial) sensitivities 
associated with IPR protections is such that he asked Post to 
cancel the involvement of USPTO and industry representatives 
in a MIFIC/INCAE CAFTA program scheduled for February 6 and 
¶7.  He asked for a low profile on IPR from the Embassy.  In a 
separate conversation, Sandinista Party dissident Herty 
Lewites reinforced the struggle ahead, telling Ambassador 
Trivelli on February 1 that aside from his personal support 
for CAFTA-DR, he expects that the IPR reforms will be a 
tougher sell in the National Assembly than was CAFTA 
ratification itself. 
 
¶4. (SBU) On a positive note, Arguello expressed satisfaction 
over a January 31 commitment from CAFTA 
Committee Chair Carlos Noguera to enlist the votes of 41 
Liberal Constitutional Party (PLC) members.  He added that 
he expects to repeat the GON strategy from September and 
October 2005, arriving at a 47 vote majority by adding to 
the PLC foundation votes from minority parties, including the 
Pro-Bolanos Azul y Blanco (Blue and White) bloc, the 
Camino Cristiano (Christian Way) bloc and the 
Pro-Montealegre National Liberal Alliance - Conservative 
Party (ALN-PC). 
 
¶5. (SBU) A healthy degree of cooperation on IPR reforms 
between National Assembly CAFTA Committee Chair Carlos 
Noguera and MIFIC was evident during Noguera's February 1 
meeting with Econoffs.  Noguera opined that the greatest 
enemy to the reforms is time.  The Assembly is fully 
occupied this week with organizing the structure of 
committees, and Assembly leadership will not meet to set the 
agenda for plenary debate until next week.  He added 
that Assembly's normal procedure is to schedule committee 
hearings and plenary sessions on alternating weeks, with 
most business taking place Tuesday through Thursday. 
He did not hold out much hope for the passage of the 
legislative package prior to February 16 if the normal 
legislative route is taken, pointing to the complications 
of committee debate and the likely need to send penal code 
reforms on anti-corruption through the Justice Committee. 
Noguera reiterated his January 31 recommendation to 
Minister Arguello that President Bolanos enlist the 
political leadership of the Assembly to accept the CAFTA 
reform package as an emergency measure, which would allow 
the reforms to bypass committee review and go directly to 
the plenary.  He suggested that such a legislative strategy 
would have to be prepped with a forceful political pitch 
backed by technical arguments to CAFTA allies within the 
PLC, Azul y Blanco, Camino Cristiano and ALN-PC.  Noguera 
emphasized that Arguello himself and his best technical 
experts will need to be involved in the effort to expedite 
passage of the CAFTA reforms. 
 
¶6. (SBU) Noguera discounted resistance from economic 
interests as a major impediment to the IPR legislation, 
claiming that it would be difficult for even the FSLN to 
publicly support pirated sales.  He recommended that the 
GON include in the legislative strategy involvement of 
Nicaraguan artists whose interests have been harmed by 
pirates. (Note: During the discussion, Noguera was holding 
a draft copy of the IPR and anti-corruption changes that 
Arguello had shared with him on January 31.  While he 
displayed a good general command of the issues, Noguera 
acknowledged that he had not yet read the text.)  Econoffs 
reiterated the importance of passing the legislative 
package without modifications. 
 
¶7. (SBU) Comment: Avoiding the antibodies that will attack 
should the IPR legislation be perceived as a purely US 
interest, Post will continue to work behind the scenes, 
pushing for expeditious legislative approval of the CAFTA 
reforms.  Post is quietly facilitating an ongoing publicity 
campaign in support of intellectual property rights. 
Participants include Nicaraguan artists, video and music 
production companies, concert production companies and 
local cinemas.  Through close collaboration with MIFIC and 
the Embassy, the ad hoc group decided to organize local 
Nicaraguan musicians to demonstrate the negative impact of 
piracy on Nicaraguan culture and arts.  The Nicaraguan 
Copyright and Patent Society (NICAUTOR) accepted a leadership 
role in producing a compact disc of songs by the 
most popular Nicaraguan artists, interspersed with messages 
to oppose pirating and support the new IPR law.  Pro-IPR 
artwork is featured on the label.  The production has been 
funded, in part, by a $2,000 USAID grant.  CDs will be 
distributed to National Assembly deputies, media and 
university students.  The CDs will be complemented with a 
music video to be featured on cable TV and in local movie 
theaters.  The campaign will be launched the week of 
February 6 with a press conference featuring famous 
Nicaraguan musicians.  Given the sensitivities involved, Post 
is not advertising its role in the campaign.  End Comment. 
TRIVELLI