VZCZCXYZ0000
RR RUEHWEB

DE RUEHSJ #0256/01 0901300
ZNR UUUUU ZZH
R 311300Z MAR 09
FM AMEMBASSY SAN JOSE
TO RUEHC/SECSTATE WASHDC 0696
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
RUEHBS/USEU BRUSSELS

UNCLAS SAN JOSE 000256 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR WHA/CEN; WHA/PPC; WHA/EPSC; EEB/TPP; EUR and H 
PLEASE PASS TO USTR FOR DOLIVER AND AMALITO 
 
E.O. 12958: N/A 
TAGS: ETRD ECON PGOV PREL CS EUN
SUBJECT:  EU/CENTAM FTA MARKETED AS A "COOPERATION" ACCORD, BUT 
DOUBTS PERSIST IN COSTA RICA 
 
¶1. (SBU) SUMMARY.  On March 2, the Costa Rican Ministries of Foreign 
Affairs (MFA) and Foreign Commerce (COMEX) hosted a seminar on the 
Agreement of Association between Central America and the European 
Union (Spanish acronym, AACUE).  Cabinet ministers and other 
speakers touted the AACUE as a welcome departure from "other trade 
agreements" negotiated in the region (read: CAFTA-DR).  Speakers 
emphasized the AACUE's focus on "cooperation" and "political 
dialogue" and lauded EU aid commitments embedded in the agreement. 
Privately, however, some GOCR contacts seem less impressed.  The 
Costa Rican Ambassador to the EU opined that the AACUE's focus on 
"dialogue" and "feedback" is just "marketing."  Other contacts 
question whether the EU will come through on the 34 million Euros in 
aid earmarked for Costa Rica, and worry about strings that may be 
attached.  END SUMMARY. 
 
-------------------------------- 
GOOD VIBRATIONS AND HIGH PRAISES 
-------------------------------- 
 
¶2. (U) COMEX Minister Marco Vinicio Ruiz opened the conference with 
a theme that would be repeated by each speaker:  The AACUE is more 
than a trade agreement; its goal is the overall well-being of the 
Central American region.  He noted that the AACUE's three pillars - 
commerce, cooperation, and political dialogue  - set it apart from 
other trade agreements to which Costa Rica has recently been a party 
(a clear, if unstated, reference to CAFTA-DR). 
 
¶3. (U) Minister of Planning Roberto Gallardo went further in 
contrasting the AACUE and CAFTA.  Unlike "other trade agreements," 
Gallardo noted, "the AACUE expressly focuses on cooperation and 
dialogue."  Gallardo stated that this approach makes sense given 
Costa Rica's and Europe's social and political affinities.  He 
reminded the audience that, while the "superpowers were using the 
nations of Central America as pawns," the EU supported the Central 
American peace plan proposed by Costa Rican President Oscar Arias. 
Because of this, Gallardo said, "no one is protesting in the 
streets" over the AACUE.  Gallardo welcomed the AACUE as a chance 
for "the EU to return to political influence in the region." 
 
¶4. (U) In a similar vein, Roberto Echandi, Costa Rican Ambassador to 
the EU and lead AACUE negotiator, emphasized that the AACUE will 
allow broader sections of society to have a voice.  In addition to 
traditional administration-level trade talks, the AACUE contemplates 
an "inter-parliamentary commission," formed under the auspices of 
PARLACEN, and a "civil society commission," drawn from the labor, 
business, and NGO sectors.  These commissions will give feedback on 
the implementation process and conduct dialogue with counterpart 
groups on the EU side.  Echandi also unveiled a website through 
which private citizens can comment on or suggest development 
projects.  (http://www.aacue.go.cr/). 
 
--------------------- 
PROCESS VS. MARKETING 
--------------------- 
 
¶5. (SBU) On the margins of the conference, Ambassador Echandi said 
these dialogue groups will have no real role in negotiating or 
implementing the AACUE.  Rather, they are an opportunity for 
interested parties to gather, comment, and feel like they are "part 
of the process."  Echandi candidly described these mechanisms as 
"marketing." 
 
--------------------------------------------- 
THE MUCH ANTICIPATED EU COOPERATIVE BANDWAGON 
--------------------------------------------- 
¶6. (U) Ambassador Echandi also focused on the "cooperation" prong of 
the AACUE.  He announced that the EU is pledging 34 million Euros to 
Costa Rica for development projects through 2013.  Part of this 
money, Echandi said, will be provided "on demand," meaning Costa 
Rica will be able to use it "without regard to the priorities of the 
donor."  Echandi listed several projects already in the pipeline, 
including programs to assist Costa Rican producers to reach EU 
quality control and sanitation standards; education projects; 
programs to encourage women-owned businesses; and community policing 
and other "bottom up" security plans. 
 
--------------------------------------------- ------ 
BUT THE COOPERATIVE BANDWAGON MAY HAVE AN EU DRIVER 
--------------------------------------------- ------ 
 
¶7. (U) Speakers from the EU brought a measure of realism to the 
seminar.  Estefano Sannino, Director for Central American Relations 
at the EU, emphasized the complexity of the AACUE negotiations.  He 
said "the last issues will be the most difficult" but hoped to 
complete the next round of negotiations by the end of March. 
Christina Martins, lead negotiator for the EU, reminded the audience 
that the EU considers Costa Rica a "middle income" country which 
 
will not receive the same level of aid as others in the region.  She 
also cast doubt on Ambassador Echandi's statement regarding "on 
demand" funding.  Martin mentioned that, while recipient countries 
will propose development projects, such projects will be reviewed by 
the EU and "jointly planned" by the EU and the recipient country. 
 
--------------------------------------------- - 
SKEPTICISM REGARDING THE COOPERATIVE BANDWAGON 
--------------------------------------------- - 
 
¶8. (SBU) Several days after the conference, we asked a key 
senior-level contact at COMEX about the prospective cooperative 
assistance under the AACUE, specifically the 34 million Euro 
commitment.  The contact doubted whether the EU would actually make 
that amount available and believed that, at a minimum, it would be 
tied to various controls, benchmarks, and reporting requirements. 
Our source went further, questioning the EU's motives for promising 
the assistance.  In an interesting contrast to the "anti-CAFTA" tone 
of the seminar, the contact recognized that CAFTA-DR actually 
cleared the way for the AACUE to proceed. 
 
¶9. (SBU) We heard similar comments from a contact at Chemonics, a 
USAID contractor working on trade capacity building (TCB) issues in 
Costa Rica.  This contact also questioned the EU's promised level of 
assistance and the EU's motives.  The contact maintained that EU 
assistance is more appropriate for less developed countries.  The 
contact also reported an exchange with a Costa Rican colleague who 
asked, "Does the EU think that we are in diapers?" 
 
------------------------------------------ 
ONTO THE 7TH ROUND. . .WITH LITTLE DETAILS 
------------------------------------------ 
 
¶10. (U) The seminar provided few details about the progress of 
substantive negotiations.  Costa Rican Foreign Minister Bruno Stagno 
stated that Costa Rica hopes to complete negotiations by May 2009, 
to allow six months for legal review, and to present the texts for 
ratification at the beginning of the Spanish presidency of the EU in 
¶2010.  (This timing would also nicely cap President Oscar Arias' 
term in office, which ends May 1, 2010.)  Minister Ruiz stated that 
the sixth round of negotiations has now been completed, and that a 
seventh round will soon begin in Tegucigalpa. 
 
------- 
COMMENT 
------- 
 
¶11. (SBU) The notably high-powered seminar appears to be part of a 
strategy to portray the AACUE as a "kinder, gentler" trade 
agreement, as distinguished from CAFTA.  The seminar focused almost 
entirely on the "cooperation" and "dialogue" aspects of the deal and 
ignored the status of substantive trade issues.  The GOCR no doubt 
wants to avoid a repeat of the protracted and contentious domestic 
political debate provoked by CAFTA (and to clear the way for the 
next potentially controversial FTA, with China).  The risk will be 
if the ministers (and the public) believe the "marketing campaign" 
promoting the AACUE. 
 
¶12. (SBU) The private, more candid comments by the GOCR and 
Chemonics interlocutors remind us that all is not rosy between Costa 
Rica and Europe.  Tough trade issues remain, as would be expected in 
a comprehensive agreement like this, and a notable level of distrust 
exists on the Costa Rican side, specifically within the GOCR 
negotiation team.  Despite these behind-the-scenes realities, the 
seminar successfully conveyed to the public and the media the 
perception of the AACUE as inclusive and collaborative.  A lesson 
learned for the USG (which we are applying here) is to "market" 
CAFTA-DR in a more comprehensive manner, emphasizing the 
collaborative nature of the Agreement, its shared benefits to all 
member countries, and the "inclusive" aspects of our CAFTA trade 
capacity building assistance for Costa Rica and the region. 
 
CIANCHETTE