VZCZCXYZ0019
PP RUEHWEB

DE RUEHSJ #1975/01 3171451
ZNR UUUUU ZZH
P 131451Z NOV 07
FM AMEMBASSY SAN JOSE
TO RUEHC/SECSTATE WASHDC PRIORITY 9185
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE PRIORITY
RUEHDG/AMEMBASSY SANTO DOMINGO PRIORITY 1569
RHEHNSC/NSC WASHDC PRIORITY

UNCLAS SAN JOSE 001975 
 
SIPDIS 
 
SENSITIVE 
 
SIPDIS 
 
DEPT FOR WHA, WHA/CEN, WHA/EPSC, AND EEB 
PLEASE PASS TO USTR: AMALITO 
 
E.O. 12958: N/A 
TAGS: PGOV PREL PINR ETRD CS
SUBJECT: THE POLITICS OF RESENTMENT IMPEDE IMPLEMENTING LEGISLATION 
 
REF: San Jose 1856 
 
¶1.  SUMMARY: The GOCR's victory in the October 7 CAFTA referendum 
(reftel) did not translate into fast action by the national legislature 
(Asamblea).  After a brief post-referendum honeymoon, the opposition 
all-too-quickly deployed familiar obstructionist tactics, asserting 
that the public's vote for ratification was not automatically a vote 
for the implementing legislation.   The GOCR's fragile pro-CAFTA 
coalition responded slowly, but with President Arias's return from 
China on October 29 has now embarked on an ambitious track to pass the 
implementing legislation by 15 January (Arias's stated deadline) in 
order to allow sufficient time for review by the constitutional court 
and USTR before the entry-into-force deadline.  Caught in the middle is 
the Ministry of Foreign Trade (COMEX), simultaneously drafting 
technical legislation, lobbying the Asamblea, consulting with USTR, and 
negotiating with the EU.  Given this backdrop, we believe the prospects 
are not good for the GOCR to complete the CAFTA-DR implementing 
legislation and regulations before March 1.  We recommend that the USG 
begin a strictly internal discussion on the mechanics of an extension 
and how such a move for Costa Rica would play out in the other CAFTA-DR 
countries. END SUMMARY. 
 
======================= 
A SHORT-LIVED HONEYMOON 
======================= 
 
¶2.  The political afterglow from the referendum did not last very long. 
The week after the vote, Arias invited the leaders of all the factions 
in the Asamblea to discuss the way forward.  There were media reports 
of a possible wider national dialogue, based on meshing the GOCR's 
agenda (with CAFTA at the top) with development initiatives favored by 
coalition partner PUSC and perhaps elements of a "mitigation agenda" 
proposed by PAC leader Otton Solis.  Miffed that Arias rejected Solis' 
agenda as duplicative and largely covered by the GOCR's plans, the PAC- 
led opposition went back to its old habits.  By October 26, they had 
dumped over 1000 motions on one piece of implementing legislation and 
demanded that a second item be sent to the Constitutional Chamber (Sala 
IV) for a 30-day review.  The PAC was emboldened by small, but vocal 
groups of anti-CAFTA protestors, who jammed the visitor galleries to 
cheer them on.  (Once the Asamblea staff installed smoked glass in the 
galleries to diminish the distractions, the entire building was emptied 
by a bomb threat on November 7, so that protestors could confront 
legislators directly.)  COMEX contacts have told us that in their 
meetings at the Asamblea, CAFTA-DR opponents have harassed and intimidated them as well. 
 
========================================= 
IS DEMOCRACY ABOUT VICTORY FOR EVERYBODY? 
========================================= 
 
¶3.  The return to divisive obstructionism was a clear signal that the 
opposition refused to accept the referendum results.  PAC leader Otton 
Solis told us that his party "recognizes" the result, but would still 
oppose implementing legislation in order to "improve" it, or at least 
to make PAC's voice heard.  He and PAC faction chief Elizabeth Fonseca 
insist their party "owes" that much to the 757,000 voters who voted 
"no" in the referendum.  Meanwhile, PAC members and other CAFTA 
opponents continue to insist that the playing field for campaign 
support, media time, and media coverage were all tilted in favor of the 
"Si" alliance, aided by alleged interference in the referendum process 
by the USG.  As one leading political commentator told us, this ongoing 
refusal by the hardened opposition to acknowledge the results points to 
a politics of resentment directed toward the GOCR, independent 
institutions in the government such as the TSE, and business.  In this 
consensus-obsessed mindset, if everyone doesn't win, then no one wins. 
 
¶4. With the entrenched (and resentful) opposition ready to block 
progress on the implementing legislation, the GOCR has to rely on its 
unpredictable coalition of 38 (the "G38") of the 57 Diputados in the 
Asamblea.  Although this two-thirds majority should be sufficient to 
overcome PAC intransigence, success requires that all 38 members play 
their part, all the time.  Thirty-eight is the minimum number required 
for a quorum, for example, a fact gleefully exploited by PAC.  If any 
of the 38 are out sick or even late for a session, the PAC-led 
opposition has made sure their own members also walk out, blocking a 
quorum. This is but one of a number of mechanisms in the labyrinth of 
legislative rules the opposition has employed to delay progress. 
 
======================================= 
ENERGIZED FOR THE FINAL LAP?  HOPEFULLY 
======================================= 
 
¶5.  In the last ten days, the G38 has held together, and there have 
even been glimmers of GOCR-PAC cooperation in committee on a few 
issues.  The President's public criticism of the opposition's ignoring 
the results of the referendum (and the will of the people) may be 
finding some resonance.  (CID-Gallup data released on October 31 also 
showed that voters expect legislators to get on with CAFTA, now that 
the referendum is over.)  To maintain the pressure, Minister of 
Government Rodrigo Arias announced November 7 that the GOCR will not 
seek an extension and plans to complete the legislative heavy lifting 
by January 15.  This target date accounts for a 30-day judicial review 
of legislation in the Sala IV and allows for a subsequent two-week 
review by USTR. 
 
¶6. There is still a long way to go.  Prospects for meeting a January 15 
deadline are jeopardized by the crowded legislative calendar (requiring 
the Asamblea to finalize the budget before the end of November) and 
end-of-the-year holidays in December.  The pro-CAFTA coalition is using 
all the tools at its disposal, including unusual morning, evening and 
weekend sessions, application of fast track procedures,  some limits on 
debate, and (if approved) a shorter (one-week) December recess, to make 
full use of the time. 
 
================== 
LEGISLATION STATUS 
================== 
 
¶7.  As of November 9, one piece of implementing legislation had gone 
through its first vote and is now before the Sala IV. (Per Costa Rican 
legislative proceedings, nearly all bills are voted on twice by the 
full Asamblea before becoming law.  The second vote will occur after 
the constitutional review.)  There are seven other bills that are out 
of committee and waiting action in the plenary.  The rest are either in 
committee or waiting submission.  In addition to the bills, the GOCR 
must also draft and issue several regulations.  COMEX reports that it 
is working on the regulations, but it has been somewhat difficult as 
various regulations depend on the outcomes of the not-yet-finalized 
legislation.  The regulation regarding bio-equivalency is especially 
difficult since the opposition views bio-equivalency as an unnecessary 
intervention.  COMEX intends to discuss this regulation in Washington, 
using the meeting with USTR to pressure the Ministry of Agriculture and 
various diputados to allow the regulation to go forward. 
 
================= 
DON'T FORGET USTR 
================= 
 
¶8.  In spite of the GOCR's renewed effort to use the legislative 
calendar to the maximum, COMEX has yet to finish its consultations with 
USTR.  According to COMEX, consultations will continue during the weeks 
of 12 November and 26 November.  This remains a wild card in an already 
complicated process.  If differences between COMEX and USTR -- notably 
in the areas of IPR and telecommunications -- remain after November, 
resolving such differences while working with the Asamblea further 
elevates the risk of what is already a political-technical high wire 
act. 
 
================================= 
COMEX IS STRETCHING ITS RESOURCES 
================================= 
 
¶9.  COMEX's resources are further stretched by its increasing political 
role with the Asamblea.  In order to shore up support for the 
implementing legislation, COMEX has, in essence, been lobbying the 38 
pro-CAFTA diputados.  Private sector contacts more experienced in 
"working" the legislature have told us COMEX's lack of political 
gravitas has weakened this lobbying effort; the COMEX team are seen as 
technicians, not political heavyweights.  COMEX staff has used their 
sessions with the diputados to stress that changes in the bills that 
affect measures required by CAFTA-DR are unhelpful and would delay 
entry into force.  Now fully aware that COMEX is also consulting with 
USTR on the draft legislation, some members of the GOCR's G38 have 
complained that COMEX "is selling-out the country."  If this new 
lobbying role were not enough, COMEX was fully engaged by Costa Rica's 
hosting the first round of the Central America-EU talks in October, 
plus its daily responsibilities in international fora on a variety of 
issues. 
 
======= 
COMMENT 
======= 
 
¶10.  Had we written this analysis three weeks ago, we might have been 
more pessimistic.  Now, there is some call for what COMEX interlocutors 
call "depressed optimism."  The GOCR and nearly all of its G38 in the 
Asamblea are clearly seized with the urgency of getting the CAFTA job 
done.  Even PAC leaders Solis and Fonseca acknowledge to us privately 
that they expect CAFTA will enter into force for Costa Rica, 
eventually.  We do not discount the possibility of the GOCR crossing 
the finish line in time, but we believe this is highly unlikely. 
Hence, Post believes that a strictly internal USG discussion on the 
mechanics of an extension needs to start in the near future. 
Understanding the position of the other CAFTA-DR countries and their 
own internal mechanisms for granting an extension would also be 
important. 
 
BRENNAN