Viewing cable 05SANJOSE2908, CODEL BLUNT URGES PROMPT RATIFICATION OF CAFTA-DR

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UNCLAS SECTION 01 OF 03 SAN JOSE 002908 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: OREP PREL ETRD CS
SUBJECT: CODEL BLUNT URGES PROMPT RATIFICATION OF CAFTA-DR 
 
 
Summary 
-------- 
¶1. (SBU) In a meeting with Costa Rican legislators on 
December 19, the members of CODEL Blunt delivered a two-fold 
message: the United States will not renegotiate CAFTA-DR on a 
bilateral basis with Costa Rica; and the benefits Costa Rica 
now receives under the Caribbean Basin Initiative (CBI) will 
fall away whether Costa Rica ratifies CAFTA-DR or not. The 
CODEL also met with members of the GOCR cabinet and the 
president of the central bank, and were hosted for dinner by 
the American Chamber of Commerce. The visit received wide 
and favorable press coverage. Embassy is following up on the 
visit with activities to hasten ratification of CAFTA-DR in 
Costa Rica. End Summary. 
 
Meeting with Counterparts 
------------------------- 
¶2. (U) CODEL Blunt arrived in Costa Rica early in the 
afternoon of December 19. Members of the CODEL were: 
Roy Blunt (R-MO); Solomon Ortiz (D-TX); Mark Foley (R-FL); 
Ruben Hinojosa (D-TX); Gregory Meeks (D-NY); Dennis Moore 
(D-KS); and Mike Conaway (R-TX). 
 
¶3. (U) The CODEL's first meeting was at the Legislative 
Assembly and with the members of the International Relations 
and Trade Committee, which is now holding hearings on 
CAFTA-DR. Rolando Lacle, president of the committee, 
presided. With him were Laura Chinchilla, Luis Ramirez, 
Federico Malavassi, Bernal Jimenez, Ruth Montoya, Juan Jose 
Vargas, Mario Calderon, Gerardo Vargas, Carlos Salazar, and 
Epsy Campbell. 
 
¶4. (U) Representative Blunt opened the discussion by noting 
that the delegation of four Democrats and three Republicans 
all voted in favor of CAFTA-DR, but only after a hard-fought 
and vigorous debate in Congress. In the end, a majority of 
Congress recognized the importance of strengthening the bonds 
with our neighbors through increased and freer trade. 
 
Costa Rican Concerns 
-------------------- 
¶5. (U) Laura Chinchilla, vice presidential candidate in the 
February 6, 2006, elections, said that Costa Rica wants to 
compete and export, not receive aid. She said that her 
party, the National Liberation Party (PLN), wants to ratify 
CAFTA-DR as quickly as possible, but that the administration 
has been obstructing discussion of the treaty. 
 
¶6. (U) Luis Ramirez, also of the PLN, raised two questions 
for the U.S. Congressmen: how much longer will the United 
States subsidize its farmers, and why not negotiate a 
bilateral free trade agreement between the United States and 
Costa Rica? 
 
¶7. (U) Federico Malavassi of the Libertarian Movement Party 
said that his party not only supports CAFTA-DR, but wishes 
that the treaty had gone further to eliminate trade barriers 
in the region and with the United States. He said he was 
disappointed that Costa Rica was so slow in ratifying an 
agreement that was so obviously beneficial. 
 
¶8. (U) PLN legislator Bernal Jimenez asked whether in the 
future it would be possible to renegotiate some aspects of 
CAFTA-DR. 
 
¶9. (U) Ruth Montoya of the Citizens' Action Party (PAC), 
which opposes CAFTA-DR, noted that President Bush, according 
to President Pacheco, said that Costa Rica should "take its 
time" in ratifying CAFTA-DR. She said her party was not 
against free trade, per se, citing its support for the free 
trade agreement with Canada, but is against CAFTA-DR. 
 
¶10. (U) Juan Jose Vargas, who recently founded a new party 
and is now a minor candidate for president, complained that 
CAFTA-DR is surrounded by ignorance, divisiveness, 
propaganda, and lies. He said there had been a total lack of 
transparency during negotiations and that the 
telecommunications and insurance sectors became subjects of 
negotiations only at the last minute and under extreme 
pressure. He said maintaining social peace is more important 
than free trade. 
 
¶11. (U) Mario Calderon said that his Social Christian Unity 
Party (PUSC) supports CAFTA-DR but is troubled by the 
question of U.S. subsidies. 
 
¶12. (U) Gerardo Vargas of PAC said that CAFTA-DR will hurt 
small business in Costa Rica, especially farmers, and put at 
risk the nation's "food security." If CAFTA-DR passes, he 
said, Costa Rica will be at the mercy of U.S. farmers. He 
urged renegotiation of the treaty and the continuation of CBI 
benefits for Costa Rica. 
 
CODEL Responds 
-------------- 
¶13. (U) Representative Blunt said that the U.S. Congress's 
vote on CAFTA-DR was its most important foreign policy vote 
for the hemisphere in more than a decade. The idea was to 
replace a temporary, unilateral concession (CBI) with a 
permanent, negotiated, mutually-binding agreement (CAFTA-DR). 
 CBI will not last, he said, and if Costa Rica rejects 
CAFTA-DR, the United States will not then negotiate a 
separate bilateral agreement with Costa Rica. 
 
¶14. (U) Representative Ortiz said that his vote in favor of 
CAFTA-DR was influenced by his border district's positive 
experience with NAFTA. He said that before NAFTA, 
unemployment in his district was 22 percent; today it is 6 
percent. He noted that people are always afraid of change. 
 
¶15. (U) Representative Foley said that there was a lot of 
pressure on him in his sugar-growing district to vote against 
CAFTA-DR. But he was persuaded by President Bush to think 
about how important trade and economic development were to 
ensure peace and stability in Central America. He said Costa 
Rica must ratify CAFTA-DR now and not gamble on some 
theoretical future, better agreement. He said, "Free trade 
agreements in the United States will not get easier to pass, 
but only harder." He said it is important for politicians to 
put their country's interests above their own political 
self-interest as he had done. 
 
¶16. (U) Representative Hinojosa, like Ortiz from a Texas 
border district, said that employment in his district 
improved dramatically with the implementation of NAFTA; there 
are more and better jobs. He said it was not realistic for 
Costa Rica to hope for a new, separate, bilateral treaty; it 
will not happen, he said. Costa Rica had to get on the train 
now because it is leaving the station. 
 
¶17. (U) Representative Moore said that trade not only brings 
economic benefits, but also helps consolidate democracy. He 
said that CBI is a temporary measure and will not be extended 
for Costa Rica. He said that former President Carter's 
letter which characterized CAFTA-DR as an opportunity to help 
fledging democracies was influential in his decision to vote 
in favor of the agreement. 
 
¶18. (U) Representative Meeks said that Costa Rica, because 
of the level of education of its people, stood to benefit 
more from CAFTA-DR than any other country. He said 
renegotiation of the treaty was out of the question and that 
CBI benefits will be phased out. He reminded the Costa Rican 
legislators that in negotiations neither side gets what it 
considers to be the perfect result. He said they should 
trade "short-term pain for long-term gain;" the question is 
whether their children will be better off with or without 
CAFTA-DR. Meeks said it is clear that while CAFTA-DR will 
not solve all of Costa Rica's economic problems, "it is a 
giant step in the right direction." 
 
¶19. (U) Representative Conaway urged the Costa Rican 
legislators to consider what is in the best interest of their 
country as a whole and to "push back" against special 
interest groups. He said there must be no illusions that 
CAFTA-DR will be renegotiated or that CBI will go on forever. 
 He noted that the U.S. Congress voted the night before to 
eliminate subsidies across the board in 2007. 
 
Press Conference 
----------------- 
¶20. (U) In a press conference immediately following the 
roundtable discussion with Costa Rican legislators, 
Representative Blunt reiterated that the United States wanted 
Costa Rica to be a part of CAFTA-DR, but that the Costa 
Ricans would have to make their own decision in that regard. 
Representative Meeks said that Costa Rica will benefit from 
CAFTA-DR and noted that several Caribbean countries also want 
a free trade agreement with the United States. 
Representative Hinojosa stressed the benefits of NAFTA in his 
district where in the last 12 years unemployment dropped from 
22 percent to 8 percent, despite population growth during 
that period of 48 percent. 
 
Evening Events 
-------------- 
¶21. (U) In the evening the CODEL attended a reception at the 
Ambassador's residence and met with Ministry of the Economy 
Gilberto Barrantes, Acting Minister of Foreign Trade Doris 
Osterlof, Vice Minister of Foreign Affairs Marco Vinicio 
Vargas, adviser to the Economic Council Pedro Quiros, and 
Central Bank President Francisco de Paula Gutierrez. 
Following the reception, the Costa Rican-American Chamber Of 
Commerce (AmCham) hosted the CODEL for dinner. The CODEL 
departed the morning of December 20 for El Salvador. 
 
Press Coverage 
-------------- 
¶22. (U) The CODEL's principal message was featured in the 
headlines of articles in Costa Rica's December 20 daily 
newspapers, as follows. La Nacion: Congressmen reaffirm that 
CAFTA renegotiation is improbable. La Republica: U.S. 
Congressmen indicate that bilateral renegotiation is not an 
option. La Prensa Libre: U.S. Congressmen say, "CAFTA cannot 
be renegotiated." Al Dia: No to renegotiation. Both La 
Nacion and La Republica had long articles on December 21 
pointing out the dire consequences for Costa Rican exports if 
CBI were to be terminated. 
 
¶23. (U) On December 21, several commentators noted that the 
CODEL took the wind out of the sails of CAFTA-DR's main 
opponent in Costa Rica, PAC presidential candidate Otton 
Solis, who has been claiming that the treaty can and must be 
renegotiated. Solis himself, however, was undaunted, saying 
that regardless of what the CODEL members said, CAFTA-DR can 
be modified to protect small and medium-sized businesses in 
Costa Rica. Solis's companion on the ticket as candidate for 
vice president, Epsy Campbell, told the press that the U.S. 
representatives were trying to put undue pressure on Costa 
Rica, but in fact they had nothing new to say. (Campbell 
arrived late at the roundtable with the CODEL and did not 
speak.) 
 
¶24. (U) At the same time that the CODEL members were meeting 
with their Costa Rican counterparts, USTR released its 12/19 
statement regarding CAFTA-DR's entry into force. What 
particularly attracted the attention of the Costa Rican press 
was the part of the statement noting "a seamless transition" 
between CBI and CAFTA-DR and that existing preferences would 
continue to be enjoyed only "during a brief transition 
period." The statement undercut a main argument of CAFTA-DR 
opponents in Costa Rica, namely that CAFTA-DR was unnecessary 
because Costa Rica already had, and would continue to have, 
CBI. 
 
Comment 
------- 
¶25. (SBU) The USTR statement along with the comments of the 
CODEL members made crystal clear what the Embassy has been 
telling the GOCR, the legislature, and the press all along -- 
CBI is not forever, and CAFTA-DR will not be renegotiated 
with Costa Rica. We know that two thirds of the legislature 
and two thirds of the population support CAFTA-DR. The 
problem here has been a feckless and indecisive president who 
refused to send CAFTA-DR to the legislature until late 
October, thus starting a process of ratification that 
normally takes at least six months. Embassy plans to follow 
up the very successful CODEL and USTR announcement with a 
concerted push to get the legislature to act quickly. The 
first step will be an exclusive interview of the Ambassador 
with La Nacion, Costa Rica's leading daily newspaper. 
 
¶26. (U) This cable was not cleared by the CODEL. 
LANGDALE