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 001713 
 
SIPDIS 
 
SENSITIVE 
 
WHA/CEN 
EB FOR WCRAFT 
E FOR TSMITHAM 
WHA FOR WMIELE 
WHA/EPSC FOR KURS 
H FOR JHAGAN 
STATE PASS TO USTR FOR JYOUNG, CPADILLA, AMALITO 
 
E.O. 12958: N/A 
TAGS: ETRD ECPS ECON PREL PGOV SOCI CS
SUBJECT: COSTA RICAN REACTION TO CAFTA-DR APPROVAL IN THE 
U.S. CONGRESS 
 
REF: (A) SAN JOSE 01587 
 
     (B) SAN JOSE 01636 
     (C )SAN JOSE 01693 
     (D) SAN JOSE 01455 
 
 
¶1. (U) Summary.  After passage of the CAFTA-DR implementing 
legislation in the late evening hours (in Costa Rica) by 
the U.S. House of Representatives, GOCR officials, private 
business persons, and labor leaders offered their 
reactions.  Local media coverage of the ratification 
process in the U.S. has been intense, and the approval in 
the U.S. made front-page headlines in almost all of the 
major national daily newspapers.  At this time, it appears 
that approval in the U.S. did not change the overall 
opinions of these Costa Ricans, but it has brought 
increased focus on CAFTA-DR and a sense of urgency to some 
regarding the need to start formal discussions of this 
issue in the Legislative Assembly.  End Summary. 
 
¶2.  (U) Local media have been following the U.S. House of 
Representatives' vote closely.  As an example of the high 
profile of this event, the vote was carried live on CNN en 
espanol on cable systems.  Daily newspapers, "La Nacion," 
"La Republica," and "La Prensa Libre" made the CAFTA-DR 
issue front-page news, and interviews of key CAFTA-DR 
personalities filled the airwaves offering their reactions 
to the approval in the U.S. Congress. 
 
¶3.  (U) Minister of Foreign Trade (COMEX) Manuel Gonazalez 
was quoted as stating that "the approval of CAFTA yesterday 
fills us with optimism.  However, Costa Rica will continue 
its process of analysis on its own timetable."  These 
statements are consistent with his and President Pacheco's 
previous lukewarm and conflicting comments about the 
ratification process in Costa Rica (Refs A and B).  COMEX 
is the governmental organization that negotiated CAFTA-DR 
and is responsible for production and implementation of the 
complementary agenda for CAFTA-DR (Ref C). 
 
¶4.  (U) Oscar Arias, former president of Costa Rica and 
front runner in the next presidential election, stated that 
he is very happy with the vote in the U.S. and that "it is 
an opportunity to boost development, to increase investment 
that will create employment opportunities.".  He goes on to 
state that he hopes that the current administration will 
decide to send CAFTA-DR to the Legislative Assembly.  He 
added that to not do so would have a negative effect on the 
country. 
 
¶5.  (U) Gerardo Gonzalez, President of the 57-member 
Legislative Assembly, told the press that he would like the 
President to send CAFTA-DR to the Assembly as soon as 
possible to allow discussions to begin on this important 
issue.  He stated that "the country is falling behind . and 
it is urgent that we start discussion [of CAFTA-DR] in the 
Assembly." He added that he is against the President's 
condition of requiring approval of the Fiscal Reform (tax 
increase) bill prior to sending CAFTA-DR to the Assembly 
for ratification (Ref D).  Gonzalez is opposed to the 
Fiscal Reform bill in its current form because special tax 
treatment that some Assembly members have proposed in over 
1000 amendments to the bill. 
 
¶6.  (U) Those opposed to CAFTA-DR tried to minimize the 
approval vote of the U.S. Congress.  Albino Vargas, 
President of the approximately 15,000-member National 
Association of Private and Public Employees (ANEP), 
continued to voice his opposition to the agreement and 
stated that approval in the U.S. did not change his or the 
organization's stance on CAFTA-DR, and that it has nothing 
to do with ANEP's labor agenda.  He stated that 
"independently of what the U.S. decides, the struggle of 
those in Costa Rica who oppose CAFTA-DR continues 
unaltered.  There is a large part of the citizenry that 
will take to the streets when CAFTA-DR is sent to the 
Assembly." 
 
¶7.  (U) In a discussion with Poloff, Rodrigo Aguilar, 
president of the 90,000-member labor union federation Rerum 
Novarum, expressed his disappointment that CAFTA-DR was 
passed by the House of Representatives, but holds out hope 
that Pacheco's Commission of Eminent Persons will return a 
negative recommendation (Ref B).  He acknowledged that 
Pacheco will come under increasing pressure from commercial 
interests to present the treaty but believes Pacheco will 
wait for the Commission's report, which will be available 
no sooner than September 17, 2005.  Aguilar reconfirmed his 
labor organization's determination to participate, if not 
organize, anti-CAFTA-DR demonstrations upon its 
presentation to the Legislative Assembly.  When asked 
whether he had considered possible uses for labor 
enforcement funds attached by the U.S. Senate, he admitted 
he had not thought of this, but agreed it could have 
positive impact. 
 
¶8.  (U)  In "Al Dia," Epsy Campbell, head of the left- 
leaning Citizens' Action Party (PAC) Assembly members, 
expressed that "we will do everything possible to ensure 
that [CAFTA-DR] is not approved in Costa Rica.".  She 
believes that the country deserves something better and 
acknowledges that increased pressure will come to pass 
CAFTA-DR, not only from the U.S., but also from the local 
business sector. 
 
¶9.  (U) Many local business representatives see the 
approval in the U.S. as a very positive sign, and 
acknowledge that there is now a sense of urgency in the 
ratification process in Costa Rica.  Miguel Schyfter, owner 
of a clothing manufacturing company, stated that "we must 
hasten the [ratification] process because there are 
thousands of textile workers who will see their jobs move 
to other Central American countries if investment 
conditions are not clarified [via implementation of CAFTA- 
DR] in Costa Rica."  Bart De Lange, an exporter of 
ornamental plants, stated that "investment in Costa Rican 
business is paralyzed because of the delay with the 
ratification process of CAFTA-DR.  Ratification in the U.S. 
puts us up against the clock."  Other business 
representatives said that every day that passes without 
CAFTA-DR in effect is a lost opportunity to take advantage 
of the benefits of the trade agreement. 
 
¶10.  (U)  Luis Guillermo Solis, a noted political analyst, 
stated that "the approval of CAFTA-DR in the U.S. has 
increased the pressure to start the discussions in Costa 
Rica.  However, the current political setting for this 
discussion is not the best.  It would be irresponsible to 
discuss this issue in the middle of an electoral campaign." 
He implies that, since the entire Assembly and 
Administration will change, this issue should be left to 
the next Legislative Assembly and Administration which will 
take office in May 2006. 
 
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COMMENT 
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¶11.  (SBU)  The process of passage of the implementing 
legislation by the U.S. House of Representatives has not 
yet had a noticeable effect on the GOCR.  President Pacheco 
has painted himself into a corner by publicly and 
repeatedly stating that he will not send CAFTA-DR to the 
Assembly until (1) the Commission of Eminent Persons 
delivers its report to the President; and (2) the Assembly 
passes the Fiscal Reform bill.  The former task will not be 
completed, at the earliest, until mid-September, and it is 
doubtful that the latter task will ever be completed in his 
administration.  The one thing that is certain is that 
President Pacheco's administration will have to live with 
more pressure from those favoring CAFTA-DR and those 
against. 
KAPLAN