This record is a partial extract of the original cable. The full text of the original cable is not available.

C O N F I D E N T I A L SAN JOSE 002105 
 
SIPDIS 
 
WHA/CEN 
EB FOR WCRAFT, BMANOGUE 
E FOR DEDWARDS 
WHA FOR WMIELE 
WHA/EPSC FOR KURS, LGUMBINER 
H FOR JHAGAN 
STATE PASS TO USTR FOR RVARGO, NMOORJANI, AMALITO 
 
E.O. 12958: DECL: 09/09/2015 
TAGS: ETRD ECPS ECON PREL PGOV SOCI CS
SUBJECT: COSTA RICA: SIGNALS OF MORE FLEXIBILITY ON CAFTA-DR 
 
REF: A. (A) SAN JOSE 02090 
 
     ¶B. (B) SAN JOSE 02047 
 
Classified By: Charge Russell Frisbie, reasons 1.4(b) and (d) 
 
¶1.  (C) Summary.  After attending a meeting on September 8, 
2005 with various business representatives who are in favor 
of the United States-Central American-Dominican Republic Free 
Trade Agreement (CAFTA-DR), President Pacheco and Minister of 
Foreign Trade (COMEX) Manuel Gonzalez have alluded to 
delinking fiscal reform and CAFTA-DR.  Also on September 8, 
Foreign Minister Tovar told Charge that President Pacheco had 
said he would send CAFTA-DR to the Assembly later this month, 
after he receives the report from the Commission of Eminent 
Persons on September 16, 2005 (Refs A and B).  End Summary. 
 
 
¶2.  (U) On September 8, 2005, President Pacheco met with 
representatives of the National Proactive Alliance (APRONAC), 
a group of pro-CAFTA-DR business persons, solidarity leaders, 
workers, and professionals. Reportedly, the purpose of the 
meeting was for APRONAC members to express their concerns and 
to urge Pacheco to send the agreement to the Assembly.  Mario 
Montero, executive director of the Chamber of the Food 
Products Industry, said that during the meeting Pacheco told 
them that he realizes that groups that are against CAFTA-DR 
are blocking fiscal reform and that he will not play that 
game. 
 
¶3.  (U)  The president of APRONAC Franco Pacheco said that 
we left the meeting satisfied because the President assured 
us that he believes in CAFTA-DR and that it is an opportunity 
for the country.  He further stated that ... in this 
meeting the President told us that he no longer is 
conditioning the sending of CAFTA-DR to the Assembly on the 
approval of the fiscal reform bill...  He added that the 
President is only waiting on the report from the Commission 
of Eminent Persons. 
 
¶4.  (C) On September 8, during a courtesy call on Foreign 
Minister Tovar by Charge, Tovar said that President Pacheco 
had told him earlier in the day that he had decided to delink 
CAFTA-DR and fiscal reform and send CAFTA-DR to the Assembly 
in September so that the ratification process could begin. 
 
¶5.  (U) Foreign Trade Minister Manuel Gonzalez told the press 
that fiscal reform is an Administration priority, but that 
does not mean that CAFTA-DR is not also a high priority.  He 
added that everything has its limits and one cannot continue 
to ignore concrete proposals such as CAFTA-DR.  To not have 
either fiscal reform or CAFTA-DR is to be punished twice. 
Fiscal reform is out of our (the Administration,s) control 
but CAFTA-DR is not.  We will send it to the Assembly at the 
right time, and I expect it will be soon, Gonzalez added. 
He stated the President will receive the report from the 
Commission of Eminent Persons on September 16 and will reveal 
its contents on September 20. 
 
¶6.  (SBU) Gonzalez also recognized the need to move on the 
complementary agenda, which was presented to the Assembly 
last week and consists of legislation approving three loans 
to fund projects that will improve rural roads and 
customs-clearing systems, and fund competitiveness 
initiatives for small- and medium-size businesses.  The 
Administration is also working on the implementation 
legislation to open the insurance and telecommunications 
industries, as is required under CAFTA-DR.  The Law to 
Strengthen and Modernize the Costa Rican Institute of 
Electricity (ICE) was also mentioned as a priority, but that 
legislative project appears stalled (septel). 
 
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COMMENT 
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¶7.  (C)  The GOCR has not explicitly delinked submission of 
CAFTA-DR to the legislature from the President's self-imposed 
requirement that the Assembly first pass the fiscal reform 
bill.  However, the statements made by President Pacheco and 
Minister Gonzalez following the APRONAC meeting, as well as 
Minister Tovar's comment to Charge, indicate a change in 
President Pacheco's thinking.  If true, this is a positive 
development that should advance CAFTA-DR ratification in 
Costa Rica. 
FRISBIE