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CAFTA: Point of Disagreement in Costa Rica

Editor's Note: Juliana Rincón Parra has already shown us the extensive opposition to Costa Rica's ratification of the Central American Free Trade Agreement. However, San Jose-based Roy Rojas was adamant that we also show the support for CAFTA in Costa Rica and its blogosphere. The following post has been translated from its original Spanish.

caftaIn the last two years, in Central America and the Dominican Republic, a lot of political discussion has centered around the good and the bad that would come from the proposed free trade agreement with the United States. Out of all the countries involved, Costa Rica is the only one that has not ratified the Central American Free Trade Agreement. This is because an opposition of minority parties has tried to kidnap the Legislative Assembly and to obstruct all parliamentary progress.

What has in fact happened in the countries that have ratified – Nicaragua and El Salvador for example – is that exports to the US have increased significantly and unemployment has not gone up as opponents had warned. What is the fear keeping labor unions from supporting a deal with a country as consumerist as the United States, where, at the moment, Costa Rica already exports millions of dollars every year?

How is it that so many economists and experts on the subject, like those of the Inter-American Development Bank (I.A.D.B.) and Central American Bank of Economic Integration (BCIE), among others, could be mistaken and allegedly want to drag us into a catastrophe like the unions insist. This is simply inconceivable. We cannot close our doors to a great market like the United States, which, although we are currently insulated from by the “Initiative of the Caribbean Account”, this program could be eliminated at any time. And we would be left unable to export our agricultural products, technologies, and textiles to a market that feeds thousands of Costa Ricans.

According to data provided by the Ministry of Economy, 13,000 people could be unemployed with the exit of textile manufacturers from the country as it would be impossible to compete with other manufacturing countries that are able to export their products, without tariffs, to the United States. These companies leaving Costa Rica would then install in some other country of the region that has ratified the treaty. At the moment, in some zones of Costa Rica, the textile sector provides almost 78% of employment. In 2007, textile exports from Costa Rica diminished 11% compared to the previous year. Meanwhile, in countries of the region that are part of CAFTA, textile exports have increased 17%, which makes us wonder if the treaty really wouldn't benefit us.

Now, one of the subjects that has been most controversial is the opening of the telecommunications industry to more competition (which does not equate to privatization). Many points of view exist about the topic, such as in Fusil de Chispas [ES], which frequently makes references to data from other countries where there are multiple suppliers of telecom services, such as this post pointing readers [ES] to an article from the online magazine Confidential, which points out the low tariffs that we have in Costa Rica [ES], even though we are third in cell phone use per capita worldwide.

En el año 2000, la tarifa por el servicio celular en Costa Rica era la más baja de Centroamérica, y estaba más de 50% por debajo de la segunda más barata, la salvadoreña. Así consta en un completo informe publicado entonces por la revista online Confidencial, sobre la calidad del servicio ofrecido por BellSouth en Nicaragua.

In 2000, the tariff by the cellular service in Costa Rich she was lowest of Central America, and was more than 50% lower than second place El Salvador. That is according to a complete report [ES] published by the online magazine, Confidential [ES], on the quality of the service offered by BellSouth in Nicaragua.

And so, if we are clear that we will not have privatization, and what we will have is just more competition, then why is there fear of letting other companies offer cellular and internet service? If the current provider, ICE, is the cheapest of the region and practically the world, than what does it matter if others come also? Competition benefits all of the users. ICE would likely improve their service and foreign service providers would have to compete with their low prices. The Association of Young people for the Development [ES], an organization of Costa Rican youths, has a weblog that deals mostly with the free trade agreement (State Universities and CAFTA [ES], State-investor Arbitration [ES], Where is our progress? [ES] , etc), It shows a clear example of the diversity of opinions on the topic of free trade. When the moment arrives for deciding, nobody it can say there was no information.

Supporting the free trade agreement does not mean that we support the North American government. Nor that we agree with its manifold international policies. But we recognize that, as a small country, we need a commercial partner. We need their market and we need a treaty which guarantees the right to their market which are now without control. With a treaty, we have a “contract” that would not allow them from preventing our entrance in the future.

27 comments

  • The Referendum is comming!!!

    The peoples will decide.

  • John

    Hopefully the people of Costa Rica will stop this madness once and for all. This is the most dangerous proposition that Costa Rica has faced. The people of Costa Rica need to realize that TLC is not free trade at all. There are many restrictions placed on trade by the treaty and mandates requiring Costa Rica to deal with the US rather than other countries for certain items. TLC does nothing more than protect the US and its corporate interests at the expense of Costa Rica as a independent nation. The environment, economy, and individual rights of the Costa Rican people are in great danger. Hopefully the people will stand up and see this treaty for what it is.

  • Tico

    It’s good to finally see some glimpse of neutralty on the coverage of this issue. After so many anti-CAFTA posts it’s good that you are presenting the point of view of someone who has something good to say about the TLC. I hope from now on you provide a more balanced coverage of both sides of the issue.

    Thanks to Roy for the post!

    Vote on referendum day! – Say YES to CAFTA!

  • I will vote No.
    No conviene.

  • Jorge Alban

    This is not neutrality “Tico”, its plain propaganda.

    Costa Rica Still hasnt signed the CAFTA agreement simply because after 40 years of real democracy, social development and solidarity we have a LOT more to loose than our poor and desperate neighbors…

    Want to know the results of this so called FREE TRADE AGREEMENT? Well just look at Mexico, who’s been aplying it for almost ten years: there is more and more illegal immigration to the US, a couple of megacorporations have taken hold of corn and many mexican people can no longer afford their daily tortillas:

    http://news.bbc.co.uk/hi/spanish/business/newsid_6319000/6319405.stm

    Telmex now owns 90% of the mexican telecommunication market and its mexican tycoon Carlos Slim threatens Bill Gates as the worlds riches man according to Forbes 2007 report.. talk about free trade… ever try calling form a Mexican pay phone or cell phone… well its a rip off!!

    http://www.laopinion.com/supp7/?rkey=00070413040818623343

    Fortunately some americans are waking up (not Bush & Co. who will forever be in never ever fast cash land) and realizing that by sowing poverty and injustice you will only reap… more poverty and injustice…

    The Democrats pressure for serious environmental, worker protection and generic drugs access ammendments in the Central American Free Treaty is a step forward but it will takemany years of continued efforts to compensate for decades of Gung Ho foreign policies and plain dumb reagonomics in Central America!

  • SI TLC.
    Vote Yes

  • VIOLETA DUARTE FONSECA

    As Costarican I cann”t let this oportunity passed me ,el
    TLC is not a good choice for my country, they are more disavantages for us,than a good ones.We can have other
    treaties,in the future with better advantages and better
    negotiations no only one way treaty, who represent this one.

  • please, visit concostarica.com and see why more and more ticas & ticos say NO to CAFTA.

  • Jay Dubbya

    As a Canadian who has traveled throughout Central America for many years and lives about half time in Costa Rica.. AND has seen the ‘development’ of NAFTA over the past (more than) ten years.. I can say without hesitation.. WAIT!! Costa Rica is a tiny country, fragile in many respects, but with enormous accomplishments in social development and human rights; do some research and learn how the US has attempted (?!) to bully their LARGEST trading partner (that would be Canada, still, not China).. year after year, after sorry year. They have NEVER won a World Trade Tribunal case (lost five on softwood lumber at last count) yet have chosen to ignore the ‘rules’ of playing fair on trade issues. This is their way.. and anyone who thinks that Free Trade means anything close to Fair Trade.. just hasn’t been paying attention.

    Costa Rica has many issues to deal with internally.. the garment biz is eroding naturally due to higher wages/costs in CR which will not be ameliorated by TLC.. keep your options open, another day will come and you can be more prepared.. study the issues carefully,, don’t be swayed by emotional rhetoric… but finally, vote no this time.. it is not the time for ceding sovereignty.
    Jay

  • O. Lamoree D.

    ICE has low rates because BY LAW it cannot make a profit… the reform of the ICE law (and INS for that matter) DOES permit ICE and INS to make a profit as the telcoms coming in at the best of The Brothers will ALSO want to make a profit. But it will be easy because the TLC also says that “you guys”, meaning Central America, Dominican Republic as one, have to agree on a Minimum Wage for everybody… lets see what happens: Guat MW at ¢24,000, Honduras at ¢48,000, Salvador at ¢60,000, Nicaragua at ¢46,000 and Costa Rica at ¢120,000….bye bye Minimum Wages… which means less for the CCSS, crash and burn, INS, crash and burn, YOUR pensions, crash and burn, internal CR economy, crash and burn…. and then there is the CR judicial system… treaty disputes go… oh, to some anonymous “arbritation” judges that work for the businessmen…. yoo yoo, wake up, Metalclad de Mexico? Well, if you can name the one that closed the CNP corn dryer in Guacimo 20 years ago and took 300 maizeros to ruin, you will also be able to name the Father of the TLC and his henchmen…. Sure Nicalandia has the TLC, but now, just days ago, the gringos just slapped on a US$10 per cigar! import tax… and you call that “love of the benevolent gringos?” Get real, come vote NO with me on October 7th….

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