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.


  • Monica

    Some of us Costaricans are embarassed and ashamed of the ‘NO’ movement. Some of their organizers have planted hatred into the hearts of many Costaricans and made them believe this is a social-economic class war. They will be entirely to blame if there is some violence on Sunday. They have used nothing but lies and fear. Even in the debates they said “we are only talking to the middle and lower class”, Costa Rica is made up by all Costaricans, the wealthy too! Many Costaricans are tired of corruption and we do not approve nor embrace what this goverment did (with the memo scandal). But why hurt the workers and the 50,000 Costaricans who graduate every year and need a job? It is crytal clear business will head northward. The ‘NO’ movement is anti-patriotic, leftist and anti-globalization. They do not speak for all Costaricans. For our future, stability and for the 900,000 Costarican who live in poverty, vote yes!

  • I will say today NO to BUSH and the Mega coorporations he repesent.

    I am today like many others angry about the theart of Washinton and specially about the explicit interventionism deliver by them on their official anouncement.

    I will vote against you not matther how much money you have. Shame on you.. shame because we have been good friends for many many years.

  • Lorne

    There is a big reason why Costa Rica needs to vote YES!
    Firstly i dont agree with many decisions the US government makes nor its media influence on the people. This does not mean Costa Rica will become the United States.
    First, Costa Rica cell phone service sucks…telephones are very costly to purchase and the service is horrible. There is also ZERO customer service. Suprising??? No because there is no reason to service people when you own the industry!!
    Second, gasoline, electronics, vehicles, parts and countless other products are way to expensive for the average Costa Rican. WHY??????? MMMM Maybe because they tax all imported good so much, that they are no longer affordable! MMMMM I wonder why there is such a split rich/poor status in Costa Rica.
    Lastly, from Importing a vehicle, to the paying utility bills, banking, municiple laws, corrupt municipalities, construction approvals from Setena to the lack of water and electricity for development, MAIL?? $100 to send a package to the US!! Developers having to pay for roads and water and electricity trusts with zero movement from the municipalities after getting paid, POLICE..what police!!! Ambulance services…SORRY WE HAVE NO GAS!!!
    The list goes on and on.. ALL these areas are PROBLEMATIC!!!! So wake up people, if the country is developing and the Government cannot keep up, do you think Costa Rica has a chance? Lets bring in some companies to improve all of this, lets have the customer service. ICE worried about losing jobs??? Who do you think Sprint or AT&T are going to hire when they open up shop?? What do you think General Motors will do for labor when an assembly plant may go into production..???MMMM maybe this will help will help getting people out of poverty and perhaps make a MIDDLE CLASS.

  • Violeta Duarte

    Despite the Cafta or Tlc passed due to all propaganda and milllion of
    dollars spent by the Big corpotations, still the persecusion against the people who was against this treaty, you can read it everyday in the newspapers, is time to let it go, and try to put things together ,no more persecusion to the people who were against this bad treaaty. and the end who lost was the costarican people, the history will let us know soon.

  • 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?

  • Jay W.

    I’ll answer your direct question briefly; it is what the signatory countries have to comply with in order to gain such ‘access’ to the consumerist markets… and the nations you site have little in the way of social and development achievements, unlike Costa Rica. as a Canadian, I witnessed the continual bullying by US Corporate interests all the way up to Congressional levels where they literally robbed Billions of dollars (illegally according to the international courts) from Canada in softwood lumber disputes.. they have big sticks and they never walk softly… what do you think would happen to disputes with piddly little countries which don’t have leverage or a standing army?? Free trade MIGHT be a good idea, IF it were truly free, but giving up your sovereignty for some vague idea of improved trade (especially for a sending market smaller than Groton Connecticut) is foolhardy to the extreme.. wait and see..

  • Rodrigo

    Claro, que ahora con la donación del Gobierno chino en Costa Rica de un estadio nuevo, se hace más fácil concebir un resultado positivo. Sin embargo, es preocupante la actitud nueva de las autoridades ante el trabajo sobre esta donación. Ya lo reportaron en el Noticiero y salió en las noticias de Costa Rica que esto puede entrabar las negociaciones del TLC

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