CAFTA pact at five years, an unspoken election issue

Costa Rica’s trade treaty with the United States and other Central American countries has wrought great changes here.

The commerce ministry arranged a seminar Monday to promote the treaty and its impact. That summary was the essence. Not all of the politicians running for president agree, and depending on the vote Feb. 2, the trade treaty known as CAFTA-DR might be in jeopardy.

A major speaker Monday was Carlos Felipe Jaramillo, a World Bank economics expert who helped lay the groundwork for the original treaty. The agreement split the nation and only won approval by just 48,844 votes in a national referendum.That was less than 3 percent of those voting after a bitter campaign.

The treaty was not really about trade. Costa Rica accidentally became a philosophical battleground between those who support capitalistic world commerce typified by the United States, and those who seek a socialistic course, typified by Cuba’s Fidel Castro, Nicaragua’s Daniel Ortega and Venezuela’s late Hugo Chávez.

The seminar Monday marked five years that the treaty has been in force and was the forum for a summary of results.

The approval of the treaty and laws that implement it were engineered by then-president Oscar Arias Sánchez and his associates.

In the current presidential campaign, the treaty is like the elephant in the room that no one wishes to mention. Luis Guillermo Solís Rivera, an academic and economist, opposed the treaty, as did his political party. He is the candidate for the Partido Acción Ciudadana. José María Villalta Florez-Estrada, the candidate of the leftist Frente Amplio, has not done so but has an opportunity to exploit popular economic concerns directing their unhappiness toward CAFTA-DR. He was a surprising second in a recent newspaper poll. Front runner Johnny Araya presumably knows enough not to mention the treaty. To do so is a guaranteed loss of at least 20 percent of the votes.

José Miguel Corrales, presidential candidate of the new Partido Patria Nueva, was a chief architect of the battle against ratification of the CAFTA treaty.
While officials from the Ministerio de Comercio Exterior were discussing the five years of CAFTA-DR Monday, thousands of Costa Ricans were on the street marching for various economic reasons. They will be hard to convince that the benefits of CAFTA have filtered down to them.

In addition, there are several threats of international arbitration under CAFTA provisions. This type of action is alien to many Costa Ricans.

Jaramillo at the seminar noted that the treaty caused a number of legal reforms in Costa Rica. One of these was opening the way for foreign investors from other CAFTA countries to challenge Costa Rican decisions in a World Bank arbitration case.

The Ministerio de Comerico noted Monday that the treaty has reformed the country. There is an increase in exports, there is more investment from outside the country and the telecom and insurance markets have been opened to private companies.

Anabel González, the commerce minister, cited the explosion of mobile telephone services under the opening of the market to private firms that CAFTA provided. No one can deny that the presence of private firms has caused the former state monopoly, the Instituto Costarricense de Electricidad, to improve greatly its customer service. Ministry figures say there are more cell phones in the country now than people.

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