A Donald Trump presidency in the United States likely will be bad news for Costa Rica.
Trump has made his opposition to trade treaties a centerpiece of his campaign. And as the owner of casinos he certainly is not a foe to gambling as have been other U.S. administrations.
That might be good news to Costa Ricans who opposed the Central American Free Trade Treaty. A little known fact is that this really is not a treaty. Under the U.S. Constitution, a treaty needs approval from two-thirds of the U.S. Senate.
The so-called CAFTA agreement is really what is known as a congressional-executive agreement that has the strength of law.
Both the U.S. Senate and the U.S. House approved CAFTA by a very narrow margin, and it basically is just another law and not a treaty. That means the deal can easily be changed or revoked by a president and the majority of both houses of Congress.
Costa Rican President Luis Guillermo Solís might not be unhappy if that happens. He is on record of opposing the free trade agreement before and after he was elected.
U.S. officials generally tout the benefits of the trade treaty for Costa Rica, but there are plenty of critics, too. Subsidized farmers here fear U.S. imports. The treaty has done little for the average U.S. expat. Requirements to protect investors have not helped those who have had their land invaded or stolen. Major complaints are being adjudicated by the arbitration arm of the World Bank and not under CAFTA.
And curiously, U.S. officials did not seek to eliminate the massive import tax Costa Rica puts on motor vehicles. That would seem to be a big point for U.S. exports, but officials here said they considered the tax at the dock to be a local matter.
Those who favor trade see Trump and the Democratic challenger Bernie Sanders as delusional. That was the characterization in April by writers Will Marshall and Ed Gerwin in a publication called America’s Trade Policy. They said:
“In this campaign season of populist anger
and demagoguery, bad ideas are bubbling to the surface like marsh gas. Among the worst is protectionism, which would wreak havoc on a U.S. economy that’s finally picking up steam.
Trump sees his goal as halting the flow of jobs from the United States to overseas locations. Costa Rica has benefited from many call center jobs, although it is hard to see how a president can prevent a company from setting up overseas when the product is not being imported to the United States.
Gambling is another matter. The U.S. government has been on the attack against offshore gambling operations for years but jumpstarting the industry in the United States would have many benefits.
The United States would have a windfall in taxes and more jobs. Gamblers would have a degree of safety not found overseas. U.S.-licensed and operated online casinos would have a marketing advantage.
Costa Rica, after all, has not exploited the presence here of gambling houses for fear of losing them or for other reasons.