Commentary | Trade and Globalization

No cheers for CAFTA


No Cheers For CAFTA

by Ottón Solís

October 19, 2007

The Wall Street Journal may say “Bravo, Costa Rica” on its Opinion page October 9, but almost half of the people who voted in the Central American Free Trade Agreement referendum October 7 are not celebrating.

We are proud that our health and environmental policies are, by far, the best in the region, that our democracy is founded on an extensive system of family farming, that our telecommunications services are lower priced and more efficient than those of our neighbors, that we abolished all military forces 60 years ago, and that our laws forbid the trade and production of weapons and their parts. All these sources of national pride are threatened by CAFTA. That is why we tried to stop it through a popular referendum.

The fundamental problem is that, on many issues, CAFTA would give multinational corporations more power than our government. For instance, if a corporation thought that a new environmental regulation or a democratically decided performance requirement interfered with the company’s interests, it could sue Costa Rica in a court located outside our territory, regardless of where the corporation registers its operations.

We supply health care and medicines to those who need them, not just those who can afford them. But since CAFTA’s intellectual property protections exceed U.S. patent law and the regulations of the World Trade Organization, CAFTA will reduce access to generic drugs and thereby increase the price of medicines.

It seems contradictory that even though the Bush administration is even willing to wage war over weapons proliferation, it promotes an agreement that liberalizes trade and manufacturing of all kinds of weapons and parts, including nuclear.

CAFTA is very good for multinational corporations and a very small elite of Central Americans. Elsewhere in the region these elites managed to get CAFTA ratified after one or two sessions of their parliaments. But Costa Rica has a much more sophisticated democracy. We tend to reject both the grotesque wealth concentration prevailing in the other Central American countries and also the populism that has taken hold in some South American countries. Opposition to CAFTA had nothing to do with Hugo Chavez or Fidel Castro, whom most of us disagree with. In Costa Rica there is practically no anti-U.S. feeling. There are more Americans living in Costa Rica than Costa Ricans living in the United States.

During the referendum campaign, the “yes” side spent millions of private dollars and unlimited government resources. We countered with not a penny, just the deep conviction that CAFTA is wrong for Costa Rica. Even so, the final tally shows a slim difference of three percentage points. For all these reasons you would do well to look closer at the CAFTA process in Costa Rica.

Please do not misunderstand: We are not, in any way, opposed to trade with the United States or any other democratic country. But we know that 13 years of NAFTA have increased poverty in Mexico to such an extent that the United States is now building a wall to keep impoverished Mexicans from crossing the border.

As voting day approached, the White House even went so far as to interfere in our internal affairs, weighing in with statements that echoed false threats that the “yes” side had been spreading. Public statements from the administration warned that Costa Rica could lose its trade preferences under the Caribbean Basin Initiative if we voted “no”  — even though the CBI is a permanent agreement. While the Bush administration sought to spread fear, Senate Majority Leader Harry Reid, House Speaker Nancy Pelosi and other key Democrats in the Senate and House brought hope to the Costa Ricans throughout our long national debate over CAFTA.

In their efforts to set the record start on Costa Rica’s status under the CBI, they reached the hearts of thousands of Costa Ricans who rediscovered an image of the United States that has seemed lost during the last years. Regardless of the outcome of the referendum, this new understanding is an important outgrowth of their visits for both countries. I am sorry that pundits who support CAFTA do not value or even acknowledge it.

Ottón Solís is head of the Costa Rican Citizen’s Action Party and a former presidential candidate.


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