San José, Costa Rica, since 1956

Costa Rica Lags Behind, Regional Integration Advances

Nine years of negotiations for a CentralAmerican Customs Union are finally bearingfruit – at least for Costa Rica’s neighbors.With Honduras and Nicaragua poised to joinGuatemala and El Salvador next month in eliminatingimmigration and customs red tape between theircountries, Costa Rica appears to be lagging behindbecause of disagreement over tariffs on a few keyproducts and unwillingness to eliminate immigrationrestrictions.Although trade officials here say customs negotiationsare nearing completion, immigration authorities maintainthat measures such as a common Central American passport,which the other countries plan to discuss at a summitFeb. 1, are simply not in the cards for Costa Rica.“THE immigration situation in Costa Rica is different,more than anything because we receive a large number ofimmigrants, especially from Nicaragua,” Immigrationspokeswoman Heidi Bonilla told The Tico Times thisweek. She said this is one of the reasons the country willnot eliminate its border stations anytime soon.Some leaders in other Central American countries have criticized this stance, accusing theCosta Rican government of impeding integrationefforts. In 2004, Mario Facussé,president of the Central AmericanParliament (PARLACEN), said “anti-integrationist”Costa Rica is overly concernedwith maintaining its image as “theSwitzerland of Central America” andwants to avoid being linked to its neighbors(TT, July 2, 2004).However, Costa Rica’s major objectionsin the area of immigration representonly one of the many facets of the integrationmovement.The Central American IntegrationSystem (SICA), founded in 1991, has 56thematic offices in various countries focusingon issues from tourism to natural disasters,according to spokeswoman GladisArgumedo.Alicia Martín, an advisor toNicaragua’s Ministry of Industry andCommerce, told the Nicaraguan daily LaPrensa this month that each country has adifferent vision of the integration process,with some, such as Nicaragua, Hondurasand Guatemala, pushing for the total integration,and others viewing the processsolely as an effort to streamline trade.Officials here maintain Costa Rica isfully committed to the latter.ACCORDING to Trade MinisterManuel González, work is movingsteadily ahead to resolve the tariff differencesthat separate Costa Rica from theother countries.González told The Tico Times lastweek that negotiations on tariffs for 94%of products have been completed.“I’ll be honest. The 6% that remain arethe most difficult,” he said.Francisco Gamboa, economic advisorto the Costa Rican Chamber ofCommerce, said the products still undernegotiation include meats and grains suchas rice and corn.Corn, he added, provides an excellentexample of why the participating countries’varying agricultural and manufacturingprofiles make reaching region-wideconsensus on all products “an important…and difficult task.” Taxes on the grain arehigh in Guatemala, where it is widely produced,but low in Costa Rica where corn isnot grown commercially, he said.Still, Gamboa and González bothexpressed confidence the customs negotiationswould come to a successful conclusion,although neither would specify a date.GONZÁLEZ’S remarks followed theannouncement by Guatemalan PresidentOscar Berger that Honduras andNicaragua will be incorporated into theexisting union between El Salvador andGuatemala next month.Nicaragua and Honduras “will be eliminatingthe bureaucratic processes ofimmigration and customs… they are completelyprepared,” Berger said Jan. 17 duringa meeting of the Guatemalan-AmericanChamber of Commerce (AmCham).He added that Costa Rica “moves aheadat its own pace,” but expressed optimismthat “in the short term the five countries ofthe region will be completely integrated.”Honduran President Ricardo Maduro,president pro temp of the integration system,has reactivated proposals such asCentral American passports and region-widecapture orders, as well as an “openskies” initiative that would allow commercialflights between Central Americancountries to be considered domestic.These are among the issues that will bediscussed at a summit of regionalPresidents next Tuesday in Honduras,Maduro announced this week.ANOTHER issue being negotiated isthe elimination of border stations betweenthe countries. El Salvador and Guatemalahave already taken this step. An old customsbooth was symbolically destroyed onNov. 15, 2004, to mark the free passage ofpeople and merchandise between the twocountries (TT, Nov. 19, 2004).However, González said Costa Ricawill not follow suit in the near future.“The border is very difficult,” he said.“We don’t see it (being eliminated) in theshort or longer term.”Immigration spokeswoman Bonilla saidauthorities here are studying the possibilityof reducing or eliminating requirements, butconfirmed that no changes are in sight.“Travel will be possible freely betweenGuatemala, El Salvador, Honduras andNicaragua, but those entering Costa Ricawill need to go through the entry requirements,’’she said.González added Costa Rican authoritiesare working to make border crossings easier,although their hands are tied by budgetaryrestrictions. The Foreign Trade Ministry hasdeveloped plans to increase hours at theNicaraguan border at Peñas Blancas from 12hours per day to 18 hours, but has not beenable to hire the extra personnel needed forsuch a change because the Finance Ministrywould not grant the extra funds.CENTRAL American countries havebeen discussing regional integration formore than 40 years, but civil wars disruptedthe process in the 1980s.“The other four countries (Guatemala,El Salvador, Honduras and Nicaragua)began the process again in the mid-1990s,and Costa Rica decided to resume attemptingto incorporate itself into a union at theend of that decade,” Gamboa said.Gamboa admitted the negotiations fora customs union are difficult and complex,since they require all five countries toagree on not only tariffs for products, buton product quality standards and customsrequirements.However, “it is a positive process,” hesaid. “Not only would (a customs union)increase the volume of trade within theregion, but it makes all the countries enterinto a process of reviewing and improvingtheir regulations for imports from outsidethe region,” he said.He downplayed the possibility thatCosta Rica would be left out of such benefits,saying that while some of the goals for2004 were not reached because of lack oftime, “the work is at a very advanced stage.”

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