San José, Costa Rica, since 1956

Nation Looks Ahead To CAFTA Deadlines

IT’S official: U.S. President George W. Bush signedthe Central American Free-Trade Agreement with theUnited States (CAFTA) into law on Tuesday, meaningthat the agreement will take effect between the UnitedStates and El Salvador, Guatemala and Honduras – theonly countries to have approved it so far – on a date officialsfrom those countries will set later this month.Costa Rica, Nicaragua and the Dominican Republic allhave yet to pass the agreement in their legislatures.In Costa Rica, supporters of the controversial tradepact appear to have found a new ally in LegislativeAssembly President Gerardo González. He said thisweek that he is ready and willing to circumvent PresidentAbel Pacheco, who has yet to send the agreementto the assembly, and begin discussing the agreement without Pacheco’s go-ahead.The idea appears to have the support ofmany legislators, but its constitutionalityhas yet to be determined. According toFranklin Carvajal, advisor to González,legislators are studying the proposal.Libertarian Party legislators attempteda similar coup in February of this year,but were unsuccessful (TT, Feb. 11). Thelegislators tried to introduce the agreementwhen the Legislative Assembly wasin one of its so-called extraordinary sessions,during which the ExecutiveBranch, not assembly leaders, sets the legislativeagenda. Another extraordinary sessionis now underway. Carvajal saidGonzález is considering beginning thediscussion of CAFTA in September,when the next ordinary session begins.PACHECO has conditioned sendingCAFTA to the Legislative Assembly on itsanalysis by a “Council of Notables,” whichis set to present its report in September,and the passage of a tax reform bill.In another attempt this week to expeditethe ratification process, lawyer JoséEduardo Vargas has filed a request with theConstitutional Chamber of the SupremeCourt (Sala IV) for an injunction forcingPacheco to send the trade agreement to theassembly, according to the daily LaRepública. The lawyer said that delayingthe ratification of the free-trade agreementis a violation of due process and the humanrights of Costa Ricans.Sala IV justices are studying therequest.WHILE legislators previously saidthey could require as many as nine monthsto analyze and vote on CAFTA once theyreceive it, Rolando Laclé of the SocialChristian Unity Party (PUSC) told TheTico Times this week that two months maybe enough.Laclé, who supports CAFTA, is thepresident of the Commission ofInternational Affairs, which would beresponsible for studying the agreement if itis submitted.“I believe it is important to give ampletime to hear the opinions for and against (theagreement),” Laclé said. “The worst wecould do would be to approve it withouthearing people’s opinions.”If CAFTA is approved in the assembly,which Laclé says is the likely outcome, itwould not take effect until 90 days afterCosta Rica officially notifies the Organization of American States (OAS) ofthe agreement’s ratification. The assemblywould therefore need to approve it by Nov.1 to be a part of the agreement when it firsttakes effect Jan. 1, 2006.IF the agreement is ratified, however,Costa Rica will face a new set of deadlines.To be in compliance with the agreement,the country must open its telecommunicationsand insurance markets to competition.Both are currently run by state-ownedmonopolies.The laws to open these two monopolies,especially telecommunications, areamong the most controversial aspects ofthe agreement. Union leaders for workersat the Costa Rican Electricity Institute(ICE), which oversees telecommunications,and the National Insurance Institute(INS) have said that the change will costthe country a significant number of jobs.This has also been one of the top complaintsraised by protesters who have takento the streets time and time again.However, if Costa Rica does not passthese laws but does approve CAFTA, itcould find itself in the position of immediatelybeing in non-compliance with theagreement, former Foreign Trade MinisterAlberto Trejos told The Tico Times.For the opening of the telecommunicationsmarket, Costa Rica has until the endof 2006 to get the proper laws in place. Forthe opening of the insurance market, CostaRica must begin to allow other companiesto offer policies after Jan. 1, 2008. Thegovernment has until Jan. 1, 2011 to allowcompetition for mandatory policies.SINCE CAFTA’s passage in the U.S.House of Representatives on July 27, bothsupporters and critics of the treaty havestepped up pressure on the Pacheco administration(TT, July 29).Supporters of the agreement say thatevery day that Costa Rica is not a part ofthe agreement, the country risks losinginvestment opportunities; they continue tourge Pacheco to send the treaty to theLegislative Assembly for discussion.Pacheco, however, seems to be unmoved.“No investments are being lost. I havelots of requests from businesses to comehere,” he told reporters Monday. “I canassure you that with me, pressure doesn’twork. I will send CAFTA when I think thatit is right and good for Costa Rica.”Disagreements over the handling ofCAFTA have led to several resignationsin the Pacheco administration, includingthat of former Foreign Trade MinisterTrejos and most of the team that negotiatedCAFTA (TT, Jan. 21). On Wednesday,it was announced that Foreign TradeVice-Minister Amparo Pacheco had beenfired for “disloyalty,” although MinisterManuel González was reluctant to providefurther details about the reasons forher dismissal. She is the eighth high-leveltrade officials to resign or be fired inapproximately 1.5 years.CAFTA’s Past and FutureJan. 27, 2003: First round of trade talks between the United States and Central American countriesbegin.Dec. 18, 2003: Trade talks between the United States and the Central American countries conclude,with the exception of Costa Rica, which demands, and gets, an extra round of negotiations inJanuary.Jan. 25, 2004: Costa Rica concludes trade talks with the United States.May 28, 2004: The United States, Guatemala, Honduras, El Salvador, Nicaragua and CostaRica sign the agreement.Aug. 5, 2004: The Dominican Republic signs on to the agreement, now officially titled theDominican Republic-Central America-United States Free Trade Agreement (DR-CAFTA).Dec. 17, 2004: El Salvador’s legislature approves CAFTA 49-34.Mar. 3, 2005: Honduras’s legislature ratifies the agreement with the approval of 123 of 129 legislators.Mar. 10, 2005: Guatemala’s legislature approves CAFTA 126-12.June 30, 2005: The agreement is passed in the U.S. Senate, 54-45.July 17, 2005: Costa Rican President Abel Pacheco convenes a Council of Notables to studythe agreement. The council is required to submit an opinion on the agreement to the President within60 days.July 27, 2005: The agreement is approved in the U.S. House of Representatives. The officiallyrecorded vote is 217-215, although one member says his vote against the agreement wasn’trecorded.Aug. 1, 2005: U.S. President Bush signs CAFTA into law.If Costa Rica ratifies CAFTA:Dec. 31, 2006: Costa Rica must open its telecommunications market to private competition bythis date.Jan. 1, 2008: Costa Rica, if a part of CAFTA, must begin to open its insurance market to competition.Jan. 1, 2011: Costa Rica must have opened its mandatory insurance policies to competition.

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