San José, Costa Rica, since 1956

The Notables’ CAFTA Report: A Closer Look

FOR Costa Rica to successfully face the challenges that the Central American Free-Trade Agreement with the United States (CAFTA) will bring if ratified, the country must undergo fundamental changes in the way it conducts politics; taxes its citizens and distributes wealth; educates its young people; and supports its farmers, workers and entrepreneurs. If it does not, CAFTA will most likely benefit only a small sector of Costa Ricans, and the gap between the rich and the poor will broaden.Or so concludes the final report handed over to President Abel Pacheco Sept. 16 by the Council of Notables. The five Costa Rican men who make up the Council were hand-selected by Pacheco to study the free-trade agreement and give a thorough analysis of its possible implications for the country’s development.While emphasizing that they have not made a recommendation as to whether Costa Rica should approve or reject CAFTA, the council members argue that with or without the trade agreement, Costa Rica will not be the same after CAFTA takes effect Jan. 1, 2006 between the United States and the other countries that ratified it.THOUGH some characterized Pacheco’s naming of a council to examine the document as a delay tactic, since he said he would not consider submitting CAFTA to the Legislative Assembly for possible ratification until after the council finished its analysis, the report is being hailed by many from both sides of the debate as an important and valuable document.“It’s been many years since such a balanced and profound document has been produced about the real dilemmas that the country must resolve in order to defeat poverty, combat inequality and reencounter the lost path towards human-centered development,” wrote journalist Armando Vargas in an editorial for the business-oriented daily newspaper La República.In the text of the document, the council members lay out the agreement “in a more approachable outline and language,” first breaking down the structure of the pact in terms if its chapters and annexes, and then going through the major themes that have arisen in the national debate over CAFTA, such as telecommunications, agriculture and employment, among others.THE council’s analysis dispels many of the points raised by anti-CAFTA protesters, such as that Costa Rica is bound to the agreement forever with no means of escape (according to the report, Costa Rica can terminate its participation in CAFTA at any time, given six months’ notice), or that the agreement can be renegotiated (renegotiation of particular points in the agreement could only have been done before one of the two parties ratified it, the council reported).However, the report does support the primary argument of the social movements, which is that CAFTA would benefit only a small sector of Costa Rican businesses, though the council members say that with structural changes, that effect could be eliminated.“It is evident that if there is an increase in exports because of the agreement, maintaining current conditions, the principal sector benefitted would be a few export companies,” the report says, pointing out that in 2003, 96% of Costa Rica’s micro, small and medium businesses produced goods for internal consumption, and only 2.3% of all businesses in the country were export businesses.“THERE is still much to be done so that the benefits obtained in the export sector reach the rest of the Costa Rican population,” the report states.If the necessary measures aren’t taken to help the agricultural sector and other vulnerable sectors adapt to the changes CAFTA would bring, the final tally could be a loss in jobs, according to the council.It goes on to warn of possible negative effects for Costa Rica in the areas of telecommunications, medicine and insurance, unless measures are taken to specifically address these issues.These measures, the council members say, should be contained in the Complementary Agenda – a package of bills and loans currently in the Legislative Assembly that is intended to strengthen Costa Rica in the face of CAFTA (TT, June 24). The report says that the government must go beyond what is contained in the current legislative agenda, a point with which Trade Minister Manuel González agreed when speaking to The Tico Times last week (TT, Sept. 23).PRESIDENT Abel Pacheco announced at the press conference following his weekly Cabinet meeting that he is taking the council’s suggestions into account, and that the Complementary Agenda consists of much more the international loans now under consideration in the assembly. He added that his administration has already taken a variety of steps to prepare the country for the trade agreement.“CAFTA does not automatically implicate a decrease in poverty or an increase in employment,” the report states in its conclusion. “It all depends on Costa Rica’s ability, will and commitment to implement profound changes in its political, social, commercial, legal and administrative structures, in modernizing its infrastructure, making more efficient the decision-making process and visualizing the future in the long term.”

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