San José, Costa Rica, since 1956

Opposition Pushes for New U.S. Trade Deal

WASHINGTON, D.C. – Costa Rica and the United States should negotiate a “new generation” free-trade agreement in “three or four years,” according to Ottón Solís, leader of the Citizen Action Party (PAC) and runner-up in last year’s presidential elections.

Solís, who spent last week in the U.S. capital speaking out against the Central American Free-Trade Agreement with the United States (CAFTA) and drew criticism back home after his comments during an interview with CNN en Español, said it is no longer possible to renegotiate CAFTA, as he had vowed to do if elected president. Therefore, the best option for Costa Rica is to reject it and negotiate a better agreement in the coming years, he said.

“We want a free-trade agreement with the United States, but of a different shape [than the one that was negotiated],” Solís said Jan. 25 during an event organized by the Center for Global Development, a Washington,D.C.- based think-tank. “We hope that in three or four years it can take shape.”

In addition to trade and investment rules, the type of agreement Solís proposes would include stricter labor and environmental standards than CAFTA, now under debate in the Legislative Assembly. Traditionally, developing countries have fought to keep these issues out of trade negotiations.

Rules on preventing corruption and money laundering, ensuring the development of participatory democracy; and the protection of the rights of women and minorities would also be included in the agreement he proposes.

Such an agreement would represent a “new partnership with the United States,” Solís said. However, it could only begin to be negotiated in the future, three or four years down the road.

“I know it’s not possible [now] given what is happening in this county,” Solís told the audience gathered at the Center for Global Development, likely referring to the new balance of power in Washington.

He argued that the agreement he proposes would not be the first time the United States offered trade concessions based on values other than economic. As an example, he cited the Caribbean Basin Initiative (CBI), which since the 1980s has allowed most Central American and Caribbean products to enter the United States duty free.

“I am not inventing anything new,” he said.

The former candidate reiterated his opposition to CAFTA, stressing that the agreement in its current form, if ratified, will limit Costa Rica’s development options and that, given the country’s high levels of human development, Costa Rica should have a different trade agreement with the United States than the one its poorer neighbors have signed and ratified.

Solís accused the Arias administration and several legislative factions of acting “undemocratically” by attempting to hasten CAFTA’s approval without a proper debate. That’s the same argument the 17 Citizen Action legislators are making back in San José as the 57-legislator assembly, led by the National Liberation Party (PLN) that brought pro-CAFTA President Oscar Arias to power last year, debated whether legislative regulations allow a date to be set for a vote on CAFTA, which has already spent more than a year under debate in commission.

Arias and Solís were scheduled to meet late yesterday afternoon. No further details were available at press time.

Solís expanded on his criticisms of CAFTA and the legislative debate during an interview with CNN journalist Alberto Padilla Jan. 26, causing legislators from various parties to lash back this week.

When Padilla asked how the five-party coalition apparently poised to support CAFTA within the assembly “could be so wrong,” Solís responded that “within that coalition there are old parties with serious ethics problems in Costa Rica” – an apparent reference to the corruption allegations against former officials from the Social Christian Unity Party (PUSC) and Liberation – and “one ultra-right (party) that doesn’t reflect Costa Rica’s feelings on this matter,” most likely referring to the pro-business Libertarian Movement.

“He’s the one going to extremes, talking badly of people who don’t share his position,” Libertarian faction head Evita Arguedas told the daily Al Día this week. “The coalition is a well-regarded democratic phenomenon.”

She also urged Solís to be a bit more specific regarding what parties have “ethics problems.”

Solís’ stance on CAFTA also met with criticism in Washington. Rene León, El Salvador’s Ambassador to the United States, who also spoke at the Global Development event, called Solís’ plan a “pipe dream” and said he hopes Costa Rica will choose to join its neighbors as part of the trade pact.

León noted that under CAFTA, El Salvador’s exports have surged, recovering from a major drop in 2005. The agreement is also fueling the diversification of the country’s exports, particularly in the agribusiness, auto parts, energy and information technology sectors. Sales of ethnic products, such as Salvadoran cheeses, to Salvadoran immigrants in the United States have increased by more than 30%, approximately $500 million, since the country joined the agreement on March 1 of last year, he said.

Guatemala, Honduras and especially Nicaragua have also benefited, even though it is still too early to truly judge the agreement’s impact on the region, he said.

While he admitted CAFTA is by no means ideal, León said it is the best option for his country.

“The world is not going to wait for us,” he said. “The world is not going to stop while we wait for a better CAFTA.”

Tico Times reporter Katherine Stanley contributed to this report from San José.


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