San José, Costa Rica, since 1956

C.R. Seeks Another Break After CAFTA Setback

Laws protecting Costa Rica’s tiny and often-overlooked indigenous population have jeopardized the Central American Free-Trade Agreement with the United States (CAFTA), whose approval business and political leaders say is long overdue.

The Supreme Court has struck down a bill required for Costa Rica to join CAFTA because lawmakers did not consult the indigenous community, which represents 1.7 percent of the population, according to a 2000 census.

Costa Rica must now ask its other trading partners for an extension of its Oct. 1 deadline for entering the pact, which voters approved last October in a referendum.

Lawmakers have passed 12 of the 13 bills required to put Costa Rica in compliance with the treaty.

The last bill, intended to strengthen intellectual property rights, includes a clause that would allow for patents on indigenous innovations rooted in nature, such as traditional medicines. A 1993 United Nations accord obliges lawmakers to consult the indigenous on any bill that directly affects them.

Ruben Chacón, an adviser to the Mesa Indigena, an NGO that lobbies for indigenous rights, said the clause would convert natural resources into private property that can be exploited for commercial gain.

“Biodiversity is the famous oil of the 21st century,” he said.

After meeting with Foreign Trade (COMEX) Minister Marco Vinicio Ruiz late Wednesday, pro-CAFTA lawmakers said they would likely delete the problematic clause before approving the bill again.

The alternative would be to consult leaders in 24 indigenous territories in a process that could take a month, said lawmaker José Manuel Echandi from the National Union Party (PUN).

Either way, the Arias administration will ask for more time from other CAFTA countries – the United States, Guatemala, Honduras, El Salvador, Nicaragua and the Dominican Republic. Vice President Laura Chinchilla said she was confident the trading partners would grant the favor.

“In the last few minutes of the game, we have been dealt a yellow card. We don’t think it’s a red card,” she said.

Chinchilla and Vice Minister of Foreign Trade Amparo Pacheco met with Peter Brennan, deputy chief of mission at the U.S. Embassy, last Friday to discuss the problem.

The embassy then briefed the U.S. trade representative (USTR) in Washington, D.C.

“We are confident we will be able to continue to work with the Costa Rican government toward our shared goal of implementing the CAFTA,” Gretchen Hamel, a USTR spokeswoman, said. “USTR will carefully consider any request for an extension.”

President Oscar Arias will likely discuss the extension in a meeting with President George W. Bush and other CAFTA country leaders Wednesday in New York City, said Casa Presidencial spokeswoman Vanessa Calderón. Bush’s schedule has not yet been released, according to a Bush spokesman.

The U.S. and other CAFTA countries have already given Costa Rica a seven-month extension of the initial Feb. 29 deadline for entering the treaty. David Gantz, a trade expert at Rogers College of Law at the University of Arizona, said the outlook for a second extension was good.

“I imagine everyone will end up grumbling a bit, but they’ll give (Arias) some flak,” he said.

Business leaders, especially textile exporters, are grumbling too. CAFTA would not immediately change ground rules for many Costa Rican exporters: Most goods already enter the United States tariff-free under the Caribbean Basin Initiative and the Caribbean Basin Trade and Partnership Act , a unilateral benefit granted by the U.S. Congress.

But U.S. lawmakers, looking to protect the U.S. textile industry, have imposed tougher rules on textile imports. To enter the United States tariff-free under CBTPA, textiles must be made with material and thread from the United States. CAFTA would remove tariffs on textiles made with material and thread from any CAFTA country.

“Costa Rica’s textile companies need CAFTA to enter into effect to be competitive,” said Rodolfo Molina, president of the Costa Rican Textile Chamber.


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