San José, Costa Rica, since 1956

Arias Explains Dilemma at Free-Trade Summit

President Oscar Arias attended a forum in New York City on free trade this week with U.S. President George W. Bush, weeks after a Costa Rican Supreme Court decision threatened Costa Rica’s entry into the Central American Free-Trade Agreement with the United States (CAFTA).

The White House convened the meeting for leaders from 11 countries in the Western Hemisphere that either have a free-trade agreement with the United States or are in the process of entering one.

In a joint statement, the leaders agreed to promote “trade liberalization and open markets” in the region and “exchange best practices on labor and environmental standards.”

Arias told his counterparts that Costa Rica’s pickle is that the country signed CAFTA in May 2004 and approved the pact in a referendum last October. But Costa Rica will miss its Oct. 1 deadline for entering CAFTA because the Supreme Court has questioned a bill required to put Costa Rica in compliance with the pact. Lawmakers must now amend the bill and pass it again in a process that could take between six weeks and three months.

The Foreign Trade Ministry (COMEX) is now negotiating an extension with the U.S. Trade Representative (USTR) and trade offices in other CAFTA countries, said COMEX spokeswoman Emma Lizano.

In a joint statement, the forum’s guests said, “We applaud Costa Rica’s effort to complete the steps necessary for entry into force of (CAFTA) … as soon as possible.”

Of the countries represented at the forum, only four – Costa Rica, Panama, Colombia and Peru – have not yet entered their free-trade agreements with the United States. The U.S. Congress has not approved separate treaties with Colombia and Panama, and at the forum Bush urged lawmakers to get cracking.

Presidents and representatives from Guatemala, Honduras, El Salvador, Mexico, Chile, Canada and the Dominican Republic also attended the forum. Nicaraguan President Daniel Ortega, whose relationship with the United States has deteriorated in recent months, was the only CAFTA president who did not attend.

Costa Rica is the only CAFTA signatory that has not yet entered the treaty, perhaps the most polarizing issue in recent history here. Faced with strong opposition in the National Assembly, Arias had to ask for an extension of the initial Feb. 29 deadline for passing 13 laws required to enter the pact.

Just as lawmakers were about to approve the 13th bill, the Constitutional Chamber of the Supreme Court (Sala IV) said they had acted unconstitutionally by failing to consult indigenous groups on a clause that affects them.

A congressional committee this week recommended that lawmakers delete the problematic clause and pass the bill again.

In a series of meetings scheduled before the Supreme Court ruling, COMEX officials reviewed the 13 bills with their USTR counterparts this week to make sure the legislation fills CAFTA’s requirements.

U.S. Secretary of Commerce Carlos Gutiérrez will visit Costa Rica next week with about 15 U.S. business leaders to explore trade opportunities with Costa Rica under CAFTA.


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