San José, Costa Rica, since 1956

Costa Rica Beats Own Drum in Central America

SAN PEDRO SULA, Honduras – Costa Rican President Oscar Arias’ absence from last week’s presidential summit of the Central American Integration System (SICA) should not be misinterpreted as Costa Rica’s lack of interest in regional integration, according to his foreign trade minister.

Marco Vinicio Ruiz, who represented his government in SICA’s 33rd presidential summit last week, said that Arias couldn’t make the summit because he had previous plans to go to Qatar and Singapore, with which Costa Rica hopes to start negotiating a free-trade agreement next year.

But he said not to read anything into Arias’ absence because “normally there’s always someone who can’t make it to a summit,” and that Central American presidents tend to hold summits more than most.

Still, Arias’ no-show does seem to reflect Costa Rica’s tendency to approach integration on its own terms and time schedule.

Costa Rica has not been the most eager partner in the Central American integration process, and has only really shown interest recently as it pertains to the negotiation of an association agreement with the European Union.

Costa Rica has declined to join the Central American Court of Justice, and has refused to integrate politically as a member of the Central American Parliament or the CA-4 initiative, which allows Guatemalans, Salvadorans, Hondurans and Nicaraguans to travel freely among those countries without passport or visa.

Costa Rica has also been the slowest to integrate economically, becoming the last country in the region to enter the Central American Free-Trade Agreement with the United States and the Dominican Republic (CAFTA). In some ways, even the Dominican Republic has integrated faster into Central America than Costa Rica has.

Some speculated that Arias’ absence from last week’s summit also had to do with the fact that Taiwan is a major SICA benefactor, and that participating in the event would somehow imply recognizing Taiwan’s role in Central America. Costa Rica cut ties with Taiwan last year to forge relations with China.

Three-Region Approach

Despite Costa Rica’s reluctance toward full integration, the forthcoming Central American Association Agreement with the EU, which requires Central America to negotiate as a bloc with Europe, has become an impetus for Costa Rica to get on board, at least partially.

Costa Rica, which will finally become a partner in CAFTA by January, has also joined the initiative to form a common Central American Customs Union, which Ruiz claims is 94 percent completed.

“We have advanced a lot on the customs union, but we think things need to advance faster,” he said. “If there is a priority at the moment, it is to ensure the health of our small and medium-sized businesses.

The Central American market is one of the sources most important for our small and medium-sized producers. If we find ways to increase intraregional trade growth, we need to do it to make trade grow even more.”

Costa Rica has also shown some limited interest in relations with South America.

Ruiz said that Costa Rica hopes to formalize its membership in Venezuela’s PetroCaribe discount oil initiative by the end of the year, though he said Costa Rica’s relationship with Venezuela – which provides 80 to 90 percent of the country’s oil – is one that predates and transcends the leftist politics of Venezuelan President Hugo Chávez.

Yet even Arias, once fiercely critical of Chávez, has softened his approach toward the Venezuelan leader in recent months, even applauding him on occasion.

“It’s not just one strategy we have, rather one of diversification that allows us to attend to the three principal areas of the world – Europe, North America and Asia,” Ruiz told The Tico Times. “South America is the next step, but first they need to resolve some of their international initiatives. The situation there is a bit confusing right now.”

Integration specialist Rony Abiú, of the Central American Support Program for Regional Integration (PAIRCA), said Costa Rica has always supported Central American integration, but has its own “particular way of analyzing the issue of participation.

“I think there is a unique vision in Costa Rica, but other Central American governments have their own visions, too,” Abiú said. “Overall, Central American countries are realizing they have to support integration because by acting alone, they will have fewer possibilities in the world. We are seeing this in the negotiation process with the EU.”

Blazing a Path to Asia

Though Costa Rica’s economic strategy is to diversify relations globally, it is clear the country is currently most enthusiastic about its pursuit of new partnerships with Asia, specifically Singapore and China, which is already Costa Rica’s No. 2 business partner, according to Ruiz.

The trade minister said that Costa Rica’s strategy is different from its neighbors in that its top export is now microprocessors and computer chips, so it needs to partner with countries that have “high technological content,” which is part of the motivation for seeking new markets in Asia.

“We had the opportunity and we took the position as a country to establish diplomatic relations with China, and we are going to initiate a free-trade treaty because we consider that it is an important strategic alliance,” Ruiz said, adding that Asia will play a key role in Costa Rica’s economic strategy for the next 10 to 15 years.

The trade minister denies that Costa Rica is leaving the rest of Central America behind in its solo venture to Asia. On the contrary, he said, Costa Rica could become Central America’s ride to the dance.

“I don’t see any problem if other Central American countries want to join” the forthcoming trade talks with Singapore, Ruiz said. And Costa Rica’s entrance into China could serve as a beachhead for the rest of the region, much as Central America has become a platform for Asian countries to export to the United States under CAFTA.

“There are a lot of Central American companies that operate in Costa Rica,” Ruiz said, implying they, too, will benefit from trade with China.

Ruiz compares Costa Rica’s planned freetrade agreement with China to the amplification of the Panama Canal – a project that should benefit everyone on the neighborhood.

“The important thing is to have dynamic economies in the region to help pull along the other economies,” Ruiz said. “That’s the idea here.”


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