Daily Edition: San José, Costa Rica, October 20,  2003

Airport Concession Annulment Sought
Congressman Luis Ramírez of the opposition National Liberation Party announced last Friday that he is going to ask the Legislative Assembly to annul the 20-year airport management concession granted three years ago to Alterra Partners.
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Condor Airlines Offers New Direct Flight from Berlin
Condor Airlines, a subsidiary of Lufthansa German Airlines, announced last week that it is inaugurating a new weekly direct flight from Berlin to San José. The inaugural flight will arrive here Nov. 3.
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October 20

Mommy and Me Classes
Classes for parents who like to stimulate their children's abilities. Bring your kids and encourage them to learn something about mathematics with the class "From First Numbers to Advance Calculations," from 3-5 p.m. at La Tortuga Sabia in Guachipelín, Escazú. Info: 288-8926.

Trova Concert
Enjoy some Trova music with your friends, starting at 8 p.m. at El Semáforo Theater, 80 m. west of Liceo Vargas Calvo in San Pedro. Info: 253-9126.

Learn and Share Quilting
Learn the art of quilting and donate your first project to the National Children's Hospital in exchange for instruction. Classes are in Sabanilla. Call 225-7879 for schedules.

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Eighth Round of CAFTA
Negotiations Begins Today
By Fabián Borges
fborges@ticotimes.net

The eighth of nine rounds of negotiations for a free-trade agreement between Central America and the United States (CAFTA) began today in Houston, Texas.

Later in the week, Costa Rican negotiators will meet in private with their U.S. counterparts to discuss proposals regarding the partial opening of certain sectors country's telecommunications market.

"CAFTA negotiations are entering the home stretch. The Houston meeting will be very important in defining the treaty's outcome," head Costa Rican negotiator Anabel González said on Thursday. "We have a lot of work ahead of us. We still have many issues to resolve. We plan to finalize as many chapters as possible during this round."

After seven rounds and 10 months of negotiations, only three of the treaty's 21 chapters have been concluded (electronic commerce, trade facilitation through customs modernization and general safeguard measures). Negotiators will need to pick up the pace during this round to be able to conclude negotiations by the mid-December deadline.

According to González, seven chapters require only minor adjustments and likely will be concluded in Houston (technical barriers to trade, animal and plant safety requirements, transparency, trade in services, government procurement in goods and services and institutional requirements).

Chapters on national treatment for U.S.-based firms operating in the region, financial services and environmental and labor requirements will require significant work and will receive special attention during this round, she said.

Key issues for Central America, such as market access and rules of origin for agricultural products, industrial goods and textiles, intellectual property rights requirements and dispute settlement for environmental and labor violations will move forward, but are not expected to conclude before the final round, scheduled for the second week of December in Washington D.C. Special meetings to discuss these issues are expected to take place between rounds.

In agriculture, Central America will continue to negotiate the consolidation and expansion of the Caribbean Basin Initiative (CBI). Currently, 85% of Costa Rica's CBI trade privileges have been consolidated.

However, several important export products that benefit from CBI, such as melons and orange juice, have yet to be included in the U.S. market access proposal. If they are excluded from the treaty, these products will be required to pay tariffs of 30% and 40%, respectively.

"Roughly 44% of all Costa Rican agricultural production is destined for U.S. markets. We need to guarantee market access for those products," González said. "We are firmly defending the region's interests. The fact that we have consolidated market access for 85% for our exports is a sign of the progress we have made.

"Since Costa Rica hasn't been required to pay tariffs for nearly 20 years, it's hard to grasp the significance of the work we have done in consolidating most of CBI," she added. "Making sure that our products can continue to enter the United States tariff-free, without being subject to unilateral preferences that may be revoked, is a huge step toward protecting our agricultural exporters."

Negotiators will evaluate proposals to deal with the region's sensitive crops on a product-by-product basis. Special technical measures, such as agricultural safeguards, access quotas and extended liberalization periods, will be discussed for dairy products, basic grains and other sensitive products.

U.S. textile negotiators will respond this week to Central American proposals on declaring fabric shortages and increasing the flexibility of rules of origin. Market access negotiations for industrial products are expected to move forward significantly and could conclude in Houston.

Later in the week, Costa Rican negotiators will hold bilateral meetings with their U.S. counterparts to "talk" about the possibility of opening some sectors of the country's telecommunications monopoly as part of CAFTA.

The decision to begin discussing the partial elimination of the Costa Rican Electricity and Telecom Institute's (ICE) monopoly on telecom services, which President Abel Pacheco repeatedly promised to keep out of the negotiations, comes three weeks after U.S. Trade Representative Robert Zoellick visited Costa Rica and warned the country that failure to discuss the issue could result in the country being excluded from CAFTA (TT Oct. 3).

González stressed that during the meeting negotiators would "talk" about telecommunications, but not "negotiate" the issue - at least not yet.

"Ambassador Zoellick was clear on the U.S. position - Costa Rica could be excluded from CAFTA unless it includes certain areas of telecommunications," González said. "If the issue is not discussed, there will be no treaty. Given the circumstances, the President is taking a responsible attitude and agreeing to talk about the issue. It would be irresponsible to stubbornly refuse to discuss telecommunications and throw away an opportunity that stands to help our producers."

González said she remains optimistic and believes important advances will occur in Houston. The likelihood of negotiations now entering a more political phase could actually help Central American countries, she said.

"From a technical standpoint, each country has sought to defend its commercial interests," she explained. "From a political perspective, Central America has an important strategic long-term importance for the United States, well beyond the short-term effects CAFTA could have on specific sectors of the local economy.

"This creates a favorable situation for the region," she said. "Economic prosperity and political stability in Central America are important for the U.S. Immigration and security may not matter to U.S. textile producers, but they do matter to U.S. politicians in charge of approving and implementing the treaty. A political phase could be beneficial for us."