El Salvador First to Ratify CAFTA
By Katherine Stanley
Tico Times Staff
kstanley@ticotimes.net

On Friday, El Salvador became the first country to ratify the Central American Free-Trade Agreement with the United States (CAFTA), approving the agreement with 49 votes from a total of 84 legislators. While this development heightens pressure on CAFTA proponents in Costa Rica to facilitate its passage here, Foreign Trade Minister Manuel González responded by reiterating that President Abel Pacheco will not send CAFTA to the Legislative Assembly until his administration's tax plan is approved.

In the Salvadoran legislature, 29 legislators from the Nationalist Republican Alliance (ARENA), 14 from the National Conciliation Party (PCN), 5 from the Christian Democratic Party (PDC) and independent legislator Manuel Navarette voted in favor of CAFTA, according to wire service EFE.

30 members of the Farabundo Martí National Liberation Front (FMLN) voted against the pact, and the 5 members of the United Democratic Center (CDU) abstained during a marathon debate that began at 4 p.m. Thursday, EFE reported.

CAFTA was signed by the representatives from the United States, Guatemala, El Salvador, Honduras, Nicaragua and Costa Rica in May (TT, May 28) and re-signed in August to include the Dominican Republic (TT, Aug. 6). As soon as the legislatures of the United States and one of the other signing countries ratify the pact, CAFTA will take effect between those two nations.

Since most analysts predict U.S. President George W. Bush will send CAFTA to the Republican-controlled Congress early in 2005, and since Honduras and Nicaragua also seem poised to ratify the agreement (TT, Nov. 12), Costa Rican free-trade advocates are facing the prospect of being left out in the cold, especially since Pacheco has conditioned CAFTA on the tax plan's approval.

González, however, said Friday that while it's “worrying that Costa Rica might be left behind,” the administration's stance will not change.

“The President has made it very clear that he will not initiate the ratification process of CAFTA until the plan is approved,” he said, referring to the Permanent Fiscal Reform Package, which would implement new taxes and improve collection of existing taxes in order to increase government revenues.

“I send congratulations to El Salvador 's government and congress,” he added, “but Costa Rica has its own sensibilities.”

He criticized Costa Rica 's assembly for not bringing the plan, which has been under debate for 28 months, to a vote. “May the assembly assume the responsibility the people have given it,” he said, emphasizing that responsibility means “achieving a vote -- not necessarily approval.”

Pacheco himself spoke out to defend his position on Saturday, running an opinion piece in the daily La Nación in which he took issue with a La Nación article that stated his refusal to send CAFTA to the legislature contradicted in the agreement he signed Wednesday in El Salvador with other Central American heads of state, promising to work toward the timely ratification of the treaty.

“There is no contradiction,” the headline read. Pacheco stated in the article that it is crucial to ensure new mechanisms for the distribution of wealth through taxes before implementing the free-trade agreement.

“ Costa Rica ...has and maintains as its national legislative priority the approval of the fiscal plan,” the editorial said.

Calls to Cell Phones in
Nicaragua Blocked
By María Gabriela Díaz
Tico Times Staff
mgdiaz@ticotimes.net

In a move that may keep scores of Costa Rican residents from speaking to their loved ones across the border over the holidays, the Nicaraguan

Telecommunications Company (ENITEL) has blocked calls originating in Costa Rica to cellular phones in Nicaragua , according to a statement from the Costa Rican Electricity Institute (ICE).

At this moment, it is impossible to call numbers in Nicaragua that begin with the following digits: 600 to 608, 610 to 611, 613 to 618, 623 to 629, 805 to 807, 820, 821, 830 to 840, 841, 843 to 848, 850 to 856, 860 to 889 and 893 to 899.

Claudio Bermúdez, ICE's assistant director of telecommunications, told the daily Al Día the decision was a unilateral measure adopted by ENITEL in response to Costa Rica 's refusal to pay $0.12 per minute to mobile phones in Nicaragua .

ICE is making all the necessary efforts to solve the problem with the Nicaraguan communications company as quickly as possible, the statement said.

Court Reinstates Ericsson Cell Phone Contract 

The Constitutional Chamber of the Supreme Court (Sala IV) ordered that the Costa Rican Electricity Institute (ICE) reinstate a $130 million cellular phone line contract with the Swedish firm Ericsson.

In October, then-Comptroller Alex Solís refused to validate the contract, saying Ericsson had incurred irregularities such as importing part of the equipment before the contract had been approved.

Ericsson filed an appeal of Solís' decision in November, arguing the Comptroller had confused preparatory activity for the contract with its actual execution, and that the equipment Ericsson had brought to Costa Rica was still in the customs process.

By annulling the Comptroller's decision and ordering the state to continue with the Ericsson contract, the Sala IV justices opened the door for ICE to receive 600,000 new GSM lines.

This provides new hope for consumers, since ICE sold the country's last remaining GSM lines Nov. 29 -- causing lines that stretched around the block, with some clients camping out in hopes of obtaining a line -- with no prospect of additional lines in sight. According to the daily La Nación, the lines from the Ericsson contract could be on sale in early 2005.

Both Ericsson and Solís have been the subject of controversy in recent months. The Sala IV announcement comes just five days after the Legislative Assembly voted to remove Solís from his post because of accusations he forged family members' signatures while working as a lawyer. His decisions regarding government contracts made him a polemical figure during his brief term (TT, Dec. 17).

Meanwhile, Ericsson drew criticism in July when it was alleged company officials paid for a trip to Prague for three former ICE board members, although Ericsson has insisted it did not make the payment (TT, July 23).

-Tico Times and EFE reports