Business Leaders: CAFTA Is
Like “Trading Gold for Buttons”
By Robert Goodier
Tico Times Staff
rgoodier@ticotimes.net

Hours before a Casa Presidencial spokeswoman told The Tico Times that President Abel Pacheco will send the Central American Free-Trade Agreement with the United States (CAFTA) to the Legislative Assembly today – see the print or online pdf edition of The Tico Times for more on this breaking news – ex-President Luis Alberto Monge led dozens of business leaders, intellectuals, former legislators and statesmen in calling on him to scrap CAFTA and forge a separate, bilateral trade agreement with the United States.

Costa Rica would give more than it receives under the agreement, a fact that has energized the anti-CAFTA movement in spite of a barrage of pro-CAFTA propaganda, Monge said yesterday before his formal petition to Pacheco. Pro-CAFTA propaganda has “dangerously polarized” the country, he said – an unnecessary step when Costa Rica can follow in Panama's footsteps and reach a private agreement with its northern neighbor.

Monge (1982-1986) is a fixture in the National Liberation Party (PLN), but has broken from his party's pro-CAFTA stance and opposed its front-running presidential candidate Oscar Arias.

“We want an agreement with the United States, but not under the terms that are approved. Costa Rica has singularities in its socioeconomic development that differentiate us…from the rest of Central America. There are many things (in CAFTA) that don't have anything to do with our country's interests; rather, they correspond to our Central American brothers,” he said.

Under CAFTA, Costa Rica would surrender its power to effectively regulate environmental, labor and investment standards, University of Costa Rica (UCR) political science professor Luis Guillermo Solís said, and it would forfeit the ability to prosecute private companies directly for breaking the law, since they would be shielded by their governments.

“We've had a good relationship with the United States precisely because we have not had the social problems of other countries in the region,” he said. “Now we see the United States as an ally, rather than a master, but that could be damaged (under CAFTA).”

On negotiating a separate agreement, he said, “It will be difficult, I admit – why would the United States go for that? But we have done things our own way in the past; we can do it again.”

Juan Maneul Villasuso, UCR economic policy professor and former Planning Minister under Monge, denounced an arms-trade clause in CAFTA.

“There would be a devaluation in tariffs imposed on weapons – every kind of weapon – which would reduce the price of arms and possibly increase demand, and that is absolutely unacceptable,” he said.

Rodrigo Jiménez, a watch store manager, is opposed to CAFTA in spite of his admission that it would help retail businesses like his own by lowering import costs.

“The problem with CAFTA is the inequality it generates in other sectors,” he said. “It's absurd to think that just to maintain a business, the entire fabric of Costa Rica is destroyed.”

It will hit the country in its soft spots, he said.

“We are reeking in insurance, we are reeking in telecommunications and energy and we are reeking in medicine, which are the great industries of Costa Rica that have no price. (Under CAFTA) we will find in just a few years that we have lost our dream,” he said.

Ernesto Macaya, owner of an agrochemical production and export business, pointed to CAFTA's medicine and agrochemical registration rules, saying they would close out competition from generic brands and give the big U.S. chemical producers monopolies in Central America. He said they enjoy default monopolies in the United States, where the cost of registering generic brands is often too high for the generics to make a profit.

“The irony about the free-trade agreement is that it monopolizes trade in drugs and agrochemicals,” he said. “In Costa Rica, the market is open and there's competition – the monopolies are gone. Here, the open market works; in the United States it has been sabotaged.”

He agreed that Central America would give up more under CAFTA than would the United States.

“Like when the Spaniards came, they traded buttons for gold nuggets from the natives,” he said. “We are doing the same; we are trading gold for buttons.”