Long, Strange Trip
The United States and the five Central American countries signed the free trade agreement on December 17, 2003. Costa Rica and the Dominican Republic joined in early 2004. Having signed the agreement, all the nations then had to ratify it in their respective legislatures. The US Senate approved the free trade agreement in June of 2005, followed by the House of Representative's approval the following month. The Central American countries, then the Dominican Republic, subsequently ratified. Every country but Costa Rica is now operating under the terms of the agreement.
Costa Rica's difficulties began almost immediately upon signature, for once the treaty was signed Costa Rica's Abel Pacheco did not act as one would expect of the President who presided over the trade negotiations. President Pacheco began to visibly waffle, making contradictory statements and relegating the treaty to a relatively low priority in his administration's legislative agenda. The president even appointed a commission of "notables" to evaluate the agreement as though somebody else were responsible for its creation and the president needed help in evaluating it.
In retrospect, it would appear that Pacheco left Costa Rica's CAFTA trade negotiators largely to their own devices, but didn't trust their work as much as that delegation of authority would imply. President Abel Pacheco's failure to act as a chief executive, both during negotiations and the subsequent approval stage, has probably been the single biggest factor in Costa Rica's failure to approve the treaty to date.
CAFTA consequently became a cam¬paign issue leading up to the February 2006 presidential election. The anti-CAFTA campaign took on a "throw the bums out" flavor that politicians everywhere have learned to successfully exploit, aided by the reality that CAFTA's most vocal supporters tended to be among the more affluent members and sectors of Costa Ri¬can society. The campaign tactic was very successful, with Otton Solis of the upstart Peoples Action Party (PAC) coming within fewer than two percentage points of tying Oscar Arias, a former president and noble laureate who clearly did not expect such a close race. The partisan dogma established in that election has tragically continued to characterize the CAFTA debate.
President Oscar Arias, taking office in May 2006, has been a firm and consistent advocate of CAFTA, yet his Liberation National party does not have the votes to approve the pact and its supporting legislation. This prompted the formation of an adhoc 38 vote coalition, since while a simple majority of 29 votes is enough to pass most legislation, some legislation requires 38 votes. Arias appeared to be steadily moving the legislation through the Assembly, and readying his forces to approve CAFTA.
At this juncture, the panorama changed radically, as a petition to the National Elections Tribunal by several opponents to CAFTA surprisingly resulted in the Tribunal ruling that CAFTA could be decided by popular referendum. Within a week of this decision, President Oscar Arias declared that he was convoking a popular referendum, effectively short circuiting what could have been a drawn out process of signature collection.
Subsequent decisions by both the Supreme Court and by the Elec¬tions Tribunal determined that CAFTA is in fact consistent with the Costa Rican Constitution, that the Referendum would take place on October 7 and that 40% of the registered Costa Rican electorate must participate in the elections (with "YES", "NO" and null ballots) for the decision to be made by simple majority of the voters present.
However, even when CAFTA is approved by the voters of Costa Rica on October 7, the treaty will not take effect unless Costa Rica makes a series of modifications to its laws as specified in CAFTA: insurance, telecommunications, intellectual property, and other reforms. The modifications are contained in a set of 13 bills that are currently moving through the legislative process. Although the Arias administration decided not to submit the bills for discussion until after the October 7 referendum, the Congress is highly likely to approve them if CAFTA wins the Referendum.
The deadline for Costa Rica to enter DR-CAFTA is March 1, 2008. If the country does not ratify the treaty and approve the required complementary legislation by then, Costa Rica will be obliged to obtain approval for a deferral from all the DR-CAFTA signatory nations.
EDUCAFTA - Talk to Folks
AmCham initiated the "Educafta" program in March 2005, with presentations by qualified professionals to companies that want to provide their workers and collaborators with information on free trade agreements and why it is important for Costa Rica to strengthen its ties with its largest trading partner.
The program was later expanded to include schools and community groups. AmCham's two Educafta educators, Catalina Fabrega Membreno and Jose Manuel Jimenez, describe the program in roughly two stages: the first was from March 2005 to November of 2006, and reached 20 to 25,000 people.
Since March of 2007, the program was expanded to include a third educator –Wilson Rojas. Catalina Fabrega comments that during the first 1 1/2 years, AmCham found itself selling the program to inter¬ested companies, while in the period from
May to the present, the business sector has been actively requesting presentations in their companies. The nature of the presentation has changed as well. Jose Manuel Jimenez explains that during the first stage, "we almost took up all the time with a [formal] presentation In contrast, the current program consists of an overview of the treaty, a motivational portion to encourage voter turnout, and an extended Question and Answer session that may extend from a half hour to as long as an hour.
EduCAFTA educators do not debate, at least not in the formal sense of the word. Yet they habitually find themselves confronted with those questions that are most on peoples' minds and often asked by individuals pre-disposed to vote "NO" Thus, they offer genuine insight into what Costa Rican voters are thinking.
On Peoples' Minds - Environment and Water
The three EduCAFTA educators agree that the top topic of concern has been the environment, often expressed as a concern for Costa Rica's control over its water supplies. They note that the question regarding Costa Rica's water is asked "in all the gatherings.' The educators respond to the question by noting that Costa Rica already allows the bottling and sale of water by private companies.
The corresponding laws don't change at all and in fact there is an explicit exclusion in CAFTA allowing the country to change water laws if that were to be necessary. "That's one of the exclusions that the treaty has", comments Catalina Fabrega.
More generally, Jose Manuel Jimenez comments that "I've never seen so many environmentalists in Costa Rica", as citizens express concern that CAFTA would some-how contribute to environmental damage.
Yet that new found environmental fervor is completely misplaced when directed at CAFTA, for the treaty's negotiators were at pains to ensure that each country enforce and reinforce its environmental structure. In fact, it is notable that the most commonly asked question is one of the most easily answered for supporters of CAFTA, for environmental fears about CAFTA have very little basis in fact.
On Peoples' Minds - Labor Rights and Opportunities
The second most frequently expressed concern has been in the area of la-bor rights and privileges. The educators divide the concern conceptually into two parts, with different social levels tending to emphasize different concerns. Workers, such as those in the ornamental plant farms that the Educafta team has been visiting lately, tend to ask if CAFTA will affect their traditional benefits, such as "cesantia" and "aguinaldo" Many questions address the fear that such benefits don't exist in the United States, and that under CAFTA, US law would be in effect in Costa Rica. The simple answer is no; those benefits are guaranteed by the Costa Rican Labor Code and are in no way changed under CAFTA.
Another frequent question among such workers is if their work opportunities will be limited under CAFTA because they don't have the proper education. Ability to speak English and the possession of a high school diploma are commonly mentioned. The response, of course, is that companies establishing themselves in the country will need a wide range of employees, and a growing economy will translate to an increase in labor demand for all kinds of jobs.
When addressing more affluent groups of workers, the EDUCAFTA educators fre quently hear the concern that US professionals will replace Costa Ricans. The answer again is very straightforward. Anyone exercising a profession in Costa Rica must comply with government regulations in addition to those of the relevant professional association. Costa Rican professionals have nothing to fear on that score.
On Peoples' Minds - Health Care and Education
Costa Ricans really worry about health care. This has manifested itself in several frequent sets of questions. One has to do with generic drugs and the cost of those drugs if CAFTA is passed, and the other has to do with privatization of the Social Security system.
"People have been told," says Catalina Fabrega, "that the Social Security System will go bankrupt. Because the medicine that the Social Security System purchases will have to be all brand name. That's the myth that reaches [the public]."
In reality, of course, the Social Security System's transition towards more branded medicines has been underway for years; CAFTA represents a strengthening of intellectual property laws that took force in Costa Rica when the country began recognizing 20 year patents in the year 2000. Further more, the cost of drugs is a small enough percentage of the total cost of medical care (under 10%) that this trend will not be the reason that the Social Security System fails.
The more general worry that "everything will be privatized" often manifests itself as a question about the privatization of both the Social Security System and the Educational system. The simple reply is that CAFTA says nothing about the privatization of either. Furthermore, since a growing economy will more easily provide the necessary resources to maintain and improve those social services, CAFTA will most likely bring benefits to those sectors.
On Peoples' Minds - Conflict Resolution
International conflict resolution has become a frequent subject of questions. "People ask," notes Wilson Rojas, "if there is a conflict between a US company and Costa Rica, how is it resolved? Do we have to go to international arbitration? Will we end up losing? Will we end up with huge settlements against us?" Rojas is referring to one of CAFTA's conflict resolution systems the international arbitration tribunal. CAFTA opens the possibility that, under some circumstances, a foreign company may bring a case against the government of Costa Rica for arbitrary, inconsistent or unlawful actions against the company.
"People believe", comments Catalina Fabrega, "that the country isn't currently threatened by the possibility that a US company might sue it. Right now, compa¬nies can do that too." Her point is that not much will change under CAFTA.
On Peoples' Minds - Why the Argument?
People naturally think that "where there's smoke, there's fire" ("Cando el rio truena, piedras trae.") So the EduCafta educators often find themselves explaining why there is so much argument over CAFTA, even though the treaty is a good deal for Costa Rica. A related question is "what are the bad things about CAFTA?"
When asked this question, Catalina Fabrega insists that "a free trade agreement is an instrument, not good or bad. It depends upon national policies."
Having clarified that, she commonly cites three groups of people who doubt or denounce CAFTA for different reasons. The first are people who really don't understand the treaty and are scared; perhaps people who have little access to information. Secondly, she notes that some people oppose CAFTA because their personal interests are at stake: some union members, rice growers, producers of generic drugs. The third group she cites is opposed to CAFTA for ideological or political reasons. She sees this third group divided into two, with one group of radicals who oppose the United States and anything to do with it.
The other group is less radical, but has found it politically expedient to oppose CAFTA.
There really aren't that many people opposed to CAFTA, notes Fabrega. As Jose Manuel Jimenez says, the opposition can be understood as limited "to those specific groups. But the treaty has been in limbo for so long now that the people who oppose it have succeeded in planting a great deal of doubt. So a lot of people are uncertain, and they end up joining the "NO" side because they don't know.'
On Peoples' Minds - Small Farmers
"I am always hearing the statement" comments Wilson Rojas, "that the small and medium sized farmers are going to go broke [under CAFTA]". Roja's response is to ask them "which small and medium sized farmers? Chayote farmers? Yuca farmers? Meat producers? Milk producers?" His point is that many small farmers will see their products favored under CAFTA, and that when people talk about "small and medium sized farmers" being harmed by CAFTA, "they really have no idea what farmers they are talking about':
"Our agricultural products are complementary", says Catalina Fabrega. "They don't compete [for the most part]. The United State's subsidies are for specific products that practically don't affect us. Wheat, corn, sorghum, barley. Just rice [competes].'
On Peoples' Minds - Disastrous Treaties
Many participants refer to other free trade agreements, with the understanding that Mexico or the other Central American countries have done very badly with their US free trade agreements. "Estan quebrados" ['they're in bad shape'] is a common comment.
Jose Manuel's reply is "No country with a free trade agreement is doing badly. In the commercial area which is the heart of the treaty."
In this context, Mexico is frequently mentioned since some of that country's basic social indicators haven't changed much even though the country has prospered commercially. Wilson Rojas' response is "the country has had a succession of corrupt administrations and much needed institutional reforms have not occurred resulting in failure to adequately address the country's poorest sectors. Additionally, there is the long running armed conflict in Chiapas that has required enormous military resources. The government can't resolve its problems.'
On Peoples' Minds - ICE
Wilson Rojas says that people don't ask much about ICE [the national tele-communications and electricity provider] anymore; he speculates that "people have realized that there won't be privatization or sale of ICE" However, there are questions about whether cell phone rates and public telephone rates will go up.
The Educafta team endeavors to make it very clear that only two aspects of ICE's telecommunications will be opened to competition: cell phones and Internet. "It's a process of opening, and we compare it a lot to the process of opening up the banking sector," says Catalina Fabrega.
This is an instructive example, since both private and public banks have done well in the process and consumers in particular have reaped the benefits. Furthermore, there will be a regulatory entity that supervises the telecommunications prices, so the competitive opening will be regulated and gradual. "Competition is always good" summarizes Catalina.
Don't Just Stand There
While the major part of an EduCAFTA presentation is the Question and Answer period, ten to fifteen minutes of the introduction are devoted to the importance of voting. This is a good strategy when motivating undecided voters to support CAFTA. When speaking with an undecided voter, spend considerable time emphasizing the citizen's responsibility to make a decision and vote.
Costa Ricans are very conservative in their reluctance to make a decision without being sufficiently convinced of its correctness. Yet in the case of the CAFTA referendum, this individual reluctance to commit could translate into a collective inability to act. One appropriate slogan could be "vote for CAFTA, then keep on voting" Catalina Fabrega notes that "one of the things that we really emphasize is that the treaty, by itself, is neither good nor bad. The results that we hope to get from the treaty largely depend on the (Costa Rican) laws and policies that we develop. The treaty by itself doesn't lower employment. The treaty by itself doesn't eliminate poverty. The treaty by itself doesn't eliminate inequality. But it is one element more in the development process, and helps to continue to make this country attractive to foreign investment."
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