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By Elyssa Pachico
For The CAFTA Report
(Sept. 30, 2008) When it comes to ratifying the Central American Free Trade Agreement,
the clock keeps running out on Costa Rica. The country got another
break today when its trading partners agreed to reset the clock and
approve another extension.
The Asamblea Legislativa was supposed to have passed the laws necessary
to ratify the free trade agreement by Oct. 1, but instead the
government was forced to ask for an extension until Jan. 1, 2009.
“Frankly, I never expected that we would have to request another
extension,” said President Óscar Arias Sánchez during a
brief press conference this afternoon.
“I hoped that we'd be able to
have the law presented before congress in October, so that we could
begin implementing TLC before the fourth of November, before the
elections in the United States,” he added, using the Spanish acronym
for the pact.
Arias met today with U.S. Secretary of Commerce Carlos M. Gutierrez,
who is touring Costa Rica in what is widely seen as an effort to
pressure the government into speeding things up. Shortly after
their press conference, Casa Presidencial announced that all signatory
nations of the free trade treaty had approve the extension for Costa
Rica. This was a requirement.
Of the six countries that have signed the free trade agreement,
including El Salvador, Honduras, the United States, Nicaragua,
Guatemala and the Dominican Republic, Costa Rica is the only one that
has not yet begun fully implementing the treaty, due to opposition and
complex legislative, judicial and bureaucratic delays.
Costa Rica, also the last country to ratify the deal, first asked for a
seven-month extension back in February. Any likelihood of meeting the
October deadline, however, was derailed when the Sala IV constitutional
court ruled Sept. 11 that the legislature could not pass a law
concerning intellectual property rights without first consulting the
country's native groups.
“We don't have any specific conditions for how this law should be
passed,” said Gutierrez. “We're asking that they pass the treaty as
quickly as possible.”
The supreme court ruling was the latest delay in what has already been
a long, painful wrestling match between Costa Rica and the free trade
agreement. The agreement was only approved narrowly in a referendum
Oct. 7.
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A.M. Costa Rica/José Pablo
Ramírez Vindas
President Óscar Arias Sánchez seems to be giving
a thumbs-up sign to visiting U.S. Commerce secretary.
Public opinion is similarly split: anti-treaty graffiti is a common
sight on the walls and public buildings of San José. However,
the president continues to stand behind the treaty.
“Each day that passes in which the TLC is not signed into
law is another day that damages the citizens, the workers and the small
business owners of Costa Rica,” he said.
While both Gutierrez and Arias emphasized the damage that an unratified
pact would inflict on the Costa Rican economy, Gutierrez implied that
it was unlikely that the country would immediately experience any
negative fallout from the current financial crisis gripping U.S.
markets.
“I expect that this won't affect bilateral relations,” he said. “What
may happen is companies will be more selective when deciding where to
invest, so they'll begin looking more at things such as transparency of
law . . . laws concerning private property . . . areas in which
Costa
Rica has always excelled.”
Separately, the U.S. government agency, the Overseas Private Investment
Corporation said that it will loan $45 million to Costa Rican bank
Banco Lafise, as well as $60 million to Banco BAC San José.
Both banks
intend to funnel the money towards loans for aspiring homeowners.
Robert Mosbacher, head of the agency, said in a news release that the
$105 million investment, along with the approval of the free trade
agreement, signaled that Costa Rica's integration into the free-trade
market would yield nothing but benefits.
“OPIC recognizes the importance of demonstrating to the citizens of
Costa Rica that open markets and free trade can help improve the
quality of life for citizens and help small businesses better exploit
their economic potential,” he said.
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