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Costa Rica: Yes to CAFTA?

Latin America Advisor

Costa Rica's president [recently] announced his government would hold a national referendum on the controversial DR-CAFTA free trade pact with the United States. What is behind the surprise move? Do you think Costa Rica's voting public will support the trade agreement in the referendum?

Sonia Picado, former Costa Rican Ambassador and President of the Inter-American Institute of Human Rights: President Arias' announcement came as a surprise, particularly to the enemies of the treaty. Jose Miguel Corrales, former candidate to the presidency and one of the trade deal's principal opponents, requested the electoral tribunal call for a consulta popular requiring over a hundred thousand signatures. The main objective was to delay the approval of the agreement by Congress, with the more ambitious objective of reaching the deadline for Costa Rica to ratify. President Arias, a knowledgeable and experienced politician, made a quick move and told the country that he was ready to send a decree to Congress asking for a national referendum on the issue. This historic decision placed the discussion back onto the right and more democratic road of going from the executive to Congress and from there to the electoral tribunal. In his words: 'the referendum will allow us to count votes instead of people rioting in the streets.' Throughout their history, Costa Ricans have shown a solid respect for democratic values and have complied with the decisions of the electoral majority. The president himself is committed to fighting for a positive answer, and so far the polls show that the agreement is favored by a majority of the voters. Certainly the answer will be at the polls, and it should be respected. In this traditionally democratic country, President Arias is showing that constitutional procedures can be used, and hopefully succeed, in what has been one of his main commitments.

Todd Tucker, Research Director of Public Citizen's Global Trade Watch: Costa Rica's move to put trade pacts like CAFTA to a popular referendum is a step in the right direction for democratic process. Trade pacts have such significant impacts on livelihoods—both by increasing inequality and opening new avenues of corporate challenge to public interest laws—that there should be as wide a debate as possible to decide whether they should be adopted and how. Otton Solis' come-from-behind, surprise near-tie in the 2006 elections was achieved almost exclusively on the basis of his campaign's CAFTA opposition. Since then, major national protests and opposition in the legislature have ensured that the pact is not ratified. If these Costa Rican fair trade movements are able to marshal even a fraction of the organization they've shown thus far, CAFTA is very unlikely to be approved in the referendum. Judging by opinion polls in the United States, as well as the outcome of the midterm elections (where 37 fair traders replaced anti-fair traders), pending trade pacts would be unlikely to pass a democratic referendum here either.

Jose Carlos Quirce, Costa Rica's Special Envoy for CAFTA in Washington: The Costa Rican Electoral Tribunal ruled last week that a group of citizens can collect signatures to request a binding referendum on the Central American-US Free Trade Agreement. Previously, there were several divided opinions among experts about the legal feasibility to call for a referendum because of domestic regulations. The Tribunal's decision opened the opportunity for the Arias administration to call for a nationwide referendum and let the Costa Rican people decide if they want to join the Free Trade Area with Central America, the Dominican Republic and the United States. The decision taken by the Arias administration is wise, because instead of waiting for up to nine months to hold the referendum once all the requisites are filled, the referendum can be held within three months, thus avoiding an unnecessary delay. This is going to be a real democratic expression of the people's will. It would also allow a final decision on the matter. So far, despite the fact that President Arias, two thirds of the members of our legislature, and the majority of the population (as consistently demonstrated by opinion polls) support the agreement, the anti-CAFTA forces in Congress have been using all legal maneuvers to avoid a final vote. Regarding the chances of an affirmative vote, all opinion polls in the last three years have indicated that there are substantially more people in favor of CAFTA than against it. I believe that the likelihood of a 'yes' vote winning is very high. Costa Ricans traditionally have been in favor of trade and good relations with their neighbors. They also understand the importance of close trade relations with the US because more than 40 percent of our exports go to the American market. In addition, more than 50 percent of the foreign direct investment is originated in the United States. Costa Ricans know that they have a comparative advantage to compete not only in exporting agricultural and industrial products, but also in providing services of international quality. They understand that the agreement will allow our people to take advantage of their education, health standards, and skills to compete in international markets and create economic growth and social development. If the referendum is voted 'yes' with the necessary minimum participation according to our laws, then Costa Rica will join CAFTA later this year or early next year once the implementing legislation is passed by our Congress.

Otton Solis, who ran against Oscar Arias in last year's presidential election: All of this is the result of the civic opposition to CAFTA and specifically to the massive demonstration on February 26. The referendum was repeatedly requested by the anti-CAFTA movement. Finally, the Electoral Tribunal answered positively, leaving the president without options. Will the voting public support the trade agreement in the referendum? We will defeat it. In Costa Rica, medium and small entrepreneurs, the environmental movement, farmers, the most prestigious universities, workers, and intellectuals oppose CAFTA. The extent of that opposition was evident in the 2006 presidential elections, when running a short and inexpensive citizens campaign, our party, which opposes CAFTA, nearly won the election. What does it mean for CAFTA? The Costa Rican referendum means the first truly democratic test to these trade agreements. CAFTA was drafted outside of our borders, negotiated in near secrecy, adopted by several countries as if all of them were identical and promoted with threats about likely US trade punishment measures. Therefore, the politics of CAFTA have had very little to do with democracy.

Alan Thompson, Partner at Bufete Thompson & Asociados in Costa Rica: I would say that three fundamental factors are behind the decision. The first is the Supreme Electoral Tribunal's authorization for the referendum last week. Previously, it was assumed that the referendum wouldn't go forward because the treaty [CAFTA] is a tax matter, but the final decision was the Tribunal's. Second, the treaty has been under discussion in the country for almost three years and the deadline for implementation without needing to get permission from the other [CAFTA] parties expires on March 1, 2008, so it doesn't make sense to wait for those concerned to collect the minimum signatures required when the executive branch has the legal prerogative to call the referendum along with the joint decision of the legislative assembly. Third, the concept of the referendum, although it's new in the country, falls in line with Costa Rica's solid democratic tradition. All of the serious opinion polls have shown that a majority favor the treaty, so the most likely scenario is that the referendum will be approved. If the minimum participation isn't reached for the result to count, the treaty will be taken up again by Congress to finish its task. It is known that there are sectors in Latin America that are opposed to this type of treaty. But I believe Costa Rica's situation owes to rather specific circumstances in the country, among them: the extreme complexity and slowness of the legislative process and a strong tradition supporting the state telecommunications institution, whose monopoly would be opened with the treaty.

Republished with permission from the
Inter-American Dialogue's daily Latin America Advisor newsletter. 

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