Costa Rica: Referendum, Free Trade Agreement, the Environment, and Leadership

Let me use this first contribution to the Latin America Economonitor to bring some good news from back home, Costa Rica, and some praises to the our President.

I just returned from a visit—to vote in our first referendum in favor of the Free Trade Agreement with the U.S. (My husband, from Brazil, makes fun of me. He says that only people from Costa Rica think their particular vote counts. As I tell him, in Costa Rica it really does.)

In what was a great political triumph for our president, Oscar Arias, the ‘Yes’ won. Costa Rica was the only one of Cafta’s seven signatories yet to ratify the pact (and the only one to take it to a popular vote). And although the margin was small, I believe the process has brought legitimacy to an agreement which had divided the country. (Hopefully, the referendum will also allow the agenda to move forward… which had been stuck for months.)

But I do think that a more critical analysis should be made of why so many in Costa Rica voted against this agreement. Many of those campaigning/and voting for the ‘No’ were really just voting against Oscar Arias (old time foes); many against the Bush administration (just in general … there is enough out there); other more sophisticated voters against the particular U.S. policy of aggressively pushing for bilateral trades (as opposed to working out differences in the WTO) and the many “non-trade” issues that have been added to these agreements. Others interest groups (and presidential wannabes), of course, took the opportunity to gain some political clout (with the help of resources and tactics from some of our South American neighbors). These groups managed to propagate a series of false, many simply ridiculous, stories behind the implications of the agreement (from the destruction of the pension and health systems, to the loss of some of our islands, and—my personal favorite—to a ticket straight to Hell for those supporting the agreement—I am no kidding here—). Of course, one wonders why many of these stories took hold. At the end many were simply voting against the agreement out of some inexplicable “fear”and any story would do. This is the same “fear” that seems to be spreading in Latin America.

In a conciliatory speech, asking to forget differences and work together, Oscar Arias reminded the people that free trade is not a panacea, it is just one tool. He also stressed that was dividing us was not the free trade agreement, it was poverty. And he pledged to make fighting poverty one of his central objectives going forward (maybe only this will stop the “fear” from spreading further in the region).

In any case, now the country has to implement a series of legal changes and approve a series of laws in Congress. Despite the President having the votes necessary for the approval of these laws, sadly, one of the opposition parties, P.A.C., and its leadership, are maintaining their populist ways and obstructing the process (despite their leaders having vowed to obey the decision of the majority.. yeah right, ‘dime con quien andas y te dire quien eres’). This will become another leadership test for the President.

In another victory for the President, on October 17, the United States officially agreed to forgive $26 million of Costa Rica’s debt. The deal is part a debt-for-nature swap where the government of Costa Rica has committed to use the money to protect some of the country’s most threatened tropical forests (with potential benefits to the climate as well). The president has also recently expropriated some land to save the turtles! (Maybe Oscar Arias wants to follow Al Gore and add to his list of Nobel Prizes).

3 Responses to "Costa Rica: Referendum, Free Trade Agreement, the Environment, and Leadership"

  1. Eduardo Morón   October 24, 2007 at 7:30 am

    Dear Laura,Although I tend to agree with Fabio, the narrow margin gives you the reason this time. I believe that the “fear” that you mention is even higher in countries in which the differences are more systematic. I guess that we can take as given the poor performance of governments achieving substantial reductions in poverty rates out of specific social policies. So, those that are not part of the “modern” side of the economy in our countries are left out by the window of opportunity that the FTAs represent. I might say that the fear is a fear of being left out (once again).Un abrazo a la familia,Eduardo

  2. Emma   October 24, 2007 at 6:07 pm

    Given the course that the NAFTA trade agreement has had in Mexico I wonder why people would vote for CAFTA (TLC). I have read that Mexican workers have low wage jobs with poor working conditions and long days. The housing near the border factories is poor. The neighborhoods are unsanitary. Polloution from the manufacting adds to the hazards. Throughout history trade agreements have depleted the resources of less powerful countries while giving their citizens risky jobs that are poorly paid. Remember the diamond mines in Africa. Recent history shows us the spirit in which international endeavors are conducted.,,the oil grab in the middle esat for example. A country as small and as well endowed as Costa Rica has many reasons to be careful.

  3. Guest   October 25, 2007 at 8:34 am

    Excellent article; we needed a piece on Costa Rica, a small but important and fascinating Central American country. And good that a majority approved the free trade agreement!