CAFTA winning in Costa Rica?

After a divisive and well-financed campaign, Costa Rican supporters of the Dominican Republic-Central America Free Trade Agreement (DR-CAFTA)—which reduces trade barriers between Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua and the US—appeared to have won a narrow victory in an Oct. 7 referendum on the accord. With 73% of the polling places counted at about 11:30 PM, the “yes” option had 51.6% of the votes against 48.4% for the “no” option, according to the official preliminary tallies. The Supreme Elections Council (TSE) reported a 59.84% turnout for the voting, far above the 40% required to make the results binding. This was the first referendum in Costa Rica’s history. (EFE, Sept. 7)

DR-CAFTA, signed in 2004, is already in effect in the other countries, but the Costa Rican Congress has never voted on its ratification. In April DR-CAFTA opponents forced the pro-US government of President Oscar Arias to call a referendum on the issue, the first official popular vote on a trade deal in the region.

An opinion poll published on Oct. 4 showed 55% of the population opposing DR-CAFTA, a sharp reversal from August, when polls had indicated that 56% of the country’s 2.6 million voters supported DR-CAFTA and only 36% planned to vote “no.” Support for the “no” vote jumped after the publication of a secret memorandum by Costa Rican vice president and planning minister Kevin Casas proposing a campaign of disinformation and threats to win “yes” votes.
President Arias denied that the government had implemented the proposal, and Casas took a leave of absence on Sept. 13. (AP, Oct. 7)

On Oct. 4, US Trade Representative Susan Schwab issued a statement warning Costa Ricans that the US would not renegotiate the agreement or negotiate a new agreement if they rejected DR-CAFTA. “The opportunity for Costa Rica to enjoy the benefits of regional free trade is now,” Schwab wrote. If Costa Rica fails to work out a trade deal with the US, next year its textile and tuna industries will lose some of the access it currently has to the
US market under the Caribbean Basin Initiative (CBI); other CBI benefits are permanent. (Reuters, Oct. 4)

From Weekly News Update on the Americas, Oct. 7

The vote comes days after a general strike over neoliberal economic reform in CAFTA partner Dominican Republic.

See our last post on Central America and the struggle in Costa Rica.

  1. Costa Rica: Wall Street Journal gloats
    From the Wall Street Journal, Oct. 9:

    Bravo, Costa Rica
    Free traders celebrated a victory Sunday when Costa Rica approved the Central American Free Trade Agreement in a national referendum, with 51.6% of the vote. The decision to expand commercial relations both regionally and with the large U.S. market is a triumph of Costa Rican hope and confidence over the fear peddled by opponents.

    Cafta succeeded despite the extraordinary last-minute intervention against the deal by House Speaker Nancy Pelosi, Senate Majority Leader Harry Reid and other Congressional Democrats. Vermont Senator Bernie Sanders and Representative Mike Michaud of Maine even traveled to San José to help anti-Cafta leader Ottón Solís in his bid to defeat the trade pact.

    Their efforts seem to have backfired. When Costa Ricans looked into the voting records of Mr. Solís’s friends, they found their interests didn’t coincide. Democrats claimed Costa Rica could reject Cafta and retain preferential access to the U.S. market. But it turns out Mr. Sanders voted against trade preferences for Costa Rica in the House in 2000, as did Ohio’s then-Congressman and now Senator Sherrod Brown, who with North Dakota’s Byron Dorgan was also urging Costa Ricans last week to reject Cafta. Mr. Michaud is new to the House, while Ms. Pelosi and Messrs. Reid and Dorgan all voted against Cafta.

    Voters seem to have trusted their own president, Oscar Arias, who warned that a “no” vote would transform the country from the Switzerland of Central America to “the Central American Albania, isolated by our own accord.” Costa Rica’s Congress must now pass implementing legislation by February 29, a process that will test the democratic bonafides of Mr. Solís. He said he would respect the outcome of the vote last week when his side was leading in the polls. Perhaps Ms. Pelosi will advise him that democracies honor election results.