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CAFTA Supporters Renew Lobbying

A week after the reelection of U.S. President GeorgeW. Bush gave renewed hope to supporters of the proposedCentral American Free-Trade Agreement (CAFTA), businessleaders in the region are scrambling to drum up supportfor the trade pact with the United States.Efforts include a new campaign to “educate” factoryworkers throughout the isthmus about the agreement’sbenefits.Debate about CAFTAhad lessened in recent months asproponents and critics alike awaited the result of the Nov.2 U.S. elections, after Democratic challenger John Kerryvowed to renegotiate labor and environmental aspects ofthe agreement.Kerry’s defeat and Republican majorities in the U.S.House and Senate make CAFTA’s passage appearinevitable, at least in the United States.THE Economic Section Chief for the U.S. Embassy inSan José, Whitney Witteman, told The Tico TimesCAFTA could theoretically be approved by the U.S.Congress as soon as Nov. 23, although he thinks lateJanuary or early February 2005 are more realistic projections.Either way, “we expect its successful passage in the near future,” he said.These dates, and the fact that countriessuch as Nicaragua also seem poised toapprove CAFTA soon, have sparked concernamong business leaders in Costa Ricawho worry exporters here will be severelyaffected if the United States and otherCentral American nations ratify the agreementand Costa Rica does not.“We feel a great deal of fear,” saidMichael Borg, who owns a textile companyin Costa Rica and is a board member of theCosta Rican-American Chamber ofCommerce (AmCham). “If the other countriesapprove it and we don’t, we’ll be in aneven worse position than we are in already,confronting China as a major competitor.”WORKERS, not politicians, are thetarget of the latest lobbying strategy byCAFTA’s proponents, despite the fact thatthe agreement’s fate is ultimately in thehands of each nation’s legislatures.Officials from the AmChams of CostaRica, Nicaragua, Honduras, El Salvadorand Guatemala, as well as other privateand public-sector leaders, met via videoconferenceTuesday to announce a new“education campaign” designed toincrease support for CAFTA among workersthroughout the region.The leaders watched a sample from a25-minute promotional video produced inEl Salvador.Costa Rica’s AmCham president,Carlos Denton, who introduced the video,said its goal is “to give Central America’sfactor workers – who have, on average, asixth-grade education – information aboutthe benefits of this agreement.”In the video, which includes images ofMayan ruins and natural beauty, a boomingvoice tells the viewer Central Americais a “magical region,” the “land of hope”where “work, and only work, will makeour dreams come true.”“Our future isn’t in petroleum, in mineralsfrom our soil, or in aid from othernations,” the video says. “It’s in conqueringnew markets.”BUSINESS owners from each participatingcountry, including Tomás Gilmore,president of the Costa Rican seafood-processingfirm Sardimar, appear in the videoto describe the benefits of CAFTA.Denton said he expects the video to beready for distribution to AmCham memberbusinesses in approximately 10 days.“There is a widespread lack of knowledgein Costa Rica, and throughoutCentral America, about the benefits of thefree-trade agreement,” he said. “We wantto remedy that.”He added that debate of the agreementhas been limited to business leaders andintellectuals, and than the purpose of the newcampaign is to “bring this to the people.”He expressed reluctance to criticizePresident Abel Pacheco’s handling of thefree-trade agreement. Pacheco has said hewill not send CAFTA to the LegislativeAssembly until the Permanent FiscalReform Package, an ambitious and highlycontroversial tax plan that has been underdebate for nearly three years, is approved(TT, Sept. 17).“We have to be respectful of theadministration’s priorities,” Denton said.“We completely support the tax plan.Without it, we will see serious problems in2005.”BORG dismissed the notion businessleaders are using scare tactics.“This isn’t a fear campaign,” he said.“It’s a campaign to educate people so theyunderstand reality. That’s not fear. Theseare facts.”Lynda Solar, executive director ofAmCham Costa Rica, added, “It’s theunions that are conducting the fear campaign,”referring to the strong oppositionto CAFTA from labor unions of the CostaRican Electricity Institute (ICE), NationalInsurance Institute (INS) and NationalAssociation of Educators (ANDE), amongothers.These groups, along with small farmers,environmentalists, students and manyothers, have opposed CAFTA since negotiationsbegan in January 2003 (TT, Jan.31, 2003). These groups argue CAFTAwould destroy local farmers by allowingalmost all U.S. agricultural exports,including Costa Rican agricultural staplessuch as rice, to enter the country tarifffree,giving U.S. corporations an insurmountableadvantage.Activists also say the pact will wreakhavoc on the environment, since it opensthe door for authorities to be sued if newenvironmental protection laws infringeon a company’s ability to make a profit(TT, June 4).Other heavily criticized elements ofCAFTAinclude the requirement that CostaRica open the ICE telecommunicationsmonopoly by 2007 and INS insurancemonopoly by 2011, and allegations that itsstrict intellectual property rights clausescould increase drug prices as much as3,000% (TT, Feb. 13).SUPPORTERS of CAFTA argue theagreement will foster economic growth,ultimately improving the quality of life forCentral Americans.Tuesday’s videoconference also featuredthe inauguration of the Alliance forCAFTAction, an initiative designed tounite private and public-sector leaders inpro-CAFTA lobbying efforts, and theannouncement that the alliance would befunded in part by a $700,000 donationfrom the United States Agency forInternational Development (USAID).The donation will be made up of$75,000 paid directly to the alliance and$75,000 to fund pro-CAFTA efforts ineach Central American country.Nicaragua, which on Oct. 5 becamethe first Central American country to presentthe CAFTA text to its Congress, iswidely expected to be the first to approvethe agreement as well, perhaps even aheadof the United States.“The Nicaraguans will approve CAFTAwithin 90 days,” Denton predicted.In Nicaragua, the text is currently in aspecial nine-member congressional commission,which includes former Sandinistapresident and deputy Daniel Ortega.NICARAGUAN President EnriqueBolaños estimates that the Nicaraguaneconomy during the first five years ofCAFTA could grow by 8% annually –double the country’s current economicgrowth projection.“We hope that this strong advantageobtained by President Bush and his partywill accelerate the process of approvingCAFTA in U.S. Congress,” said NormanCaldera, Nicaragua’s Foreign Minister.Denton said El Salvador will not be farbehind in approving the pact.Eduardo Ayala, El Salvador’s viceministerof economy, told the wire serviceEFE that in a Washington, D.C. meetingTuesday including his counterparts inother Central American countries and theDominican Republic, as well as representativesfrom the U.S. Trade Representative’sOffice, he sought recommendationsfor pro-CAFTA lobbying strategies.DURING the videoconference, FedericoSacasa, executive director ofCaribbean-Central American Action(CCAA), said from Guatemala that hehopes all Central American countries willapprove CAFTA by the end of the firsttrimester of 2005.Costa Rica’s ability to approve theagreement by then appears unlikely, sinceit has not even been submitted to Congress.Liliana Salas, secretary of the commissioncharged with evaluating CAFTAbefore it is voted on, has said the commissionwould need at least nine months toreview the text before it can submit it tothe main floor for debate (TT, July 9).It would not be the first time CostaRica has required more time than itsCentral American neighbors to considerthe free-trade agreement. In December2003, when the other nations finished theirnegotiations with the United States, CostaRica said it needed more time (TT, Dec.19, 2003). Negotiations eventually concludedin January (TT, Jan. 30).According to Denton, the Costa Ricangovernment will feel the squeeze if itbecomes the lone CAFTA holdout.“I don’t think the U.S. will passCAFTA until April or May, but when itdoes, enormous pressure will be put onCosta Rica,” he said.(Tico Times Nicaragua correspondent TimRogers contributed to this report.)


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