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U.S. Ambassador: CAFTA Critics Misinformed

Just nine months after U.S. Ambassador Mark Langdale’s first interview with The Tico Times, elections in the United States and Central America have made for big political changes as Langdale adjusts to his new home.

For the self-proclaimed “free-marketista” who welcomes change and economic development, that’s just fine.

Since U.S. President George W. Bush appointed him a year ago, Langdale, 52, has seen the election and inauguration of Costa Rican President Oscar Arias, a free-trade advocate with a pro-business platform and a history of criticizing the United States.

In Nicaragua, Daniel Ortega defeated a U.S.-backed presidential candidate in elections closely watched in Washington, D.C., as some feared Ortega’s election could mean more risk for Central America. Back home, Democratic victories in the House and Senate changed the panorama for future trade negotiations.

Having left behind his ranch in Texas –where he used to be neighbors with the likes of Bush, Texas tycoon Mark Cuban and bizarre basketball star Dennis Rodman – the University of Texas graduate is trying to tone down his twang and touch up on his Tico with his personal Spanish tutor. He used to go on fishing trips with Bush, his old buddy and next-door neighbor. Now he’s learning to body surf with the likes of Intel manager Bill Abrahams.

The former tourism exec, who saw the benefits of the North American Free-Trade Agreement (NAFTA) as he made his way through the Mexican tourism industry, says the Costa Rican tourism industry’s recent struggles aren’t anything to be concerned about, just “growing pains.”

But Costa Rica could face real problems if it doesn’t pass the Central American Free-Trade Agreement with the United States (CAFTA), he says. Costa Rica’s the only country that hasn’t ratified the pact, signed in 2003, and though the agreement is inching through the assembly, its March 2008 deadline is looming ever closer.

Finding no reason why Costa Rica shouldn’t ratify the trade pact, he says “momentum is building” for its approval.

The Tico Times had a chance to sit down with Langdale in his well-guarded office Tuesday and talk about his first year in Costa Rica. Excerpts:

TT:When we met in February,we didn’t yet know who the president was going to be. How have you viewed Arias’ course of government so far?

ML: I’m very impressed with his first six months.He’s a brilliant guy who is dedicated to public service and he’s got a huge challenge with 75% of kids not graduating from high school. That’s the future of Costa Rica right there in his hands… (In the Caribbean port city Limón) you had a very small group of people who are frankly pretty well paid and pretty privileged who were taking advantage of the strangle-hold they have on the port system, and I think President Arias did the right thing in opening up the ports and getting them going again.

What does Ortega’s win in Nicaragua mean for the region?

The jury’s out on that. There’s a lot of concern about Ortega because he’s a man with a track record, and the track record is a horrible one. During the five years he was in power, Nicaragua lost 90% of its gross domestic product. That being said, there was an election process in Nicaragua, he appears to be the winner in a relatively calm and clean election … I guess there’s always an opportunity for redemption.

Nicaraguans seemed quite worried about whether the United States would interfere with remittances from relatives abroad. [Before the elections, four Republican congressmen publicly urged the government to suspend remittances (NT, Nov. 10).]

The U.S. government wants Latin America to have democratic governments that deliver the goods for poor people. That’s really all we want. So the idea that we would cut off remittances because of some spite would be totally contrary to our foreign policy principles in the region. It was a total somethin’ made up to scare people a few days before the election.

Former Costa Rican Ambassador to the United States and Hudson Institute fellow Jaime Daremblum said the first thing investors look at in a country is the telecommunications industry. Is that true? If so, what does that mean for Costa Rica?

The current state of the telecommunications sector in Costa Rica is a real impediment to foreign investment. It’s unfortunate because the advances of technology are also the advances that are benefiting poor people the most. In India, Bangladesh, even in Africa, the poorest of the poor are able to get plugged into markets and share information, because they have access to low-cost, ubiquitous wireless access. They don’t have that in Costa Rica.

There’s a lot of discussion about (the state telecom company’s) successes in the past of providing wireless services to rural areas, but that’s sorta like screaming about a good grade you got in the 5th grade. Costa Rica is one of only seven countries in the world that still has a state telecom monopoly. It’s in company with North Korea, Cuba, Saudi Arabia… not a group you want to be in.

What do you think about the anti-CAFTA protestors who claim the United States will impinge upon Costa Rican sovereignty?

They’re not getting a good education at their university. There’s so much misinformation out there about CAFTA that we just laugh about it. Every other country that was part of the CAFTA group has already passed it, and the world’s not coming to an end.

I think Costa Rica is gonna be the biggest beneficiary of CAFTA of all the CAFTA countries, because it’s the farthest along the development spectrum.

Who’s really opposed to CAFTA? The people who are really opposed to it, making the most noise, are a few privileged groups: basically, unions affiliated with state monopolies that are gonna lose their privileges.

In the United States, the Democrats have taken power in the House and Senate. What does that mean for Bush’s foreign policy of free trade and how may that affect Costa Rica?

It shouldn’t have any impact on the implementation of CAFTA – as long as Costa Rica takes advantages of the benefits of that treaty before its option expires, which is March 1, 2008… as long as they comply with the terms of the treaty and join the rest of the CAFTA countries.

The Democratic Party has a much stronger trade protectionist bent than the Republican Party… The pendulum of trade protectionism seems to be swinging in the other direction. That’s not good for Costa Rica. (The Caribbean Basin Initiative is) a temporary benefit that Congress could take away at any moment, which makes it difficult for foreign investors to make a long-term commitment to Costa Rica.Costa Rica has the chance, along with other CAFTA countries, to make permanent that access to the largest consumer market in the world – that’s 50% of their economy – and eliminate the risk of someday the U.S. Congress waking up, (seeing) the mood of the people changing, and saying, we want to close our borders to trade.

Are there are any plans to increase U.S. foreign aid in the region?

You take 2005: U.S. foreign aid to Latin America totaled $1.5 billion. Under the Bush administration foreign aid has actually tripled (to about) $28 billion a year. But foreign investment in 2005 in Latin America was $500 billion and growing.

That is where the action is. The action’s in trade not aid. The answer for Costa Rica’s problems is really in attracting foreign investment and stimulating trade. That’s gonna dwarf thousands and thousands of times over anything that Costa Rica will ever receive in foreign aid.

Tourism growth is slowing compared to last year.Why?

Costa Rica is going through a transition in its hotel stock. There’s a lot of capital investment going into new hotels, larger hotels, more modern hotels that kind of meet the expectations of the larger traveling public and those aren’t quite ready yet … But I’m not concerned about it. I’d call it growing pains.

What did you learn from Bush as his neighbor?

You know, he’s really a tell-it-like-it-is kinda guy. Plain spoken. I think that’s a real good trait. The other thing I learned from him was the importance and satisfaction you get from really doing public service, and he got that from his father. I probably would not have done this without that example.



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