CAFTA ‘Studies’ Contain Questionable Predictions
Five thousand families will lose their livelihoods in the eastern province of Cartago. A whopping $70 million in orange juice exports to the United States will be lost. A 300% tariff will be levied on Costa Rican pineapples headed to the northern market.
These are the results so far of a series of “studies” being released by the Economy, Industry and Commerce Ministry (MEIC) that spell out dire economic consequences if the Central American Free-Trade Agreement with the United States (CAFTA) is shot down in October’s referendum.
The statements are part of an ongoing series conducted by the Arias administration dubbed “CAFTA: The Day After.”
“With the situation that this country is facing, it’s worth asking what would happen one day after NOT approving CAFTA; the answer is very simple,” said one of the statements.
Except, it’s not.
The tariffs the studies mention wouldn’t be levied the day after CAFTA is shot down, as the studies suggest. Instead, they would take effect only if the Caribbean Basin Initiative (CBI), which gives Costa Rican goods preferential access to the U.S. market, is canceled.
The CBI gives all the Costa Rican agricultural goods mentioned in the studies full access to the U.S. market. And the United States has never given any indication that it would cancel the CBI benefits and levy tariffs the day after CAFTA is shot down (TT, Feb. 9).
‘A Logical Study’
The “studies” themselves are not as sweeping as the conclusions they draw either. MEIC conducted them by examining the financial data of a few large companies in a particular region, then generalizing over the affected population, ministry spokeswoman Melissa Molina told The Tico Times.
From there, they draw conclusions about how hypothetical tariffs on Costa Rican goods would affect jobs in Costa Rica, without treating any of the intricacies of the international markets on which those goods are traded.
“It’s not an in-depth study,”Molina said. “It’s more of a logical study.”
The first “study,” announced May 22, found that 5,000 families in the Oreamuno de Cartago region east of San José would lose their jobs if CAFTA is not approved, because the region’s main export –“mini-vegetables” – would be subject to a 17% tariff to enter the United States, and 74% of their products is destined for that market.
Ironically, that same week, agricultural officials from Trinidad and Tobago visited the country to talk with their Costa Rican counterparts about importing more fresh vegetables from Costa Rica (TT, June 1).
The second “study,” announced a week later, claims that orange juice producers would be subject to a 19% tariff the day after CAFTA is shot down, which would cause $70 million in losses and ruin the livelihoods of 4,000 families.
The third “study,” announced June 7, found that new tariffs of up to 300% on Costa Rican pineapple would endanger $250 million of the country’s exports.
All three studies were introduced at press conferences held at Casa Presidencial.
The Tico Times repeatedly requested to review the background of the studies, but the Economy Ministry refused to release the details, including sources, methodology, authorship – and the names of the companies that participated.
A press lawyer consulted by The Tico Times said he saw no legal reason for that information to be withheld.
In the end, however, the details sought may not even exist.
Two of the “studies” were posted on MEIC’s Web site (www.meic.go.cr), but they take the form of PowerPoint presentations and contain almost no information outside the original press releases.