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Solís Wants to Renegotiate Trade Agreement

CAN the Central America Free-Trade Agreement (CAFTA) be renegotiated with the United States?

That’s the hope of former presidential candidate and Citizen Action Party leader Ottón Solís.

Solís has asked U.S. legislators, including Democratic presidential candidate and Senator John Kerry of Massachusetts, to renegotiate several parts of the free-trade agreement.

Solís says Citizen Action is not opposed to signing a trade agreement with the United States, but disagrees with CAFTA in its current form. He said he is confident key areas of the treaty can be renegotiated to make them fair for Costa Rica.

TO lobby in favor of his proposal, Solís traveled to WashingtonD.C. March 24-26 to meet with legislators and take part in a series of debates.

“The goal of the trip was to explore the possibility of renegotiating the free-trade agreement,” Solís told reporters on Monday.

“As a party, Citizen Action has well-founded doubts about the treaty in its current form.

We are in favor of rescuing the good parts of the treaty, but seek to renegotiate to rectify and improve its weaknesses.’’

During his trip, Solís met with three congressmen from both sides of the aisle and the economic and trade policy advisors of 10 influential legislators, including Kerry.

During this week’s press conference, Solís gave reporters a copy of a letter he sent to Kerry on March 4, urging him to reconsider CAFTA.

“THIS agreement could have served as a very positive factor in the economic and political development of our region,” Solís wrote. “The belief held by most at the onset was that CAFTA was seen by the United States as more than just a short-term opportunity to gain market access for a few multinational companies in Central America.”

“…However, given the way CAFTAwas negotiated, it could adversely affect our economic and social development, thereby increasing the flow of migrant labor to the United States,” he said.

Contrary to optimistic reports issued by Costa Rican Foreign Trade Minister Alberto Trejos two weeks ago following a lobbying mission to Washington by Central America’s foreign ministers, aimed at generating support for CAFTA (TT, April 2), Solís described the treaty’s immediate future on Capitol Hill as “uncertain.”

BASED on his meetings with representatives, Solís concluded CAFTA would not be voted on by U.S. legislators until after the November 2004 presidential elections.

These opinions were echoed in an article published on March 26 by the American International Automobile Dealers Association, a lobbying group dedicated to protecting interests of international vehicle dealerships.

The report stated CAFTA would face stiff opposition from organized labor and textile and sugar industries. It also said that U.S. public opinion had been tilted against trade in part due to growing concerns over outsourcing of U.S. jobs.

THE main problem with CAFTA is  itlacks provisions that would grant temporary work permits for Central American workers, Solís said. A little flexibility on the part of the United States in terms of labor mobility would go a long way toward making CAFTA a balanced development tool, he added.

In its current form, CAFTA will create opportunities for U.S. companies in the areas where they are most competitive – telecommunications, insurance, financial services and industry. However, it won’t allow Central America to take advantage of its main competitive advantage – its abundant and relatively cheap labor force, Solís said.

Work permits are a win-win situation, according to Solís. U.S. companies could benefit by having access to more workers, and the families of Central Americans working in the United States would immediately benefit from remittances. Additional gains would be obtained once workers return to their home countries and begin applying their newly acquired skills in local businesses, the Citizen Action Party leader said.

“IF there was globalization in the Central American labor market toward the United States and there was no interference, I would be in favor of CAFTA in its current form,” Solís said.

Solís also expressed concerns over agriculture under CAFTA. He considers it unfair for Central American farmers to be required to compete against subsidized U.S. exports of rice, milk and other staples.

He also criticized the intellectual property rights chapter, which would impose stricter protection of patented drugs and agro-chemicals. Solís claims the chapter will favor the interests of a “handful of multinational firms” over those of the region’s population.

CITIZEN Action Party, the country’s third largest political party, which controls eight of the Legislative Assembly’s 57 seats, is conditioning its support for CAFTAon the renegotiation of the treaty.

Despite claims by trade officials and experts on the matter that the contents of the treaty have already been agreed upon by all sides and are not open to negotiation, Solís is confident the CAFTA texts can be renegotiated if there is a general consensus by all seven countries involved.

Guatemala, El Salvador, Honduras and Nicaragua finished negotiating with the United States last December (TT, Dec. 19, 2003). Costa Rica finished in January (TT, Jan. 30).

The Dominican Republic, which began negotiating with the United States earlier this year, was incorporated into CAFTA last month (TT, April 2). The agreement is expected to be signed in May. After that, it will be sent to the legislative organs of each country to be approved or rejected, but not modified.

“Renegotiating becomes feasible if doubts about the treaty are expressed publicly by the people of Costa Rica and the other participating countries,” Solís said.

SOLÍS blasted the government and pro-CAFTA legislators for not wanting to discuss the issues.

He said Costa Rican voters had not been given an opportunity to express their opinion on CAFTA. Crucial reforms, such as the opening of the country’s telecommunications and insurance monopolies, were not part of the current government’s campaign platform and lack the pledged support of a majority of Costa Ricans.

Solís admitted it would be difficult to renegotiate the treaty, given that “the majority” of deputies are in favor of CAFTA.

Still, as long as the treaty remains unmodified, Citizen Action’s eight congressional deputies will reject CAFTA, he said.



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