President Oscar Arias began talking with his political friends and foes this week to negotiate laws implementing the Central American Free-Trade Agreement with the United States (CAFTA), which scored a narrow but clear win Sunday in the country’s first referendum.
“How I wish the antagonism would turn into compromise so the country could resolve its problems,”Arias said in a speech Sunday. The executive branch and the anti-CAFTA Citizen Action Party (PAC) did reach an understanding this week in a meeting at Casa Presidencial. PAC faction head Elizabeth Fonseca said the party would not thwart progress on the 12 laws required to implement the treaty. Presidency Minister Rodrigo Arias and National Liberation Party (PLN) faction head Mayi Antillón said they would listen to PAC’s ideas on how to change those laws.
Also at the meeting were PAC assistant head Rafael Madrigal and several members of the President’s cabinet.
The 12 laws are controversial because they implement the most divisive parts of CAFTA. Two bills would take monopolies away from the Costa Rican Electricity Institute (ICE) and the National Insurance Institute (INS). Other bills would modernize these sectors, regulate foreign businesses, reform intellectual property rights laws, and reform the Criminal Code to crack down on corruption.
Politicians on both sides say the deadline for passing these laws is Feb. 29, two years after CAFTA went into effect in the first signatory country, El Salvador, though Costa Rica could request an extension with the approval of all CAFTA members.
Fonseca said the party would vote against the laws and pass motions to lessen their harmful impact.
“We will… make suggestions so that they do not go one millimeter beyond what the treaty requires,” Fonseca said.
But motions would stall the bills, jeopardizing their passage before March, and Fonseca has said she feels no pressure from that deadline. The Arias brothers held a flurry of meetings this week with members of the five pro-CAFTA factions to plan a strategy to pass the bills in time.
Liberation’s Antillón said the factions will likely schedule additional morning sessions and apply a fast-track procedure to some laws to limit debate. Both moves require 38 votes – exactly the number of pro-CAFTA legislators in Congress. The President could also push these laws during the “extraordinary session” from Dec. 1 to April 30, when he has the power to decide the legislative agenda.
Still, Antillón says, time is tight. The 12 laws include three international accords, which must be analyzed by the Constitutional Chamber of the Supreme Court (Sala IV), which could take as long as a month after the assembly approves them in first debate.
Plus, the 12 laws cannot be discussed during November afternoon sessions, which are reserved by law for discussion and approval of the budget.
“We have a very tight, very complex agenda,” Antillón said.
Of the 12 laws, only the three international agreements are set in stone, said a Liberation advisor. The other nine laws are required in some form to put Costa Rica in compliance with the treaty. But they can and should be open to negotiation, said Jorge Vargas, assistant director of the State of the Nation program.
“CAFTA says we have to open (monopolies), but it does not say what type of opening.
There are a lot of possibilities,” Vargas said. “Half the country rejected the treaty and they cannot be ignored.”
Overtures and Proposals
In an apparent show of good will, the executive branch has offered to involve PAC in negotiations on a free-trade agreement between Central America and the European Union which begin Oct. 22. Fonseca expressed interest, and Foreign Trade Minister Marco Vinicio Ruiz invited PAC to an informational meeting.
Minister Arias said the government is also open to discussing a broader social agenda for the assembly. In the meeting Wednesday with Fonseca, there was consensus on the need for a range of development and security bills, Arias said.
These include reforms to the Transit Law, reforms to the Immigration Law and a law to establish a development bank for small and medium-sized businesses.
PAC has also proposed a separate “mitigation agenda” to lessen what Fonseca dubs the treaty’s harmful effects. The agenda includes paying the government’s debt to the Social Security System (Caja), offering subsidies to farmers and small businesses, and spending 8% of the gross domestic product (GDP) on education and 1% of the GDP on science and technology.
“PAC has always been proactive,” Fonseca said, rejecting the common allegation that the party is obstructionist.
Still, Antillón said any social agenda should wait until March 1, after the deadline for passing the CAFTA implementation laws.
“It would be demagoguery to say we could pass the implementation laws, the budget and a development agenda” before March, Antillón said.
Meanwhile, PAC is reaching out to its fractured base. In her meeting with the Arias brothers, Fonseca suggested that the President talk with other social and political leaders from the anti-CAFTA movement.
“We cannot speak for them in the dialogue process that this country needs,” she said in a statement.
José Miguel Corrales, a movement leader and former Liberation party member, said CAFTA opponents have spent hours this week in meetings venting and pointing fingers.
Corrales does not recognize the referendum’s results. He says companies threatened voters with promises to relocate, the United States manipulated them with ominous statements and the president bribed them with public works projects.
Corrales also criticized PAC for putting up a weak fight against the implementation laws. “What will happen with the people who saw PAC as their political arm, ready to fight CAFTA in the Legislative Assembly?” Corrales asked.