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Free Trade Still Dominates Political Agenda

A free-trade treaty and a United Nations Security Council seat will focus political attention this year on issues that extend beyond Costa Rica’s borders.

As legislators scurry to pass bills implementing the Central American Free-Trade Agreement with the United States (CAFTA), the Foreign Ministry will push Arias’ global agenda in the United Nations.

Domestically, the administration will continue its war on poverty and try to push long-awaited bills to reform immigration, taxes and traffic laws.

Hafta Pass CAFTA

Legislators have until Feb. 28 to pass nine laws that would put Costa Rica in compliance with CAFTA.

Prospects are dim. The package includes controversial proposals to strengthen intellectual property laws and open state monopolies on telecommunications and insurance.

The anti-CAFTA Citizen Action Party (PAC) will challenge the constitutionality of most of these bills before the Constitutional Chamber of the Supreme Court (Sala IV), which would slow their progress by a month.

Costa Rica will likely have to request an extension from the treaty’s other signers – the United States, Guatemala, El Salvador, Honduras, Nicaragua and the Dominican Republic.

A Platform for Peace

Costa Rica begins a two-year term on the U.N. Security Council this year with ambitious goals.

Foreign Minister Bruno Stagno has said he will push for nuclear nonproliferation, disarmament, human rights, and changes in the council’s operations. High on his list is the Costa Rican Consensus, an idea of President Oscar Arias that donor countries and institutions should reward nations that decrease arms spending.

It remains to be seen whether Costa Rica can persuade the council’s 14 other members to put this initiative on an already-packed agenda. Meanwhile, the council may tackle sticky issues that force Costa Rica to chose between its values, such as international law and human rights, and its allies, such as China and the United States.

Rich Man, Poor Man

The country will learn later this year whether last year’s striking drop in poverty was a temporary dip or part of a trend. After hovering around 20% for 13 years, poverty rates dropped last year to 16.7%.

When the National Statistics and Census Institute (INEC) releases its annual survey numbers in July, officials will also see whether the apparent trend toward increasing economic inequality is continuing.

Meanwhile, Arias’ administration will pour more resources into the fight against poverty. The Housing Ministry, which runs the administration’s anti-poverty programs, will see a 368% budget increase this year.

Red Tape and Bloody Roads

Once the CAFTA bills are passed in some form, legislators will begin discussing long-delayed proposals for economic and social reform.

These bills would ease applications for residency, tax homes worth more than about $200,000, decrease red tape for public works concessions, and create a lending bank for small and medium-sized producers.

Another proposal, pushed heavily by the executive branch and families of traffic accident victims, would reform traffic laws to address the rising death toll on the nation’s roads and highways.

Loving Thy Neighbor

After two tepid meetings last year, President Oscar Arias and his ideological and personal rival, Nicaraguan President Daniel Ortega, will continue to work toward elusive consensus.

The presidents are planning to meet in Nicaragua this month to discuss tourism and the environment, among other issues. They must also negotiate Nicaragua’s $630 million debt to Costa Rica, which Ortega said he cannot fully pay and Arias said he cannot fully forgive.

Meanwhile, Costa Rica will continue fighting a case against Nicaragua in the International Court of Justice in the Hague over navigation rights to the San Juan River, which separates the two countries.



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