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Costa Rica industries urge government to freeze free-trade plan with China

June 12, 2009

As Costa Rica went into Day 2 of the third round of negotiations toward free trade with China on Tuesday, the Tico delegation appeared to lose support from several important national sectors.

Leaders of Costa Rica´s industrial, food, metals and other markets have announced they reject the proposed free-trade agreement (FTA) with China, on the basis of a lack of trust in, and competitive edge against the Asian giant.

“Costa Rican industry rejects the government´s unfortunate decision to initiate negotiations with China,” said Juan María González, president of the Costa Rica Chamber of Industries (CICR).

“Costa Rica´s international commerce has always been based on trust and not opportunism. China is not a trusted partner and Costa Rica is taking a serious risk,” said González, one day after the third round of free-trade talks initiated in San José.

The industrial leader stressed that certain Chinese products are of a lesser quality and don´t meet health standards, pointing to the mass recall last year of goods that contained milk or milk-derived ingredients made in China.

But there´s another concern for Tico industry. Under an FTA, the Costa Rican industrial sector is bracing itself for a potential onslaught of goods manufactured at lower costs in China, which could enter the market duty free and sell for less than their local counterparts.

González said the industrial sector comprises 75 percent of Costa Rican exports and almost a quarter of gross domestic product, as well as offering employment to some 250,000 people.

Instead of free trade, the chamber is urging the government to seek a partial trade alliance with China, with adequate safeguards for sectors that would be most vulnerable in direct competition with Chinese goods.

Upon initiating this negotiation round, Costa Rica´s chief negotiator, Fernando Ocampo, told reporters a Tico market safeguard has already been presented to the Chinese.

As of Monday, the San José delegation had not put such sectors as textiles, plastics or metals on the negotiating table. All told, the Ticos have offered to open 70 percent of markets for free trade with China, which the Chinese delegation views as insufficient compared with their proposal of 94 percent. However, China has so far excluded basic goods such as sugar and chicken, pork and beef from the talks.

Despite the Costa Rican team´s efforts to protect certain industries, leaders of some of this country´s sectors made a public plea for Costa Rica to change its course with China.

Besides CICR, representatives from the Food Industry Chamber and guilds from the plastic, mechanical and metalworkers industries attended the press conference Tuesday, each voicing support for withdrawing from a free-trade pact.

The third round of trade talks come to a close on Wednesday.

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