Trade Talks With China Make Slow Progress

Heading a team of about 70 negotiators, Fernando Ocampo knows he’s not only dealing with a quickly rising economic superpower from the East but he also faces stiff opposition to a free-trade agreement (FTA) with China at home.

This week, on the sidelines of the third round of negotiations outside San José, leading Tico business associations publicly rejected the proposed FTA, claiming China “is not a trusted partner” and expressing fears of insuperable competition from an onslaught of the Asian giant’s goods and services.

Should the talks succeed, Costa Rica would become the third Latin American country – after Chile and Peru – to enter into an FTA with China.

Ocampo spoke to The Tico Times about the negotiations. The government this month celebrated two years since reestablishing diplomatic relations with China.

TT: One more round of negotiations done. Where do the talks with China stand now?

FC: I think we’re halfway through the negotiations. We’ve exchanged two offers on issues including goods and services. As a result of this round, we’ve seen major progress in discussions about the norms (of an FTA). There are only three or four sections of norms remaining (to discuss). We’re hoping that during the next round, which will be in Beijing the week of September 15, we’ll be closing some of those chapters.

Which sectors are you discussing opening up?

In the area of goods, it includes both agricultural and industrial products; in services, (it includes) telecommunications, computers, medical service, tourism, among others.

You proposed a safeguard plan for Costa Rica’s vulnerable markets, which China turned down. How would it have worked?

There has to be some kind of mechanism to protect the country’s sensitive sectors. We proposed having a mechanism which would involve raising tariffs (on a particular product) if there was a significant increase in imports (of the product). Obviously China said they prefer not to have any instruments in place that would restrict commerce, but they knew they had to understand the sensitivities that exist in this country.

Has China made a satisfactory counterproposal in this regard?

Well, it’s still on the negotiating table. We have some other ideas we plan to present, because the important thing is ultimately clarifying that the sensitive sectors are protected.

What are the sensitive sectors? Several sectors have expressed sensitivity, (including) rice growers, textiles, metalwork, plastic products. The idea is to continue working with them to find the best outcome that allows them to feel better about these negotiations.

How much of the national market have you proposed to open to free trade with China?

On the table is an offering of 78 percent of tariff lines for up to 10 years. China has proposed 94 percent.

Why the disparity?

There are different negotiation styles. By the end of the process we’ll have similar percentages. Costa Rica carried out a widereaching consultation process with the sectors of production. We’ve had many meetings with them and we will continue holding conversations with them.

How will you proceed when important industries have publicly stated they reject this FTA?

In every negotiation there are sectors that feel concerns, and that’s been expressed. I think that’s natural. What’s important is for them to approach the (government) ministries and together we’ll talk about the best alternatives for each of their products.

How many rounds do you expect the talks to take?

Six negotiation rounds. The goal is still to finish by the end of this year.

What’s the next step?

Before the next round in Beijing, we’ll be making a new offer in goods and services, depending on the outcome of conversations with the different sectors of production. I’m certain we will present a better offer.

China has pressed Costa Rica to up its ante to 90 percent. Is that feasible?

We’ve discussed (going up to) 90 percent but that figure will depend on the negotiations. (Ninety percent) is the objective but first we’re going to have to continue talking with the sectors.