By Ashley Harrell, Lindsay Fendt and Alberto Font
Tico Times staff
Trade
According to the White House, the purpose of Obama’s trip is to “reinforce the deep cultural, familial, and economic ties that so many Americans share with Mexico and Central America.” So let’s make Orwell proud and translate this from politi-speak into plain English. Obama is coming on business.
At the doorstep of the Trans-Pacific Partnership (TPP) – an ambitious free trade agreement among 11 countries that could eventually include Costa Rica – he wants to engage Central America. Why? Here’s one possibility.
“Central America is the least developed of the North American and Central American countries,” James R. Jones, a former U.S. Ambassador to Mexico, said in a recent panel discussion on Obama’s visit held by the Council of the Americas. “They provide a necessary part of the economic equation if you are competing with India and China.”
And what necessary part is that, exactly? Jones didn’t say. But in the same discussion, Americas Society Chairman and former ambassador to Mexico and Honduras John Negroponte referenced a benefit involving the “supply chain,” in other words, cheap labor. Negroponte also said that bringing Latin America to the table would increase competitiveness of the entire region.
Although the U.S. and Central America engage in a certain amount of free trade via the U.S.-Central America Free Trade Agreement, or CAFTA, that agreement is still limited in scope. Further opening the region would give the U.S. increased access to Central America’s cheaper labor market, and it would put the U.S. in “a leadership role in promoting entry by its Latin American partners,” according to a recent article in Americas Quarterly entitled, “The Next Big Thing? The Trans-Pacific Partnership & Latin America.”
Costa Rica’s Foreign Trade Minister Anabel González doesn’t seem to have a problem with that. At a recent press conference, González said she hopes Obama’s visit will help promote Costa Rica on a more global scale, and that she will use the visit to lobby for entrance into the TPP.
“The results of CAFTA, since it came into effect in 2006, have been extremely positive,” she said. Trade between the U.S. and Costa Rica has grown 8 percent each year since 2006, she said, jumping from $30 billion in 2005 to $61 billion in 2012.
But not everybody is thrilled with the idea of upping economic ties with U.S. – already Costa Rica’s principal trading and investment partner. “Most Costa Rican people do not want to be considered as a part of the United States’ backyard,” explained a recent open letter to Obama from the Association of Public and Private Employees. The letter added that CAFTA had disproportionately benefitted the U.S. and done little to help the people of Costa Rica.
Security
With the highest homicide rates in the world outside of war zones, Central America faces major security challenges. But while security makes the cut for topics the regional presidents will touch on, the fact is, not much has changed in recent years in terms of policy and spending.
The U.S. is already deeply involved with security in both Mexico and Central America, having committed $496 million to the Central American Regional Security Initiative (CARSI) since 2008, and $1.9 billion in Mexico through the Merida Initiative from 2007 to 2010.
“While many countries will use this opportunity to ask the United States to commit more money to citizen security, the Obama administration will likely point to the fact that the United States has already given millions and plans to give millions more,” Washington Office on Latin America Program Director Geoff Thale said in a press release.
According to Costa Rican Public Security Minister Mario Zamora, the discussion of new bilateral security projects is not on the agenda; rather, Costa Rica hopes to use the opportunity to show off the initiatives already in progress. U.S. officials also are downplaying the significance of the summit as a forum to discuss new regional security programs, instead focusing on trade and energy, with security as a backdrop.
Some analysts, however, feel that a lack of cohesion among Central America’s business sectors could bring talks back to security as a default topic.
“This is a great opportunity for us to work together on the projects already in development,” Zamora said. “We are grateful for international assistance, but we understand that we are first and foremost responsible for our own security.”
Reinforcing U.S. security policies was especially important in Mexico, where newly elected President Enrique Peña Nieto has indicated a possible shift away from a U.S.-backed drug policy that has left more than 60,000 dead and 20,000 disappeared during the six-year administration of former President Felipe Calderón.
“I agreed to continue our close cooperation on security,” Obama said in a press conference Thursday. “It is obviously up to the Mexican people to determine their security structures and how it engages with other nations, including the United States.”
While Costa Rica has generally towed the line for the U.S. strategy on responding to international drug trafficking – with an estimated 90 percent of South American cocaine passing through the region on its way to U.S. consumers – at least one other country attending the SICA conference is open to other ideas. Guatemalan President Otto Pérez Molina, for example, has been an outspoken advocate for the legalization of marijuana and cocaine, a tactic the Obama administration has refused to consider.
Far from a new approach, the Obama administration has transplanted the same model of fighting illicit drug trafficking that past administrations used in Mexico, with the Mérida Initiative, in Colombia, with Plan Colombia, and in Central America with CARSI.
The U.S. State Department has outlined five goals for the region: to create safe streets for Central American citizens, interrupt the transit of drugs and criminals within the region, help develop strong and capable governments in the region, increase security presence in the region and facilitate coordination between governments in the region. According to U.S. officials, there has been progress towards these goals, but CARSI needs more time.
“While I don’t suggest that the program has been brought to a successful conclusion, I do suggest it is now having an impact, much of it positive,” said William Brownfield, assistant secretary for the U.S. State Department’s Bureau of International Narcotics and Law Enforcement Affairs in a speech in March.
Rather than announcing a change of policy, Obama will likely use the trip to reaffirm and strengthen the current strategy already employed, and to reinforce CARSI’s goal of regional coordination under the umbrella of SICA.
“The United States will stress the need for more coordination among the countries in Central America to work together on citizen security,” the Washington Office on Latin America’s Thale said.
Energy
Energy is another important issue for the U.S., which hopes to reduce its dependence on petroleum, and Costa Rica, which hopes to take advantage of its bountiful sources of renewable energy. More than 90 percent of Costa Rica’s energy comes from renewable sources, and the country hopes to attract U.S. investment to that sector.
Costa Rican Environment Ministry officials will meet with the State Department’s special envoy and coordinator for international energy affairs, Carlos Pascual, prior to the presidents’ meeting.
Pascual will meet with Costa Rican Environment Minister René Castro on Friday morning, along with Inter-American Development Bank officials, who are supporting a study of the effects of climate change on energy generation in the country. The meeting will be held at INCAE Business School, outside of San José.
In the afternoon, Pascual will participate in an energy panel sponsored by INCAE with members of the energy and business sectors in the region. Officials will present their recommendations to Obama and other presidents on Saturday.
“We know that the government of the United States is interested in promoting investment in energy, while as a region, we would like to import natural gas, and that will be part of the discussions we’ll have during Friday’s meeting,” Castro said.
In an interview with the daily La Nación, U.S. Ambassador to Costa Rica Anne S. Andrew said the Obama administration is looking for more opportunities for U.S. companies to invest in cleaner energy development in Costa Rica and Central America.
Last week, Castro announced other items on his agenda for discussion with the U.S., including research in Costa Rica for hydrogen production as an alternative fuel source, primarily for transportation sectors. That research is being conducted by Ad Astra Rocket Company, founded by Tico astronaut Franklin Chang, and the U.S. company Cummings.
“In Costa Rica we can do research and development as well as they can in the U.S. So we have no excuse not to be on the same level technologically as any place in the world,” Chang told The Tico Times. “Once you can produce hydrogen basically everywhere, then you would have access to a fuel that you could use in transportation.”
Costa Rica also will propose a Central American alliance to import liquid natural gas from the U.S. Past attempts by Costa Rica to import LNG failed because alone, the market is too small and prices are too costly.
“We’re going to explore the possibility of unifying a regional demand [for LNG], in order to become a more attractive market and to secure better prices,” Castro said.
Central America’s business sector also will propose a natural gas pipeline stretching from Mexico to Panama, the Associated Press reported.
That proposal aims to reduce energy costs and make Central America more competitive.
Follow wordpress-257819-2837440.cloudwaysapps.com for updates during the two-day presidential summit.
