Costa Rica Has No `Plan
B' for U.S. Free Trade
Deal
By Carlos Manuel
Rodriguez and Bill
Faries
(Bloomberg)
- Costa Rican President
Oscar Arias Sanchez said
his country's us$21.5
billion economy will
lose investment and jobs
if voters don't back a
free trade accord with
the U.S. in a national
referendum on Oct. 7.
The free trade
agreement, part of a
deal the U.S. negotiated
with five Central
American nations and the
Dominican Republic, is a
``passport'' to future
trade accords with the
European Union and
China, Arias said during
an interview this week
at the presidential
palace in San Jose.
Arias, 67, has banked
much of his political
agenda on passage of the
accord, known as CAFTA-DR,
as polls show declining
support for the
agreement. A rejection
of the treaty would
endanger proposals to
end monopolies in the
telecommunications and
insurance sectors and
hobble plans to boost
trade ties with the
European Union and
China, Arias said.
``There is no `Plan
B,''' Arias said.
``Don't fool yourselves.
Without a doubt, we'll
grow less, we'll
generate fewer jobs and
we'll have less tax
revenue without this
treaty.''
Costa Rica exported
us$3.2 billion worth of
goods and services,
including medical
equipment and fruit, to
the U.S. last year,
representing 39 percent
of total exports, Costa
Rica's Ministry of
Foreign Trade said on
its Web site. The nation
ran a trade deficit of
about us$1.4 billion
with the U.S. last year,
the seventh straight
year imports outpaced
exports.
``Costa Rica needs this
for its development,''
Arias, winner of the
1987 Nobel Peace Prize,
said. ``Businessmen are
telling me that if we
don't have a free trade
deal, they will invest
in other countries in
Central America.''
Costa Rica will discuss
a possible free trade
agreement and sale of up
to us$350 million worth
of bonds to China during
a visit by Arias to the
country next month.
A poll by Unimer
Research International
showed 49 percent of
Costa Ricans favor the
treaty while 46 percent
oppose it, putting the
two sides into a
statistical tie, the San
Jose-based newspaper La
Nacion reported Sept.
24.
The telephone poll of
1,238 Costa Ricans Sept.
11-18 had a margin of
error of 3.4 percentage
points. Support is down
nearly 7 percentage
points from August, La
Nacion reported.
``Arias has put a lot of
political capital into
this deal,'' said
Joydeep Mukherji,
director of sovereign
ratings at Standard &
Poor's in New York. ``He
ran for office proposing
ambitious reforms for
health care, education,
and social spending, but
that requires more
revenue and getting the
economy to grow faster.
Now everything is caught
up in the CAFTA
debate.''
To contact the reporters
on this story: Carlos
Manuel Rodriguez in New
York at crodriguez17@bloomberg.net
; Bill Faries in Buenos
Aires at wfaries@bloomberg.net
.
|
