The Free Trade Agreement
By Antonio Briceño*,  for Insidecostarica.com

We could say it all began over a decade ago with the North American Free Trade Agreement (NAFTA), which was signed between Canada, the United States and Mexico with the purpose of exporting and importing products and services from and to each other, without having to pay for the additional tariffs, otherwise known as taxes imposed on foreign products.

Eventually the European Union formed, under the idea of also reducing or eliminating trade tariffs as well as opening their borders, so that the citizens of the countries that formed it could live and work within their borders, not needing any sort of work permit or visa except their European passport. It was NAFTA taken 10 steps ahead.

Further down the line, countries in Latin America began to adopt similar models of free trade agreements. In South America several countries formed Mercosur and el Pacto Andino, Costa Rica signed a free trade agreement with Mexico, and all the countries in the continent met at Quebec and signed an agreement to form the Free Trade Zone of the Americas, which was supposed to be put into effect this year, yet for a number of reasons has not.

Very recently, the countries of Central America, including Costa Rica, signed the Central American Free Trade Agreement (CAFTA) with the United States. The agreement has not yet been ratified by the legislative power of any of the countries that signed it, put in simple words it needs to be approved by each country’s congress or Senate to take effect.

In the case of Costa Rica it seems the treaty is headed for a long wait while political consensus is built to approve it, and that is the case for all of the countries that signed it. There are issues that must be dealt with before approving it. For Costa Rica these involve competing with imported agricultural products from the US that are subsidized, and much cheaper, since the ones here do not have subsidies of any type, there is a matter of privatizing the government owned telecommunications and insurance monopolies in order to allow these services to be offered by other companies, both local and American, then we also observe a high degree of apprehension in US political circles about the agreement being a way to export jobs to this region because of cost effectiveness, and there are of course several lobby groups and organizations that will put up a very strong fight against the approval of the treaty once it begins to be debated.

In good theory, free trade is supposed to benefit consumers by allowing open market competition that will lower prices and improve service and quality levels; it is yet to be seen if that is case and if the long term effects will be favourable. I would very much like to read about our readers` opinion on this topic and perhaps write a second part, maybe even start up our own debate about free trade between our nations.

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*Antonio Briceño was born in San José, Costa Rica. He was brought up in New Orleans, Louisiana and returned to his native country during his teens. Antonio will be featuring news articles and columns in a wide variety matters on a regular basis, exclusive to Insidecostarica.com