U.S. Warns Costa Rica
Against Rejecting CAFTA
By Doug Palmer
WASHINGTON (Reuters) -
Costa Rica could lose
valuable access to the
U.S. market if the
country rejects a
free-trade agreement
with the United States
when voters go to the
polls on Sunday, a top
U.S. official said.
The United States
respects Costa Rica's
sovereign right to
decide whether to join
the pact, "but, I hope
whatever decision is
made is based on the
facts," U.S. Trade
Representative Susan
Schwab said in a
statement on Thursday.
"It is difficult to
imagine any U.S.
administration
renegotiating the
current agreement or
negotiating a new trade
agreement with Costa
Rica if this agreement
is rejected. The
opportunity for Costa
Rica to enjoy the
benefits of regional
free trade is now,"
Schwab said.
The warning came as
Costa Rica prepared to
vote Sunday on whether
to join the U.S.-Central
American Free Trade
Agreement (CAFTA), which
the U.S. Congress
narrowly approved in
2005. Some Costa Rican
opponents of the pact
have argued it could be
renegotiated and
improved if voters
reject it.
About 100,000 Costa
Ricans turned out last
Sunday to protest the
pact, a huge number in a
country of 4 million.
The deal locks in Costa
Rica's current duty-free
access to the U.S.
market under the
Caribbean Basin
Initiative (CBI), and
phases out many trade
barriers facing U.S.
manufacturers, farmers
and service industry
companies in Costa Rica.
The referendum has split
the nation, with Costa
Rican President Oscar
Arias and some
businesses saying CAFTA
will bring investment
and jobs. Opponents says
it will mean a flood of
cheap farm imports and
limit the country's
sovereignty by taking
investment disputes to
international
arbitration.
"The opposition has
always said that nothing
will happen to this
country without the
trade pact. This
statement (by the United
States) comes at the
right time so that Costa
Ricans know all the
cards are on the table,"
said government official
and brother of the
president, Rodrigo
Arias.
Other CAFTA countries --
El Salvador, Guatemala,
Honduras, Nicaragua and
the Dominican Republic
-- have already ratified
the agreement. Only
Costa Rica has let its
voters decide.
Schwab also took issue
with a recent letter
from Senate Majority
Leader Harry Reid and
House Speaker Nancy
Pelosi that said Costa
Rica would not lose
current U.S. trade
benefits if the pact is
rejected.
"Participation in the
CBI is not conditioned
on a country's decision
to approve or reject a
free trade agreement
with the United States,
and we do not support
such a linkage," the
Democratic leaders said
in a letter to Costa
Rica's ambassador to the
United States.
Although many trade
benefits under CBI are
permanent, certain
others benefiting Costa
Rica's textile and tuna
industries expire next
year.
"The fact is, the United
States has never faced a
situation where one of
our trading partners
rejects a reciprocal
trade agreement with the
United States, but
continues to seek
unilateral trade
preferences," Schwab
said.
(Additional reporting by
John McPhaul in Costa
Rica) |
|
