The National Producer is our Major Priority
An important debate over the priorities of national development in the face of free trade took place during the negotiations to reform article 93 of the general customs law, file number 15.629. Delegates representing the National Liberation Party (PLN) and the Libertarian Movement (ML) in the Comisión de Asuntos Económicos (Commission of Economic Affairs), and Legislator Ronald Solís of the PAC (Citizen Action Party) were present.

The reform called for the addition of two paragraphs that would exclude cases of self-declaration where products and agricultural goods have previously been declared by the Ministry of Agriculture and Livestock as sensitive for the nutritional security and social stability of the country. It proposed the establishment of new specially regulated verification procedures.

PLN and ML oppose limitations on trade
Delegate Evita Arguedas disapproved of the bill and argued that it would create a large quantity of negotiations for importers of agricultural products and obstruct free trade.

Arguedas stressed that the authoritative body on this matter, the Ministerio de Hacienda (the Treasury), indicated that an established arrangement with such an objective goes against the developed philosophy of risk management and could generate an unjustified obstruction of international trade. Customs authorities upheld that the establishment of a model for revision such as the proposal in this reform would affect importers and customs agencies that work transparently in clear accordance with the established norms.

Legislator Antillón Guerrero argued that the current Law already deals with the topic and the change would violate other international trade agreements that Costa Rica has, specifically with the World Trade Organization, which might be able to characterize this legislation as an obstacle to trade.

Concern over Past Abuses
Delegate Solís Bolaños described the bill as extremely important, because the unrevised law had allowed importers to take advantage of Costa Rican manufacturers in the past. He cited specific cases in Costa Rica, including over importation of rice and potatoes, and suggested they were due to a lack of adequate customs controls, which allowed people to market products under false pretenses.

Solís said that the bodies responsible in these fields failed to protect national manufacturers in the past. Had they not failed, he said, farmers would not have to worry that more produce is being imported than is permitted, along with products that say they are of a different quality than what is actually imported so that different duties can be imposed.

According to Solís, the worry of the members of parliament should not be just to legislate, but also to do it in a way that benefits the majority of Costa Ricans.

“I do not believe that this represents any limitation on exterior trade,” Solís said. “What it is about is avoiding corruption and creating more efficient checks.”

Solís brought up another problem where companies that have huge holds all over Central America such as Grupo Más x Menos and Wal Mart, which has become the major importer of products from Costa Rica,

Free Trade as a Strategy Against the National Manufacturer
It was asserted that procedures should exist that are necessary to guarantee the transparency of the importation of these agricultural products to appease our manufacturers who not only have to deal with the anxiety of changing climates, prices, and other natural human worries, but also with the uncertainty of corruption and uncontrolled importation of products.

Solís said that the only House from which a response was received, the House of Agriculture, declared itself to be in favor of the bill. Those that were against it were bodies of the State. Because of this, it was requested that they solicit opinion from organized agricultural sectors about the bill and its implications.

A different course, according to the legislator, would be an abominable message to Costa Ricans, by continuing to impose an economic model that has proven to be damaging to the country, by polarizing society, and concentrating the wealth. He called, furthermore, to change this model and to give help to the internal market manufacturers, so that – if they should compete – they can do it in honest and fitting conditions.

Defense of the Libertarians
Delegate Arguedas Maklouf signaled that he does not agree with the argument that a movement such as the PML’s, is against the national manufacturers simply because it is sketching the judicial, legal and practical considerations that are critical to mention.

“It definitely does not have to do with the fact that we do not want to help national manufacturers, of course we do,” he said. Maklouf said his worry is with the consumer who he said is often forgotten.

“We also do not want to award inefficiency nor do we want to continue with exaggerated procedures that ruling bodies, such as the Dirección General de Aduanas, as not making sense already have to deal with,” he said. He also claimed the bill would go against international treaties already signed by Costa Rican authorities.

He called upon article 46 of the Carta Magna that says that whatever act, even though is may be originated in a law, that threatens or restricts freedom of agricultural or industrial trade, is prohibited for both importers and exporters.

Delegate Solís Bolaños retorted that if opponents to the bill were interested in helping the national producer, it should not be eliminated, but a proposal should be made to improve it. He also said that it is inaccurate to pit the manufacturer against the consumer in these cases as though no one exists in the middle.

He mentioned that while Wal-Mart represents 20 percent of the market in the U.S., it manages 63 percent of the minority market in Costa Rica, and similar percentages of the markets of other Central American countries. It can therefore give priority when importing and exporting its own products between the countries by setting lower prices, as it is in effect, selling to itself. Because of this, he argued, competition should be encouraged to help protect that national manufacturer and consumers.

Is Our National Producer Lazy?
“I have heard people talk of the inefficiency of our manufacturers without taking into account some very interesting variables,” Bolaños said. The size of national manufacturers and lack of government subsidies were among those variables.

“Miguel Angel Rodriguez wanted to lower the prices for products such as milk, rice, grains, meat, etc. by 10 percent to ´promote our competitiveness,´ because we were supposedly inefficient… but he didn’t take into account the existence of subsidies in developed countries from which the competing products come from,” Bolaños said.

He concluded by suggesting that if improvements such as the ones suggested in the bill are rejected, the debate will continue to arise, and with it lies the economic and social stability of the country.