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Nobody can figure out precisely how Costa Rica will benefit from CAFTA but reasonable estimates and projections can be made taking into consideration Costa Rica’s comparative advantages that is (1) paradise-like nature, beaches, volcanoes, mountains, (2) educated, skilled labor force, (3) tropical climate favorable for the production of a wide range of agricultural products that cannot be grown in the US. Other Central American countries may consider rejecting CAFTA in the near future precisely because of the lack of one or several of the above… the lack of which would put them into similar situation as many regions of Mexico, which suffered from the adverse effects of NAFTA which the government was unable to address effectively. I still argue that Costa Rica is in an advantageous situation relative to other Central American countries and as such can exploit its inherent advantages to its benefit.
I know the state of the US educational system but doubt that Costa Rica is bound to follow the same path precisely because of the cultural differences you mentioned… Most Costa Ricans are politically-minded and civically conscious, read newspapers, listen to the radio, watch news on TV and try to seek answers to critical questions pertaining to politics.
I am not sure what makes you think that Costa Rica will benefit from CAFTA in the short term. If anything, the short term benefits are the most difficult to ascertain… In fact, normally, the short term is often marked by an adjustment period in which the market distortions created by long-term barriers to trade which become removed due to the trade treaty implementation… This adjustment is often characterized by short-term adverse effects such as job losses in industries unable to compete with the new competitors. In the medium and long term, however, positive effects of free trade can be more easily identified.
Inflation in the case of Costa Rica is driven principally by rising import prices. CAFTA will reverse this trend as free trade is likely to lower prices on all fronts.
Again, lack of natural resources does not make sense to me. Costa Rica’s natural resources are national parks, rainforests, beaches, volcanoes all of which are being exported for tourism. I do not foresee that those will become scarce in the near future… well, in the future period.
Intel, IBM and the likes are all paying wages that are well above the national average so if as you argue they will continue to “control” wages, that to me is nothing but a good news for Costa Rica. CAFTA is likely to bring more companies that fall into this category creating more jobs that pay good salaries in Costa Rica.
US will lose jobs to Costa Rica? That sounds a little bit farfetched to me. Although the US economy continues to slow down, it is my understanding that it continues to create about 100,000 new jobs per month. Costa Rica’s labor force of 1.86 million could only with great difficulties be a cause of US unemployment or removal of US jobs… If it is, the impact on US economy would be minimal.
I would like to see an analysis of which local Costa Rican companies will be put out of business by multinational mammoths such as Intel, IBM and the expected new arrivals. Most of the high tech/electronics industry in Costa Rica has been founded on foreign capital.
Those who are skilled enough cannot find jobs in their field because there are none at present. CAFTA will contribute to job creation. But, there is also the flip side. According to a recent government report, many companies planning on expanding production in Costa Rica are finding it difficult to find bilingual employees. What does this mean? Although CAFTA will create new jobs, Costa Ricans must work harder on their English skills and foreign language skills in general.
CAFTA will not take over government. CAFTA will attract more Foreign Direct Investment which will create more jobs, which will increase national production, which will have a multiplying effect on consumption and ultimately will boost government tax revenue that can be used to tackle problems which currently cannot be resolved due to government budget constraints.
Talking about US debt and Costa Rican debt is talking about two entirely different issues. Foreign reserves, credit etc. put the two countries into completely different categories.
You seem to be conflating CAFTA and US. CAFTA is not the US. The US will not and should not resolved Costa Rica’s problems. CAFTA is a means to helping both countries get better off.
When you say Costa Rican’s have a true democracy, I am not sure what you mean by that. They do have long democratic tradition, stable political institutions, etc. but I am not sure if that constitutes a true democracy.
Slaves to their lifestyle, rat-race, etc. these are some strong words. I have noticed however first hand that many Ticos my age who are young professionals like to work hard not because they are forced to do so but because they like working, they like accomplishing important things in their life, they like to compete with others and they like to prove to themselves that they can make it. Increasingly more young Ticos are moving out of their homes to be able to live their independent lifestyles. There may be a cultural shift occurring as we speak, which you may be ignoring or overseeing. The laid-back attitude may hold true for the older generation but at the bottom of the population pyramid, things are beginning to shake up.
One more thing… The motives behind CAFTA are not merely economic. Free trade which spurs economic growth and boosts tax revenues fosters transparency, good governance and the capacity of governments to act in the interest of its citizens. It is in the interest of the US to ensure that in its backyard — Central America and Latin America — things are stable and peaceful. Besides aid, trade is an excellent tool to promote such objectives.
You are right, CAFTA is NOT just about economy in the same way USAid is NOT just about charity….Only that US interests are not always expressed so transparently… Hopefully, Ticos & Ticas have figured that out already and will vote accordingly today…
I wonder what the difference between “free trade” and the trade that Costa Rica has now? All trade is “free trade” except that trade which is controlled by a bunch of regulations and such, that is not “free trade” it is controlled trade. You speak from a business owners point of view. I speak from a mechanical engineers point of view. I’ve seen what our government has done to our work force with their enforced regulations and such. If this treaty was such a good thing then why is it written so it is confusing? I know lawyers from both the US and CR that don’t understand what is written. If it were good for the people then it would be written so the people could understand it. Also, who from CR was in on the writing of this trade agreement? As I understand it was mostly done in the US by US politicians and their lawyers. I have noticed that many of the ex-pats from the US are moving to CR to get away from corruption in the US, how many from CR are moving to the US to get away from corruption? There are many Ticos and Ticas traveling to the US for educational purposes but they move back to CR when their education is completed.
BTW I have also had 3 successful businesses, I retired from the last before my 58th birthday so I do know a little about trade. My retirement home is in Costa Rica.Anyway it is not for us to decide, it will be decided by Ticos and Ticas in a matter of hours and the outcome will be the will of the people not the will of a foreign government.
The one thing no one has mentioned, is the reason the US really wants CAFTA in the first place. It is to balance the effects of trade with China. The US trade deficit with China is substantial. China has us by the short hairs, and this is our way of hedging our bet.
By creating a larger trading bloc in this hemisphere we insulate ourselves from the massive economic problems that will inevitably appear in the coming years. How long do you think it will take for the US to recognize Cuba? We already have farmers from the Midwest selling them grains on a cash only basis. Legislators are going down there to try to open up trade despite official US policy.
It won’t be long before similar agreements will be hammered out with South America. Chavez is the fly in the ointment for the moment, but money rules the day. The US has an interest in developing trade on this side of the world. It is an economic issue, that somehow always becomes political.
We all have our views on CAFTA/TLC. The ways in which we have expressed them indicates the sentiments are as varied, and confusing, as the document itself. There is no completely right or wrong answer. The hope is for everyone involved to come out of this with something to gain. This may or may not be possible.
At least after today we will only have the outcome to discuss. OH BOY!
Pura Vida y buena suerte a Costa Rica.
I can only hope you’re right and the US stops this ridiculous embargo with Cuba–for whatever the reason! Then, the games are on! Cubans, with Fidel or without him, are not likely to allow anyone to tell them what is in their best interest and have proven to be incredibly creative in order to survive their current economic conditions–I can only imagine what they’ll come up with if given half the chance. Opinionated bunch of people these Cubans 🙂 From your Cuban/Tica amiga, Rebeca.
PS. Just spoke to my sister in CR & she feels that many will abstain from voting because they’re still so confused about what CAFTA really means. Unfortunately, this is not a novel approach, “if you can’t dazzle them with brilliance, then baffle them with…” My heart goes out to all Ticos/Ticas today….
I think we will see a lifting of the embargo sooner rather than later, especially with all that oil sitting just off Cuba’s coast, and the Chinese willing to develop it.
The embargo has done nothing in forty years to change leadership in Cuba. Another forty would just make the Cuban people suffer more than they already have. They are a resourceful group, and they will succeed in business once given the opportunity. And the benefit here will be we can at least enjoy their cigars again…Legally! Lol.
I believe an integrated north, central, and south American free trade arena will benefit all of the partners. Sure, the big guys (US) will stand to benefit the most, but the opportunity to increase exports by other smaller countries will give them the will to produce, and to prosper.
The White House said saturday” that if Costa Ricans vote against joining U.S.-CAFTA, the Bush Administration will not renegotiate the deal”. I hope whatever was decided today was the right decision for CR.
I sure hope so Alfred–that embargo has only served to harm the people not Fidel’s resolve. I don’t promote smoking, but I have to admit that Cuban cigars are some of the best. If trade opens up then I’ll buy some of my uncle’s fresh rolled cigars for you and some other WLCR friends–he’s been growing and rolling cigars almost all of his life. 😉
I don’t think that politicians, Democrats and Republicans alike, are willing to back a sinking ship before the next US elections. Frankly, that’s my only hope that Congress will finally do what’s right and negotiate a better and actually understandable trade deal with Costa Rica if the NO vote wins today. If the YES vote wins, then we’ll get to see what’s in the “Piñata” as my friend’s mother put it, for some people in Costa Rica. I think all sides are holding their breath right now..
Did someone say “cigars”?
I will be putting up a new article about my favourite cigar manufacturer later this week.
All their tobacco is grown in Costa Rica from Cuban seed but the cigars are hand made in Puriscal, Costa Rica.
Scott Oliver – Founder
WeLoveCostaRicacomI look forward to reading your article–imagine that, another Cuban-Costa Rican connection….Don’t worry Scott, I wouldn’t dream of forgetting the founder of one of my muses, WLCR. I’m always impressed by the love affair farmers have with their land. In Cuba, it was actually moving to see them gently, but knowingly handle the leaves and then transform them into such an elegant product…Again, not that I promote smoking, but I do think it’s beautiful to be passionate about what you do….Rebeca
According to the preliminary results that came out today after 8 pm it seems like Costa Rica is voting YES! Congratulations!
Jan
I also understand the YES people have been caught handing out Government gasoline vouchers to YES voters to “assist” them in getting to the polling booth.
In this regard the result should now be declared fraudulent and be annulled.
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