By Brandon Wallace
History will be writing itself in a matter of days, as the citizens of Costa Rica head to voting booths on Oct. 7 to decide the country’s involvement with the Central American Free Trade Agreement (CAFTA).
Costa Rica, often considered the model of economic stability and prosperity of Central America, decided not to sign the unilateral pact upon its ratification, when it was inaugurated into U.S. public law in August of 2005.
The October referendum aims to solve the dispute by placing the decision in the hands of the Costa Rican citizens, whom recent polls show are currently almost evenly divided over the issue.
The CAFTA, similar to the North American Free Trade Agreement (NAFTA) between Mexico, Canada, and the U.S., aims to create a free trade zone and cuts tariffs on 80 percent of products exported from the U.S. to countries that have signed the pact.
Some argue that Costa Rica’s ratification of the agreement is unnecessary, as the Caribbean Basin Initiative, a similar program with which Costa Rica is involved, allows all participating countries to export goods to the U.S. duty-free.
Many worry that CAFTA has serious ramifications for the global economy, especially if Costa Rica is to join. Sara Tiffany, a fifth-year politics and environmental studies double major who is currently completing community-based research on CAFTA in Costa Rica, offered her opinion.
“[CAFTA] can have a number of complex effects, some of which are welcomed, others not,” Tiffany wrote in an e-mail to City on a Hill Press (CHP). “Costa Rica has managed to stay fairly politically stable throughout, while its neighbors have been plagued with civil wars, political corruption, you name it. Costa Rica is different.”
Invariably, CAFTA requires the market liberalization for the majority of Costa Rican goods including manufacturing, agriculture, government procurements, and public sectors.
But small-scale farmers, who have been historically unable to compete with corporate businesses, may find trouble with the ratification of CAFTA.
Stephen R. Gliessman, Alfred E. Heller professor of agroecology and environmental studies, said, “With as many families dependent on agriculture for their livelihoods as Costa Rica has, CAFTA will largely undercut what little self-sufficiency that the food sector still has.”
For the U.S., CAFTA breaks down many economic barriers, provides freer access to the country’s resources, and allows the U.S. to play a larger role in the economic development of participating countries, such as El Salvador, Guatemala, and Honduras.
Strong supporters of CAFTA say that it will strengthen the business relationship between Costa Rica and the U.S., which is the main origin of exportation for nearly half of Costa Rica’s coffee, fruit, apparel, and technological products, and serves as a primary source of direct foreign investment.
“CAFTA, if ratified, will bring an influx of foreign investment, which many believe will create new jobs,” Tiffany wrote. “This will certainly happen, but the question is what kinds of jobs.”
The U.S.-based encouragement for Costa Rica to ratify its part of the treaty follows a long historical string of unilateralism whereby the strengthening of their economy and foreign diplomacy is independent of foreign nations.
“It’s not plausible for a small farmer with only a few hectares of land to grow crops to be able to compete with an economic giant like the U.S.,” Tiffany said.
U.S. Congressional Representative Sam Farr (D-Santa Cruz) issued a statement to CHP, saying, “I don’t know how Costa Ricans will vote on the treaty’s ratification, but I am pleased to see that the public will play an important role in determining the country’s future.”