COSTA RICA

Under Duress, Costa Ricans say “Sí” to DR-CAFTA; What Comes Next?

Costa Ricans voted this month by a very slim majority to join the Dominican Republic-Central American Free Trade Agreement with the US (DR-CAFTA) in the nation’s first-ever national referendum.

In a testament to Costa Rica’s sturdy democracy, and the ingrained sense of civic duty carried by its people, nearly 60% of the registered voters turned out to cast their ballot (40% turnout was needed to make the results binding). From the capital city to mountain coffee towns to coastal fishing villages, Ticos young and old, educated and illiterate, impassioned and confused, stood in line to check one of two boxes reading “Yes” and “No” on their ballots.

The election itself was widely seen as clean. However, the DR-CAFTA opposition has criticized last minute campaigning, as well as a flurry of 11th-hour statements from the US government, in support of a “Yes” vote.

While free-trade agreements pushed by the US have encountered resistance throughout Latin America (including violent anti-DR-CAFTA protests in Guatemala and Nicaragua), and remain controversial in the US (DR-CAFTA passed by only two votes in the House of Representatives), Costa Rica is the first nation in the world to allow its citizens to choose whether to accept or reject a trade agreement by popular vote.

Despite a pro-DR-CAFTA campaign supported by the Costa Rican government, big business and all major media, a financially outgunned opposition nearly pulled off a win.

With 98% of the vote counted, the provisional results gave the “Yes” vote 51.6%, while the “No” vote was 48.3%. The tight finish mirrors the ’06 presidential election where pro-DR-CAFTA Oscar Arias beat anti-DR-CAFTA Ottón Solís, 4o.9% to 39.8%.

Just one week before the referendum, an estimated 100,000 Costa Ricans turned out to voice their opposition to the trade pact in what may have been the last, and possibly biggest, anti-DR-CAFTA protest ever. Things continued to look up for opponents as the week progressed, with the last poll taken before election showing an astonishing 12% lead for the “No” vote. This was the first time in years of polling that the majority of those surveyed rejected the treaty.

Much of the momentum was attributed to a government memo leaked earlier in the month in which former Vice-President and Planning Minister Kevin Casas recommended a series of unethical and illegal campaign tactics to get the agreement approved. The memo drew outrage from both sides of the debate, and Casas heeded calls for his resignation.

The US government also joined the fray, and potentially gave the debate its final, decisive push.

First, Democratic representative Michael Michaud and Independent Senator Bernard Sanders, in a late Sep visit to Costa Rica, bolstered two main opposition arguments by implying there were good chances that DR-CAFTA could be renegotiated in a Democratic-controlled Congress, and that current trade benefits Costa Rica enjoys under the Caribbean Basin Initiative (CBI) would not be yanked as punishment for a “No” vote.

DR-CAFTA opponents had noted that Costa Rica already enjoys duty-free access to the US for a majority of its products without DR-CAFTA, thanks to the CBI. However, some of those benefits, particularly for tuna and textile exports, are set to expire next year, and the rest of the agreement—which was extended unilaterally by the US in ’84—could be taken away at anytime by an act of Congress.

The Bush administration returned fire with only days to go before the referendum, first in a statement from US Trade Representative Susan Schwab casting doubt on—but never directly discarding—the possibility of renegotiating.

“It is difficult to imagine any US 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,” she said. Schwab also skirted the CBI issue. “There has also been considerable discussion about whether Costa Rica would continue to enjoy preferential access to the US market under our trade preference programs if the agreement is rejected,” she said. “The fact is, the US has never faced a situation where one of our trading partners rejects a reciprocal trade agreement with the US, but continues to seek unilateral trade preferences.”

The announcements made front-page headlines, and The White House followed up the day before the election, with spokeswoman Dana Perino saying much more directly, “If the free trade agreement is rejected, the US will not renegotiate the agreement.”

Whether or not the vote will serve as a period or a comma in the four-year conflict over the controversial treaty is yet to be seen. Solís’ Citizen Action Party (PAC) had said going into the election that should the “Yes” side win, it would continue to fight the implementation agenda in Congress—a set of 13 laws that must be passed by 29 Feb ’08 for DR-CAFTA to go into effect.

The proposed laws implement some of the more controversial aspects of DR-CAFTA, such as opening the state-run telecommunications and insurance sectors to competition, adjusting Costa Rica’s intellectual property laws, and other changes. Should Costa Rica fail to pass the bills by the deadline, it will be permanently excluded from DR-CAFTA.

However, in a meeting between PAC leaders, President Oscar Arias, members of his cabinet and party legislators, PAC representative agreed to allow the bills to go to an up or down vote in Congress. The Arias administration has been assured it has the 38 votes necessary to pass the legislation.

“The people have made their decision. Mistaken or not, we continue to believe that this [free trade agreement] is damaging to the country. So, our proposal is simply ‘you pass the implementation agenda, we will try to improve it, not obstruct it’,” said Elizabeth Fonseca, PAC’s legislative head.

President Arias, who had called for national unity after the results, extended an olive branch to PAC leaders by inviting them to form part of the negotiating team for an eventual free trade agreement between Central America and the European Union.

Guatemala, Honduras, El Salvador, Nicaragua and the Dominican Republic have already ratified DR-CAFTA, while the Bush administration continues to pressure a skeptical Congress to ratify agreements signed with Panama, Colombia and Peru.

Government Begins Expropriations of Foreign-Owned Land near National Park

The government has begun expropriating a series of 32 properties near the La Baulas National Park, the principal nesting ground for the enormous, and endangered, leatherback sea turtle (known as baula in Spanish).

The park is located adjacent to Playa Grande on Costa Rica’s northern Pacific coast, in the midst of some of the most coveted land in the country. Neighboring Tamarindo, a surf village-turned-tourism boom town is one of the most-visited beaches in the country, and is home to an explosion of condominium and real estate development projects.

Las Baulas Park has been at the center of controversy for over a decade, as environmentalists have decried the development encroaching on the park, warning that the light and commotion from homes will interfere with the turtles’ nocturnal nesting. The government claims that the 32 properties were mistakenly put into private hands, and are actually part of the national park.

The confusion comes from the interpretation of the wording of the 1991 law that created Las Baulas Park. In defining the boundaries, writers used the term “aguas adentro” (loosely meaning, “from the water in”). That led some to believe that the protected area was from the water’s edge, “in” to the ocean. The Government Attorney’s Office, however, ruled that the wording meant, from the water’s edge, in to land.

Property owners that had bought a series of lots ringing the park were first notified their land was to be expropriated in June ’05, setting off a battle that continues today. Led by a rogue biologist, property owners and others have claimed there is no scientific proof the properties would bother or endanger the turtles.

The Arias administration, however, published in the official government record, La Gaceta (where all laws and decrees must first be published to take effect), an announcement regarding the beginning of the expropriation process. The process will take years and will cost the government millions of dollars, as the coastal land is some of the most expensive in the country—a preliminary value of $800 per square meter has already been rejected as too low by property owners.

—Leland Baxter-Neal