[Ip-health] CAFTA splits Costa Rican electorate - approval uncertain

[robert weissman]

[snip]

Activists in Central America are worried that the region's farmers would
not be able to compete against subsidized American agricultural
products, and they fear protections granted to U.S. pharmaceutical
makers could make it tougher to procure cheap generic drugs to battle
AIDS and other life-threatening diseases.

[snip]

Trade Accord With U.S. Splits Voters in Costa Rica

Discontent with the pact turns the presidential election into a close
contest, analysts say.

  Los Angeles Times

By Marla Dickerson and Evelyn Iritani
Times Staff Writers

February 7, 2006

SAN JOSE, Costa Rica - The top two candidates in Costa Rica's
presidential election were deadlocked Monday in a race some say has
become a referendum on a controversial free trade pact with the United
States.

Sunday's contest was supposed to have been a coronation for former
President Oscar Arias, a Nobel Peace Prize winner who vowed to seek
quick approval for the trade agreement with the U.S. and other Central
American countries. Instead, with 89% of the vote counted, Arias finds
himself in a dead heat with Otton Solis of the Citizens' Action Party, a
staunch critic of the trade pact who has called it "a factory of
poverty."

Election officials said it could take days, even weeks, before the race
was decided. Arias currently holds the slimmest of leads, having
garnered 40.5% of ballots cast compared with Solis' 40.3%.

Experts predict that the deep polarization among Costa Rica's voters
will prevent the speedy approval of the trade agreement that the
nation's business leaders and the Bush administration have been banking
on, even if Arias emerges the winner.

Costa Rica is the only country in the seven-nation deal that has yet to
ratify the pact, which established a trading group with the Dominican
Republic, El Salvador, Guatemala, Honduras, Nicaragua and the U.S.

The accord would open the U.S. market to more apparel, sugar and other
goods. In return, those nations would lower barriers for U.S. farm
products, manufactured goods and services such as banking.

But some signatories are expressing discontent. The pact's scheduled
Jan. 1 implementation is on hold because some nations are balking at
making changes to their intellectual property rules and other laws.

But it is hesitation by Costa Rica, the region's oldest democracy and
most prosperous economy, that has caught the world's attention.

"There is powerful symbolism in what's happening in Costa Rica," said
Michael Shifter, an analyst with the Inter-American Dialogue, a
Washington think tank. "Here is a country with enormous affinity with
the United States, where there is a tremendous convergence of shared
values ... and even they are not convinced that unquestioned support of
the United States is in their best interests."

Several preelection polls had shown Arias to be the overwhelming
favorite, with Solis projected to win only about one-quarter of the vote
in a race with 14 candidates. But analysts said Costa Ricans who were
uneasy with the trade pact and the U.S.-prescribed model of development
for the region defected from minor candidates to cast their lot with
Solis.

"Voters saw in Solis the only anti-CAFTA candidate with a chance of
winning," said Sergio Araya, president of the College of Professionals
in Political Sciences and International Relations in San Jose, using an
acronym for the free trade agreement.

Copy shop owner Alexander Rojas Villalobos is dubious about opening up
government-run industries to competition from U.S. firms. He worries
that the trade pact could bankrupt the state-run cellular service, which
has provided Costa Ricans with some of the lowest rates in Latin
America.

"It's a public service that [U.S. companies] want to turn into a
business for their own profit," said Rojas, who wore an anti-pact
T-shirt at a pro-Solis rally a few days before the election. "It's
economic hegemony."

Although U.S. exports to the accord region account for less than 2% of
total foreign sales, the deal has strategic importance for the Bush
administration. Unable to persuade major economies such as Brazil and
Argentina to join a hemispherewide trade bloc, U.S. negotiators have
been chipping away at Latin America, piecing together an economic
"coalition of the willing" through smaller bilateral and regional deals
in hopes of ratcheting up the pressure on skeptical nations.

The Central American trade pact has proved a hard sell. In the United
States, Republican leaders resorted to heavy arm-twisting last summer to
pass the accord by a single vote after it was strongly opposed by labor
unions and Democrats who said environmental and labor protections lacked
teeth.

Activists in Central America are worried that the region's farmers would
not be able to compete against subsidized American agricultural
products, and they fear protections granted to U.S. pharmaceutical
makers could make it tougher to procure cheap generic drugs to battle
AIDS and other life-threatening diseases.

Anti-pact protests erupted in several Central American nations,
including Guatemala, where at least two demonstrators were killed last
year.

In Costa Rica, the business community is firmly in the camp of the U.S.,
which buys about half of Costa Rica's exports. Last year Americans
snapped up $3.3 billion worth of Costa Rica's flowers, fruit, apparel
and technology products, according to U.S. government figures. American
firms, including Intel Corp., Baxter International Inc. and Rawlings
Sporting Goods Co., are the biggest foreign investors.

Economist Eduardo Lizano, director of the Central American Academy, a
private research center, said a rejection of the trade agreement would
be catastrophic. He said export growth, U.S. investment and jobs were
needed to jump-start Costa Rica's sluggish economic growth and to combat
its high unemployment .

A high-level delegation of U.S. lawmakers, including Rep. Roy Blunt
(R-Mo.), went to San Jose in December to warn that Costa Rica risked
being left on the sidelines if the deal was not OKd.

U.S. Ambassador to Costa Rica Mark Langdale raised hackles recently when
he was quoted by a local newspaper as saying that Costa Rica's
reputation as a good place for U.S. companies to invest "will suffer" if
the accord wasn't passed.

In Latin America, the U.S. faces a widening fracture with countries such
as Venezuela, Argentina and Bolivia that are headed down a more
populist, anti-American road.

That schism is worrisome to some trade experts because it comes at a
time when the European Union is expanding its economic ties with its
less-developed neighbors and China is making progress on trade pacts
with Australia and nations in Southeast Asia.

Anti-American sentiment in some Latin American countries has created an
opportunity for European and Asian nations to move into the region.
Spain is using its historical ties to cultivate trade with the
Spanish-speaking countries in Latin America. China has forged diplomatic
and economic agreements with countries such as Brazil and Venezuela,
particularly in agriculture and natural resources.

Some say the trade and development model being pushed by Washington has
been oversold. They point to Mexico, which signed the North American
Free Trade Agreement a decade ago and has become the U.S.'
second-largest trading partner. Despite the deal, half of Mexico's
people live in poverty, and illegal immigration to the United States is
at an all-time high. Populist candidate Andres Manuel Lopez Obrador is
the front-runner in this summer's presidential contest.

Solis and others say Costa Rica isn't against free trade, but it wants a
better deal than the one offered under the Central American trade deal.

They portray the pact as an attack on the nation's unique social model.
Costa Rica abolished its army in 1949 and invested in education,
universal healthcare and other programs that turned it into an oasis of
stability in a region once torn by strife. Foes see the free trade deal
as a pact that aims to make their country more like its impoverished
neighbors.

Business leaders here have characterized the opposition as a "vocal
minority" led by public-sector unions that will see their power
diminished.

But Albino Vargas, secretary general of the National Assn. of Public and
Private Employees, said Costa Ricans wouldn't stand for the "Central
Americanization" of their country. He predicted massive protests if
Costa Rica's legislators try to approve the accord without putting it to
a national referendum.

If there is no referendum at the ballot box, "there will be a referendum
in the streets," he said a few days before Sunday's election. "We will
be vocal. But we won't be a minority."

*

Times researcher Rebecca Kimitch in San Jose contributed to this report.