Friday, December 19, 2003

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New trade deal

I've taken a fair number of potshots at the administration for its flirtations with protectionism. It would be churlish (my word of the day) not to congratulate them on negotiating a Central American Free Trade Agreement. According to the Financial Times:

The agreement with El Salvador, Honduras, Nicaragua and Guatemala will eliminate all tariffs on industrial goods over a decade, and will gradually phase out protection of agricultural products over the next 20 years. It will also force the Central American countries to deregulate most sectors of their economies and adopt strong protection for US patents, trademarks and copyrights....

Costa Rica, which has the largest economy in the region and is the biggest market for US exporters, refused to conclude the negotiations because of US demands that it liberalise its monopoly telecommunications and insurance sectors.

Mr Zoellick said the US was prepared to resume talks with Costa Rica next month and hoped it would make the needed concessions to become part of the agreement.

If Lloyd Gruber's hypothesis in Ruling the World is true, you have to conclude that Costa Rica will accede to the agreement.

Ratification looks to be a fun fight.

posted by Dan on 12.19.03 at 11:26 AM


The Miami Herald biz section already talks about the uphill battle to approve CAFTA in congress as sugar growers and textile manufacturers protest the accord a day after a tentative agreement was reached. Considering that the sugar lobby is based in Florida, a key election state for 2004, it is highly improbable Bush will send the accord to Congress prior the election.

posted by: ch2 on 12.19.03 at 11:26 AM [permalink]

“Considering that the sugar lobby is based in Florida, a key election state for 2004, it is highly improbable Bush will send the accord to Congress prior the election.”

President Bush deserves severe criticism if he chickens out on this fight. The odds are strongly in his favor to be reelected. Therefore, he can risk some political capital on this most important issue. It enrages me to no end when I’m compelled to praise Bill Clinton more on free trade than the current President. I hope that he will never again disappoint me.

posted by: David Thomson on 12.19.03 at 11:26 AM [permalink]

All the expats here in Costa Rica are muttering darkly about the current government having an anti-foreigner agenda. The current presidential incumbent, Abel Pacheco, is really quite appallingly incompetent. He's definitely going to be a one-termer, and if we get a reasonable rightist like the previous President, Miguel Angel Rodriguez, I imagine Costa Rican accession to CAFTA will shortly follow.

About time too - it's utterly ludicrous to have a state-run telecoms industry in this day and age. By comparison with the rest of the region, Costa Rica used to have a highly advanced comms infrastructure, but that lead has been eroded and in some cases overtaken in recent years. I have a reliable 256k cable internet connection, but we only got GSM celphones a year ago and true broadband is still a year off. The state-run providers are actually about as efficient as one could reasonably hope them to be, but true competition and private enterprise could hardly fail to improve matters.

posted by: David Gillies on 12.19.03 at 11:26 AM [permalink]

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