Costa Rica’s participation in the
Central American-Dominican Republic Free Trade Agreement (CAFTA-DR) was decided on this past
weekend. With almost all of the nation’s voting precincts reporting the results, 51.5 percent of
the population voted in favor of ratifying CAFTA. The majority ruling on the national referendum
comes in the wake of contentious debate in Costa Rica and abroad over CAFTA’s purported benefits.
Opponents of the agreement have announced they will not recognize the official results until
a mandatory ballot-by-ballot recount is concluded. The recount, which begins today, must be
completed within two weeks.
Costa Rica is the last nation to ratify the free trade agreement. After being ratified by
the US Congress in 2005, El Salvador, Guatemala, Honduras and Nicaragua joined in 2006, and the
Dominican Republic joined in early 2007.
CAFTA-DR’s package of 13 laws include bills that will open Central American markets to
foreign competition, such as opening Costa Rica’s state telecommunications and insurance
monopolies, and domestic service and agricultural sectors. CAFTA-DR opponents fear that this market
liberalization will lead to a flood of cheap US imports, potentially putting rural farmers out of
work. As part of the agreement, the United States has promised increased market access for some
sectors in Central America, including textiles.
“The United States welcomes the outcome of the Costa Rican referendum on the free trade
agreement that Costa Rica signed with the Dominican Republic, El Salvador, Guatemala, Honduras,
Nicaragua and the United States,” said United States Trade Representative Susan C. Schwab.
“We believe, and history confirms, that countries that open their markets have greater
success in generating economic growth and development. We are pleased that Costa Rica will be
joining the other CAFTA-DR countries in reaping the benefits of greater regional economic
integration and market opportunities that the CAFTA-DR provides. We look forward to working with
the Government of Costa Rica as it completes the necessary steps to implement the agreement, so
that the CAFTA-DR can enter into force for Costa Rica as soon as possible.”
October 9, 2007