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The street demonstrations and expensive publicity campaigns have subsided since the October 7th nationwide referendum. However, CAFTA remains a hot issue, and it is difficult to find a Costa Rican who doesn’t have a position. The free trade agreement between the U.S. and Costa Rica – known as TLC (Tratado Libre Comercial) in Spanish – was passed by a narrow margin, and the only roadblocks now are a series of laws that must be passed in the coming months.
Among the free trade agreements throughout the Americas, Costa Rica was the first to leave the decision to a popular vote. This was fitting, as the approval of CAFTA will fundamentally change many things that have become part of the national conscience and tradition, such as the state-run monopolies which now provide the telecommunication and medical services to the country. The agreement will naturally bring a more open economy, which means national businesses confronting huge multinational companies such as Walmart, which has already bought around 70% of the nation’s supermarkets.
Other sectors of the economy that will continue to change will be agriculture and exports. In recent decades, agricultural production has shifted from domestic consumption to more exports and foreign consumption. It is likely that this shift will be accelerated by CAFTA, and the more export-based economy, centered on some principal products like sugar, coffee, bananas and beef, will expand. However, 2007 export growth in agricultural exports slowed, leaving some, such as the Foreign Trade Minister Marco Vinicio Ruiz, blaming the bureaucratically slow process of passing CAFTA. Nonetheless, exports have changed dramatically in the last decades, and products like electronics and medical equipment comprise 78% of the total exports by value.
Costa Rica has also been a leader in one of the new exports of the modern economy – an area that will bring many new jobs with the passing of CAFTA. The service industry has exploded in Costa Rica, which has one of the highest-skilled working forces in Central America, not to mention a large number of English speakers. Thousands of nationals work in businesses such as calling centers, and this number promises to increase. The government is already looking to restructure the free trade zones (zonas francas), readjusting them to focus on services. In 2007 the Central Bank estimated that the country “exported” $3 billion in such services.
While there will certainly be advantages to signing the agreement, many Ticos are still apprehensive about the implications in telecommunication services and healthcare. Other Latin American countries, such as Mexico, have seen increases in telecommunication service prices since the government signed NAFTA in the 1990’s. Another widespread worry concerns healthcare and the fact that, despite long waits and slow service, national healthcare does currently provide services to some 90% of the population, including many low-income families and individuals. Health care coverage will now not be a guarantee, but depend on the nature of one’s financial abilities and employer. The end of generic medicines will also mean higher prices.
In the coming months, the government will very likely pass the remaining laws needed to pave the way for the full implementation of CAFTA, and the country will wait to see how the promises and warnings of the “yes” and “no” campaigns play out. Regardless of which side of the fence they sit on, Ticos are all hopeful for a positive outcome and remain proud of their economic and social success among their Latin American counterparts, a position they are working to maintain.
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