Costa Rica’s CAFTA “Si” vote called into question

Upside Down World | Friday, 12 October 2007

Costa Rica’s CAFTA “Si” Vote Called into Question

Written by Kari Lydersen

While free trade proponents cheered, opponents called foul in Costa Rica’s 51.5 percent vote Oct. 7 in favor of ratifying the Dominican Republic-Central American Free Trade Agreement (DR-CAFTA).

Costa Rica had been the only country remaining to ratify the pact, which has already been implemented in Guatemala, Nicaragua, Honduras, El Salvador and the Dominican Republic. Members of the Stop CAFTA Coalition and the “No campaign” in Costa Rica say the result is highly surprising given the groundswell of opposition that had built against the agreement, especially after the leaking of an incriminating memo revealing top officials’ plans to tar the “No” campaign as lackeys of Venezuelan president Hugo Chavez and Fidel Castro.

“I think we were all surprised,” said Laura Carlsen, director of the Americas Policy Program. “The polls were showing a considerable advantage for the ‘No.’ When you get a vote that goes heavily against what was expected in polls, there is suspicion.” A manual ballot recount was ordered, starting Tuesday.

A national poll by the firm Unimer, published in the paper La Nacion three days before the vote, found 55 percent support for a “No” vote, and only 43 percent support for “Si.”

“It’s important to have a recount since the results were so close,” said Vicki Gass, a senior associate of rights and development at the Washington Office on Latin America. “My guess is the Si campaign won, but the question is what tactics did they use? This was a Goliath with a lot of dinero beating a David.”

The No campaign says the Si side got its narrow victory in part because of unfair intervention by the US and campaign rules broken by the government and Si campaign. By law, campaigning was supposed to cease three days before the referendum. But, critics of the election say, pro-CAFTA messages were still run in the mainstream media as “news” the day before the election. CAFTA opponents also say the US intervened unfairly in a sovereign country’s matters with the White House’s threat shortly before the vote that trade preferences in the Caribbean Basin Initiative (CBI) would not be renewed if CAFTA was not ratified.

“The press widely covered [US Trade Representative] Susan Schwab’s threats to suspend CBI preference should Costa Ricans vote no — without providing any rebuttal,” said Tom Ricker, co-director of the Quixote Center, a faith-based social justice organization which had members observing the vote in Costa Rica. “In essence the media provided a day-long free commercial for the Yes side.”

This issue caused a stir within US politics, with Independent Vermont Sen. Bernie Sanders and House Speaker Nancy Pelosi (D-Calif.), among others, speaking out to reassure Costa Ricans they would not be punished for a “no” vote.

In September, US Rep. Linda Sanchez (D-Calif.) sent a letter to Secretary of State Condoleeza Rice noting a formal complaint filed against US Ambassador Mark Langdale for trying to influence the CAFTA vote.

“Even the perception of such interference harms the US image in a region already suspicious of our intentions,” says Sanchez’s letter. “If we are to be seen as respecting democracy, sovereignty and economic development, we must not interfere in any way with the historic popular referendum on CAFTA in Costa Rica, the region’s oldest and strongest democracy.”

But CAFTA critics think US interests continued to interfere nonetheless.

"The Costa Rican and US governments and the multinationals they represent simply had too much to lose to allow the ’No’ campaign to win,” says a statement from Tom Loudoun of the Stop CAFTA Coalition. “I was very disappointed by the result - but not surprised,” added Ricker. “In every country that has gone through a CAFTA ratification process, the forces in favor of the agreement have pulled out all the stops. The opposition to CAFTA in Costa Rica was phenomenal and I was certainly hopeful that this would be the one place that would overcome earlier trends.”

Daisy Blancaneaux, a Costa Rican native and president of the New York-based group Helping Going South, said she heard numerous reports of misconduct by the Si campaign while observing the vote.

“It was reported that in many towns (the poorest of the country) the Yes people bought votes for 20,000 colones ($40) each,” she said, over email. “That my dear friend is to play with the hunger of the less fortunate. In Costa Rica a country without an army, the government sent the police with M16 guns to the schools in Talamanca were indigenous people were voting. There were fleets of busses and taxis paid by the Ye$ groups all over the country.”

The referendum was historic in that it is the only time a free trade agreement in the Americas has been brought to a popular vote.

“Simply getting a referendum in Costa Rica was an enormous victory, something organizers in Honduras and Guatemala called for to no avail in their fights against CAFTA back in 2005,” said Ricker. “But in the end the forces supporting CAFTA bought the vote in Costa Rica - with $56 million in advertising and a variety of pay-offs, and in the end they resorted to threats: threats of lay-offs, and threats by the Bush administration to suspend existing trade preferences. It’s really shameful.”

Even if the recount reaffirms the CAFTA victory, it will be a long road to implementation. Thirteen Costa Rican laws need to be changed by February 2008 to allow the privatization and other measures the agreement calls for, and CAFTA opponents are likely to continue to fight these changes through protests, legal challenges and other avenues. The opposition PAC political party, which has vowed to fight CAFTA’s implementation, holds 17 out of 61 seats in the national assembly. They will likely be joined by other assembly members in opposing the law changes.

As previously described in Upside Down World, CAFTA opponents in Costa Rica fear it will put small farmers out of business, privatize the telecommunications, insurance and other currently state-run industries to the detriment of poor and rural residents and greatly increase drug prices through intellectual property laws, among other things. Opponents in note Costa Rican president and ardent CAFTA supporter Oscar Arias’s ties to wealthy Mexican businessman Carlos Slim, who made a fortune on Mexico’s privatized phone industry.

In 2006 the Council on Hemispheric Affairs reported that, “Slim has embarked on a campaign to dominate Latin America’s cell phone and internet markets through a subsidiary company known as América Movil. The company, which has moved aggressively throughout Central America and currently operates in Guatemala, Honduras, Nicaragua and El Salvador, has made no attempt to hide its interest in the Costa Rican market, and recently registered its Telcel logo in the country.”

Robert Russell, a George Mason University professor and author who is pro-free-trade but against free trade agreements, said he doesn’t think the effects will be as devastating as opponents describe, but he thinks uneven facets of the agreement - especially in regards to sugar — make it an unfair deal. At the behest of the powerful industry, President Bush kept protections for US domestic sugar intact.

“There are products the US subsidizes that will make it hard for Costa Rican farmers to compete,” Russell said. “We ought to get rid of those subsidies - those are wrong. [But they are] done for the administrators and special interests that benefit from the exemptions. I’m sure opponents are saying [because of CAFTA] the country will be plunged into poverty, and proponents are saying economy will double. Probably neither is true.”

The vote also opens the way for Costa Rica to negotiate a trade deal with the European Union, a development which was on hold pending the referendum’s outcome. Gass noted that, “most Costa Ricans are not against trade, but they want fair trade which provides safety measures for small farmers who now have to compete with subsidized US producers.”

Meanwhile anti-CAFTA activists and Latin America policy analysts say the organizing movement which sprung up against the agreement will live on both in ongoing opposition to the implementation of CAFTA and in other political realms.

“It was clear to me that Costa Ricans have not given up the fight,” said Tara Carr-Lemke of the SHARE Foundation, who observed the voting.“Undoubtedly, the grassroots base educated and mobilized around trade issues will grow in Costa Rica—it will be interesting to see how this base develops political strength for future actions and elections. General strikes have paralyzed Costa Rica in the past (in 2000) when the government tried to privatize nationalized services-I would imagine that this tool could be used again as the CAFTA agenda moves forward.”

“It wasn’t just a vote on CAFTA, but a clash between two different models of development,” added Carlsen. “This will come up not only in implementing legislation but in elections and all types of situations where you find a choice or potential choice between those two models of more state involvement and distribution of wealth versus leaving things to the international market.”

Blancaneaux described the anti-CAFTA movement as a victory, saying the actual vote is “only the beginning.”

“We won! Costa Rica won!” she said. “We lost one battle but not the war, because it is not over yet. We built the most diverse and powerful social movement in Costa Rica’s history. This is a different kind of democracy, the one that has been forgotten, the one of the people and for the people.”

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