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| Lynda Solar, CEO of the American
Chamber of Commerce in Costa Rica |
| Courtesy AMCHAM Costa
Rica |
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| This past summer, Bridgestone
Firestone decided to invest another $40 million
in Costa Rica. |
| Courtesy AMCHAM Costa
Rica |
Negotiations in the Central American Free Trade Agreement
(CAFTA) will begin at the beginning of next year.
The American Chamber of Commerce (AMCHAM) is involved
in three principle areas. First of all, getting the
production sector together to agree on different areas
of the negotiations in Costa Rica; second, at the
Central American level, getting the Central American
countries to agree despite their differences; and
third, between Central America and the USA.
At the local level AMCHAM is working in various directions.
It participates as sort of a link between private
sector and the government. AMCHAM has a consulting
group that works together with the local Costa Rican
Chamber of Commerce and the Costa Rican Chamber of
Exporters to monitor the process.
At the Central American level, the AMCHAMs are working
together under the Central America task force. This
Central American task force is working in each country
within their respective private sectors. Focus groups
are held with the media, the academic sector, the
small and medium size businesses, the industrialists,
and the legislators, in order to better communicate.
The overall challenge facing AMCHAM is to identify
the problem areas and work through them in order to
move the process forward.
According to Lynda Solar, CEO of the American Chamber
of Commerce of Costa Rica, agricultural issues, such
as rice production, are among the most sensitive.
Agricultural products are heavily subsidized in the
US, and Costa Rice fears that it won’t manage
to compete with the US.
Solar reminds us about a recent example in the NAFTA
with Canada and the issue of potato growers. They
represent a very small sector in Costa Rica, but they
put a lot of pressure on the legislators so that the
government really had to work through it and make
some concessions in order to move the free trade agreement
with Canada forward. “One of the ways to smooth
the process in CAFTA is to have chambers like AMCHAM
and the chambers of commerce to educate farmers and
people in the agricultural sector that it makes more
sense to support it than to go against it,” claims
Solar.
For example, coffee was not included in the free trade
agreement with Mexico, and now coffee producers are
facing increased costs and obstacles in their attempts
to enter into the Mexican market. This is an example
of careful planning – and its lack thereof –
and what it can mean after negotiations have already
concluded. After all, Solar says, “The process
is going to move forward any way and if you don’t
want to be in it and if you don’t get on the
train now, you are going to be left out. Education
benefits everyone.”
Some people have raised questions about how negotiating
with the others is going to benefit Costa Rica in
the long run. The nation is probably the wealthiest
of the C5-group. However, this is the only way the
US will advance the cause of free trade with Central
America. According to Solar, “The U.S invited
them as a party, and one reasons is that this is going
to force Central America to fix all the problems that
they have with the common market before starting negotiations
with the United States. Even if every country is a
little bit different there are going to be concessions
made to some of the least developed countries of Central
America. I’m sure there will be concessions in
certain areas but basically it is a block negotiation
–leading to a win-win situation.”
Even before 9-11 President Bush had said that he wanted
to focus on developing closer ties with Latin America.
Moreover, America receives a lot of immigration from
this region into the US, and establishing clear rules
concerning illegal immigration, money laundering,
etc., is one of aspects where the Latin-American/
US relationship will need to be strengthened.
Despite being a bilateral issue, one topic that has
created a lot of heated discussions around the free
trade negotiations, between the US and Costa Rica,
is oil exploration.
Two oil companies have tried to enter Costa Rica.
One had a contract and one didn’t. The case of
the first company has become more serious, as it had
a contract but it was not respected. Now Costa Rica
is actually paying fines to that company. The other
company did not have an actual contract but a concession.
The contract was never ratified.
A free trade agreement would harmonized the rules,
making it more difficult to back out of agreements
than it is today.
So, what kind of economic base will welcome the free
trade in Costa Rica? Solar believes that “the
investment climate is basically sound and that there
is a high quality of life here. Costa Rica also has
a stable democracy, an educated work force, a lot
of people speak English, and the industrial parks
are really first class.”
One strong advantage is the nation’s proximity,
two and a half hours by air to the US. Many Costa
Rican students attend US colleges and universities.
There is a great deal of respect between the two countries,
and more and more US companies are establishing their
operations in Costa Rica.
Solar recalls, “About five years ago in Dallas
I was told that one particular company had a waiting
list of people who wanted to come to Costa Rica
to work. This is also because the business routine
here is very dynamic, very organized and educated.
International companies here can find people that
are very well educated, speak perfect English. You
see that the relationship has a strong foundation.”
However, what will really boost the economies and
define a stable and harmonious future in the region,
bilaterally as well as multilaterally, is free trade
–first the CAFTA, then the Free Trade Area of
the Americas.
Solar encourages people to learn more about free
trade. “Very few people realize how many jobs
in the US are related to trade, to free trade and
how important that is for the development, not only
for countries like Costa Rica, but even for the
USA. One good example took place in a town in the
US whose congressman was against the free trade
agreement with Chile. After a little bit of research
it was brought to his attention that almost 90%
of what was being produced at the plant in his town
was actually exported to Chile. Therefore, so many
jobs are related to trade...we don’t necessary
realize the extent.”
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