October 8, 2007
On Sunday, the people of Costa Rica approved the Central American (and Caribbean) Free Trade Agreement, by a 52%-48% margin. It was the first time such a national referendum had ever been held in Costa Rica, and turnout was fairly high. Many people had expected the measure to be defeated because of opposition by leftists, workers, and some farmers, so it is welcome news to those of us who hold out hope for economic cooperation between the United States and its near-neighbors to the south. President Oscar Arias worked hard on behalf of the trade agreement, saying that his country needed the economic stimulus, and that the opportunites from expanded export markets would more than offset losses to farmers who might be hurt by increased foreign competition. He is almost certainly correct. Bush administration officials lobbied intensively to make sure that the last "hold-out" country would join with the rest of the countries in the region. See Washington Post and Tico Times. The political arm-twisting by both sides in this debate is par for the course in these sorts of high-stakes decisions. There will be winners and losers in Costa Rica, but their economy has grown "soft" over the years because of government protectionist policies and a relatively welfare system, so the competitive forces will have a healthy effect in improving efficiency.
When Jacqueline and I visited Costa Rica two years ago, I noticed an unusual flag flying above one of the buildings in San Jose's embassy district: that of Taiwan, also known as the Republic of China. That was a reflection of the fact that Costa Rica was one of the few countries in the world that still maintained official diplomatic ties with Taiwan, which for many years showed its appreciation by providing various forms of economic aid. That situation was reversed four months ago, when President Oscar Arias recognized the government in Beijing, saying that it would bring in much needed investment. In return, the government of the People's Republic of China is now urging its citizens to travel to Costa Rica, a veritable paradise for eco-tourism. See BBC.
The trial of Peru's former president Alberto Fujimori will begin next month, and he faces a sentence of up to 30 years if convicted on murder and kidnapping charges. It all depends on whether any first-hand witnesses can link him to the death squads that hounded terrorists in Peru during the early 1990s. See BBC.