Last summer, as Congress debated the Central American Free Trade Agreement, the U.S. press overwhelmingly treated CAFTA as a domestic political story, focusing on the political arm-twisting by President Bush needed to squeak CAFTA through the House by two votes.
Largely neglected were the implications of the deal for the millions of people it will substantially affect in Central America. The agreement represents a drop in the bucket for the U.S. economy (the overall impact on the U.S. will be “miniscule,” as the Associated Press put it), but could fundamentally alter the political and economic landscape in Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic.
Those countries know it — and the agreement, which was slated to go into effect on January 1, has stalled, as a number of them have yet to make the complex legal changes CAFTA requires. The most important free trade agreement of Bush’s presidency, which he last summer equated with national security and the strengthening of democracy, is well behind schedule.
One might think that news outlets would be quick to pounce on a juicy story like that. But few have devoted much — if any — attention to it. And what little coverage there has been has often failed to look very deeply at the implications of CAFTA.
Our trip through the sexy thicket of hemispheric trade policy begins with the Los Angeles Times, one of the few to have taken notice of the CAFTA delay. In a story on the 9th, the Times reported that “Growing anti-trade sentiment in several Central American countries has held up a trade agreement with the United States that had been slated to launch January 1.” The paper explained that through CAFTA, “the U.S. agreed to open its markets further to key Central American products, such as sugar and apparel and textiles, while those countries promised to lower barriers to U.S. farm goods, high-tech products and services. Central American governments also said they would strengthen their labor and environmental laws.”
But now, as the Times vaguely indicated, there is “rising skepticism about free trade across Latin America,” and “Some countries are balking at the requirement that they put more teeth in their intellectual property laws.” Reported the Times, “CAFTA has become a hot issue in the campaign for next month’s presidential election in Costa Rica, the only country that hasn’t ratified the agreement, and anti-trade sentiment is running high in several countries that have yet to complete the legal changes necessary to put the trade pact in place.”
The Times cribbed a recent Associated Press interview with Guatemalan Vice President Eduardo Stein in which he complained that “U.S. pharmaceutical firms were holding up his country’s CAFTA entry in an effort to force his government to make further changes to its laws,” and “also said his government had decided to strengthen its ties with Mercosur, a regional trading bloc formed by Argentina, Brazil, Paraguay and Uruguay.” Aside from Stein, however, the Times piece quoted only American trade experts — so Central Americans’ points of view were conveniently explained through secondhand means. The result? A story that only hinted at the ways that it could have been better.
Next we turn to the South Florida Sun-Sentinel, the only paper in the state to have produced a CAFTA-focused article in the last month. But that piece, a January 2 international business column entitled “Florida promoting DR-CAFTA opportunities,” was mostly dedicated to publicizing the Sunshine State’s nascent campaign to “raise awareness” about CAFTA and “mobilize businesses to seize the opportunities it helps create.”
The piece did point out that Florida “handled nearly half of all U.S. trade in goods with the six Latin neighbors” that comprise CAFTA in 2004, making “the DR-CAFTA area the No. 1 trade partner for Florida that year.” That signifies how important the CAFTA countries are economically for Florida, and how some businesses gearing up to expand their exports might be upset about delays in the trade deal’s implementation — but the column unfortunately didn’t even mention the delay, let alone provide any larger perspective.
Has television picked up the slack? Not quite. The only TV report of note came December 30 on CNN’s Lou Dobbs Tonight, when correspondent Kitty Pilgrim recounted that day’s announcement by the government that CAFTA would be held up and enacted “on a rolling basis as countries make sufficient progress to complete their commitments under the agreement.” Pilgrim gave no hint of the “anti-trade sentiment” the Times reported, then concluded, “Well, with today’s news it seems it wasn’t [House] votes that CAFTA needed, but it was time.”
In contrast, one example of on-the-ball CAFTA reporting comes from the AP’s Juan Carlos Llorca, who has filed a string of stories on the subject recently from Guatemala City. One such article gave a good overview of CAFTA’s ramifications for Central America, with Llorca writing that CAFTA supporters “fear the delay will mean painful business and trade losses in a region of widespread poverty,” and yet at the same time “the delay is good news for farm groups and others who fought the agreement, arguing it will ruin small producers and other local businesses.” El Salvador and Honduras are “scrambling” to enact CAFTA by Feb. 1, with Nicaragua expected to join in March, Guatemala in March or April, and the Dominican Republic not until July 1.
That brings us back to Costa Rica, the most intriguing setting for a fruitful story on CAFTA’s delays, if a paper of some ambition cared to write one. As the Times teased, “CAFTA has become a flash point in the presidential election campaign,” with former president and front-runner Óscar Arias “a strong supporter of the agreement [who] is expected to push the deal through the legislature quickly if elected. But opposition candidate Ottón Solis is running on an anti-CAFTA platform and has gained the support of public-sector unions and others opposed to the pact.”
The Wall Street Journal’s Mary Anastasia O’Grady explained a bit more in a story on January 6 (subscription required). Devoting two sentences to CAFTA, she wrote, “CAFTA approval is critical to Costa Rican progress because implementation will require breaking up the state-owned telecom monopoly, which has left the country’s communications infrastructure alarmingly inefficient.” (Said telecom and electricity monopoly, ICE, periodically takes the country hostage by going on strike, and its workers have threatened to do so again if CAFTA is approved by the Costa Rican legislature and ICE’s operations are privatized.)
Aptly calling Costa Rica the epitome of “stagnation and mediocrity,” O’Grady added, “The big problem that an Arias presidency will have to deal with is not unlike the challenge facing the rest of the region: With more than 80 percent of its budget going to public-sector wages, pensions, interest payments and higher education, the country’s infrastructure is dilapidated. Ports and roads are in abysmal shape.”
But that’s just the beginning. Here are a few more reasons why a new story on CAFTA’s delays with a focus on Costa Rica and its divisions over the pact would be compelling:
• The coming election. Arias, 65, who won a Nobel Peace Prize during his previous stint in power from 1986 to 1990, is vying to become the country’s first two-term president in 32 years, after a much-talked about change to Costa Rica’s constitution in 2003 gave ex-presidents the chance to run again. It is not clear whether he’ll get the 40 percent share of the vote he needs on Feb. 5 to avoid a runoff with Solis, the Citizen Action Party’s left-of-center candidate.
• The divide among Costa Ricans over CAFTA. La Nación, Costa Rica’s high-quality leading daily, reported recently that 51 percent of Costa Ricans now think CAFTA should be approved, up 8 percent from a year earlier. Demographically, however, the split is more dramatic. As La Nación detailed (in Spanish), men, students, people under 30 and people of high socioeconomic status are in favor, while women and residents of the rural areas surrounding the central capital of San José are opposed (not to mention those powerful public-sector unions). Small farmers fear they will be ruined with CAFTA, while the textile industry says they will be ruined without it. La Nación estimated that 18,000 people marched against CAFTA in San José on Nov. 18, while 20,500 marched in support of it a week later.
• The election and the debate over CAFTA (which the legislature will reconsider in February) is likely to mark a pivotal moment in the modern history of Costa Rica. The country, which has 4 million residents, has followed a “social development” model with an emphasis on peace, democracy, and education and health care for all since the civil war of 1948. But that model has lost its vitality, and while the nation is the wealthiest in Central America, most of its people remain overwhelmingly poor. (Per capita GDP in 2004 was just $4,500.) Costa Ricans have long benefited from cheap telephone service and generic drugs, making two of CAFTA’s major changes — the breaking-apart of ICE and increased protections for the intellectual property of large American pharmaceutical companies — hard to stomach. But the alternative seems to be more mediocrity and stagnation.
Just before Christmas, the United States’ newly installed ambassador to Costa Rica warned in an interview with La Nación that CAFTA could not be renegotiated and that Costa Rica would be the Central American country that would benefit most from the agreement — but its “marvelous reputation” would quickly take a tumble if it rejected the pact or did not proceed to approve it in a timely fashion like its neighbors.
Join America, the ambassador was saying, or be left out in the cold.
There is a story the American press has not done yet — a timely and complex example of the U.S.’s influence, through CAFTA, on a longtime ally.
Paging the foreign desk: Time to give those Mexico City correspondents a call. Their parachutes are ready.