Arias Vows To Push Through CAFTA

by Mike Godfrey, Tax-News.com, Washington

10 March 2006

After being officially declared as president-elect, Oscar Arias has vowed to ensure that Costa Rica plays a full part in the Central American Free Trade Agreement (CAFTA).

Doubt over Costa Rica's future government was ended after Oscar Fonseca, head of the Supreme Electoral Tribunal, announced that Arias, of the National Liberation Party, had garnered 40.92 percent of the 1.5 million votes cast in the February 5 poll - just over the 40% threshold needed to avoid a second run-off vote.

His main rival, former government minister Otton Solis, conceded defeat following the Supreme Elections Tribunal's rejection of his complaints of vote irregularities.

Speaking shortly after he was officially declared the winner of the elections, which went to a lengthy manual recount, Arias stated that his government "will not cede" any ground in its fight to push through CAFTA.

Under CAFTA, 80% of US exports of consumer and industrial goods will become duty-free in Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua, and the Dominican Republic, immediately, with remaining tariffs phased out over 10 years.

Costa Rica is the only country that has not yet ratified the agreement, which has already aroused protest from labour unions who fear job losses will ensue after the country is opened up to greater foreign competition.

Solis also supported CAFTA, but had promised to renegotiate the trade pact.

However, despite his determination to steer the agreement through the legislative assembly, Arias's efforts may be hampered by his lack of a majority by four seats.

Moreover, the Supreme Court has yet to decide whether CAFTA needs a two-thirds majority in order to be approved.

Arias, 65, served as economic advisor to President Jose Figueres Ferrer and acted as National Planning Minister between 1972- 1977. He served as Costa Rican President between 1986 and 1990, during which time he was awarded the Nobel Peace Prize after working to end armed struggles in other Central American countries.

Arias is due to take office on May 8.

Recommended