Attempt To Force Debate On CAFTA Sparks Constitutional Row In Costa Rica

by Mike Godfrey, Tax-News.com, Washington

24 February 2005

In something of an unprecedented constitutional move, members of Costa Rica’s Libertarian Movement Party have attempted to force through the Central American Free Trade Agreement (CAFTA) by introducing the pact into the Legislative Assembly for discussion, the Tico Times has reported.

The move has been regarded by many lawmakers as highly irregular, as such an action can normally only be undertaken by the President under the terms of the nation’s constitution. However the Libertarians have argued that this particular constitutional clause is open to interpretation.

President Abel Pacheco has angered supporters of the free trade pact, which will reduce trade tariffs on a number of agricultural and manufactured goods between Costa Rica, Ecuador, Nicaragua, Honduras, Guatemala and the United States, by insisting that his long-delayed tax reform bill is approved first.

Growing ever more impatient with the government, businesses (along with the Libertarian Movement Party, which is opposing the tax package) have countered that Pacheco’s stance on the issue will scare away foreign investors, and have warned that the ongoing delay in CAFTA’s approval will threaten the country’s economic prospects.

The LMP's ploy has also sparked a debate on the interpretation of certain constitutional clauses, which have traditionally been interpreted as stating that only the President has the power to decide when international treaties can be sent to the Legislative Assembly.

However, according to the Libertarian Party leader, Federico Malavassi, an analysis of the constitution’s text has concluded that this widely-held belief is “untrue.”

The existence of an additional article in the text which states that the initiative for enactment of laws can be taken by “any member of the Legislative Assembly, or by the Executive Branch through the Cabinet Ministers,” has further complicated the issue.

In any event, no action can be taken to address the matter of CAFTA and the constitution until the assembly’s ordinary session begins on May 1st.

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