CAFTA Wins in Razor-Close Costa Rica Vote

Editor's Note: On Sunday, in the first ever public referendum on a trade agreement, Costa Ricans approved CAFTA by a 51-48 margin. Opposition organizers have asked for a recount. Below is a press release issued by Public Citizen.

The depth of public opposition to North American Free Trade Agreement (NAFTA)-style pacts was demonstrated Sunday by Costa Rica's massive "no" vote to CAFTA despite a intensive campaign led by the country's president, months of deceptive radio and television advertising in favor of the pact, and a threatening statement issued Saturday by the White House, Public Citizen said today.

The strong vote against CAFTA likely will fuel growing opposition to another Bush proposal now before Congress to expand NAFTA to Peru. The Peru Free Trade Agreement (FTA) contains the same foreign investor privileges, service sector privatization, agriculture and other provisions that fueled Costa Rican public opposition.

"That nearly half the public in Latin America's richest free-market democracy opposed CAFTA despite the intensive campaign in favor of it should end the repeated claims that pushing more NAFTA-style free trade deals is critical to U.S. foreign policy interests in the region or helps the U.S. image," said Lori Wallach, director of Public Citizen's Global Trade Watch division. "This vote also debunks the claim that these pacts are motivated out of U.S. altruism to help poor people in trade partner countries, given that many of the people in question just announced that they themselves don't want this kind of trade policy. This policy, supported by the elite, will help foreign investors seize control of their natural resources, undermine access to essential services, displace peasant farmers and jack up medicines prices."

Preliminary results showed that those opposing CAFTA garnered just over 48 percent of the vote and those for it garnered under 52 percent. The anti-CAFTA vote received the majority in most rural regions, where fears about campesino displacement drove opposition to the pact. The pro-CAFTA vote won narrow majorities in most urban, populous regions, where Bush administration's threats made Thursday and Saturday were widely covered by the media despite a legally mandated black-out on advocacy for or against CAFTA in the press. As of Monday morning, the "no" campaign had not conceded and was awaiting a partial recount on Tuesday and an investigation into polling station irregularities.

Citizens of El Salvador, Honduras, Nicaragua, Guatemala and the Dominican Republic had no opportunity to voice their own views of CAFTA. Despite massive, long-running public demonstrations against CAFTA in those countries - which resulted in protestors being killed by the police in Guatemala and a legislature fleeing its own building to hold the vote in a downtown hotel in Honduras - legislatures in those countries ultimately ratified and implemented CAFTA by mid-2006.

In Costa Rica, the CAFTA debate coincided with that nation's presidential election. With fair trade presidential candidate Ottón Solís running against CAFTA-supporter and Nobel-Prize winner Oscar Árias on a campaign focusing on the widely unpopular NAFTA expansion, CAFTA never came to a vote in Costa Rica. Early in 2007, after Árias narrowly won, Costa Rica's legislature passed a measure establishing a national referendum on whether Costa Rica should enter CAFTA.

That Sunday's referendum resulted in narrow passage is not surprising given considerable intervention by the Bush administration and a massive, well-funded campaign for the pact led by Costa Rica's president and pushed heavily by the corporate sector and much of Costa Rica's media. The Bush administration repeatedly threatened to remove Costa Rica's existing Caribbean Basin Initiative (CBI) trade preferences if the public rejected CAFTA, even though the program was made permanent in 1990 and only an act of Congress could terminate it. (A tiny percentage of Costa Rica's U.S. exports enjoys duty-free benefits under a CBI add-on program that was approved in 2000. The tremendously popular program, which covers nearly two dozen countries and cannot be removed for rejection of an FTA, is set for renewal next year.)