CAFTA Extension for Costa Rica

Written by Thomas

President Arias receives CAFTA extension approval
Costa Rica Receives 7 month Extension to Approve CAFTA

President Arias announced yesterday that the Costa Rican government has succeeded in their application for an extended deadline for which to pass the laws that will ratify the Central American Free Trade Agreement (CAFTA).

The original deadline for the 12 laws of the free trade agreement was set for tomorrow, 29th February, however with only 7 of the laws passed so far through the legislative assembly, the Costa Rican government decided to ask the other members of the free trade agreement for a deadline extension.

The extension has been granted for the remaining 5 laws to be passed within the next 7 months with the new deadline falling on October 1st 2008.

CAFTA has proved to be a topic that has been very close to many Costa Rican’s hearts. Some are eager to see changes to certain markets and explore new business ventures with the United States, whilst others have been worried about the economical impact the change may have on smaller and medium sized businesses, especially farmers.

This was particularly evident when the Costa Rican government held their first ever referendum on October 2007 where approximately 60% of the nation turned out to cast their vote, more than the previous Presidential elections. The result was outstandingly close with the ‘yes’ vote for CAFTA winning by the slimmest of margins, about 3%.

One of the most controversial laws has been the telecommunications law that would open market open to competitors. The market is currently owned by state-monopoly ICE (Costa Rica Electrical Institute) which is the only company to currently provide telephone lines, cell phone coverage and internet access for Costa Rica. With this change new international telecom companies will be able to compete to offer these services.

Mobile phone firms such Claro and Mobil will be particularly interested in a move to Costa Rica having already established themselves as popular network provider across the Central Americas and with television campaigns that have been visible to the Costa Rican general public for years, provides them with a good platform to enter the market.

CAFTA has already been implemented by fellow Central American countries El Salvador, Honduras, Nicaragua, Mexico and Guatemala as well as the Dominican Republic, leaving Costa Rica as the only nation yet to have the free trade agreement approved and in place.

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