Costa Rica Ready and Set to Join CAFTA

It has been a long and sometimes difficult road, but it appears that Costa Rica has finally complied with all CAFTA requirements. Amid citizen dissension and political stalling tactics, many worried that CAFTA’s provisions were unconstitutional and that the agreement could not and should not be signed into law. Finally, more than a year after the agreement’s ratification, the Sala IV, or Constitutional Court, has approved CAFTA’s final law requirement.Among the requirements to join the Central American Free Trade Agreement, Costa Rica had to open certain markets, such as telecommunications and insurance, up to international companies. Many Costa Ricans believed this to be unconstitutional, since those markets were governed by Costa Rica law and based on the constitution. Likewise, the constitutionality of the country’s last remaining bill, nicknamed “Project 12″, was called into question.

Project 12 discussed rights regarding intellectual property laws, which differed from those guidelines outlined by CAFTA. Yesterday, the Sala IV voted on the issue; five of the seven magistrates voted in favor of approving the new guidelines. The decision comes after months of hopping around the political system; in September, Project 12 was sent back to the Sala IV because the delegates had not consulted with the indigenous communities and the project was therefore deemed unconstitutional.

Now that the Sala IV has approved Project 12, the bill will return to Costa Rica’s Congress, where the delegates will debate it. Despite the tentative nature of this process, experts predict that the Congress will approve Project 12 next week. In 2009, Costa Rica will begin to see and feel the effects — both positive and negative, depending on one’s point of view — of CAFTA’s implementation.

One such effect can only do good, however. With an open market, the Costa Rican Electricity Institute (ICE), which currently has monopoly control over the country’s cellular phone network, will have competition. In addition to better service, newer technology and the possibility of better customer service (could it be?), ICE will finally offer the prepaid cell phone service that it promised in early 2008.

ICE asked the National Treasury for approval of $12.2 million in prepaid cell and telephone service, equivalent to 2.5 million new lines. Though ICE will not release the 5,000 lines promised for December, customers will soon have access to prepaid lines, paid in sums of ¢2,500, ¢5,000 and ¢10,000, approximately $5, $10 and $20. Best of all, these prepaid lines will be available to tourists or foreigners that can’t currently get a Costa Rican cell phone. All that will be needed is a GSM cell phone and a rented Costa Rican SIM chip.

CAFTA’s ratification and approval have been a contentious subject of debate for Costa Ricans, but it seems that the journey is almost at an end. Only time will tell what positive and negative changes are in store for the country, but at the very least, a bit of competition promises to infuse the markets with stronger, better services and service providers.

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Filed under: Costa Rica News on October 31st, 2008