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Free «Costa Rica under CAFTA» Essay Sample

Costa Rica is a country in Central America bordering on Panama in the south east and Nicaragua in the north. The country covers about 51,060 sq km and enjoys a humble growing economy which gets boost from the Central America Free Trade Agreement (CAFTA). This treaty was signed in 2005 between the U.S. and five Central American nations, namely Nicaragua, Honduras, Guatemala, El Salvador, and Costa Rica together with the Dominican Republic. The treaty was extensively reciprocal and comprehensive as it defined thorough rules governing environment, labor, investment, intellectual property, government procurement, service trade, and also market access of goods. The primary objective of the treaty was to create jobs, provide economic security and stability together with the increasing international trade. However, the society is divided into the supporters and opponents of the Central America Free Trade Agreement (Costa Rica).

In the Central America Free Trade Agreement, there are numerous basics of this trade accord that emerge to be positive. The debate concerning the CAFTA in Costa Rica took a long time; in fact, the treaty was endorsed in the country on January 1, 2009. The debates played a key role in amending the agreement to cover the country’s interests. It was enacted that all the products were to be traded under the treaty, and there was implemented liberalization through tariff fee quota expansion and tariff reductions. Costa Rica benefited by demanding that tariffs should not to be enacted on fresh onions and potatoes which eventually came into effect. This exemption from tariffs resulted in an enormous inflow of imports to the country thus increasing trade and economic stability (Global Exchange).



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The treaty also offers an inventive section on environment that is of importance as it helps in preventing practices that are damaging to the environment. Moreover, trade deregulation and liberalization, particularly of the rice sector in the country, will promote sustainable development through protecting the wetlands and diminishing the quantity of money underprivileged households expend on rice Another positive outcome resultant from the diminution of tariffs is the overall export growth. The scientific preparation that farmers undergo will let them to become improved crop producers. This will bring out added revenue and consequently, more funds to add to the general economy of the nation (CAFTA-DR).

Basically, this agreement is seen to allow a number of safeguards, application of phyto-sanitary and sanitary measures as well as providing trade capacity through building technical backing from the U.S. Moreover, through the debates, it was revealed that the treaty would create new economic prospects by promoting transparency, plummeting barriers to services, opening markets as well as eliminating tariffs. It also assists in furthering local integration and facilitating investment and trade amongst the seven countries involved.

However, this treaty has faced criticism as it is seen to impose the unsuccessful strategies of the North American Free Trade Agreement (NAFTA) all through Caribbean and Central America. The accord would challenge workers’ rights, oblige numerous family farmers to move off their farm land, and eventually lay the basis for the extension of NAFTA all over the hemisphere. Therefore, CAFTA expands an already confirmed disaster to five more Central American nations. A decade under NAFTA has revealed how destructive these treaties can be for the environment and working families. For instance, in the U.S., close to above 766,000 of people lost their jobs as a result of NAFTA. Thus, this agreement is foreseen to bring similar disaster to the Central American countries (CAFTA-DR).

Costa Rica is well-known for its extensive history of social equality, its comparatively low levels of poverty, its immaculate natural resources, and national parks. Unluckily, everyone of these accomplishments is highly threatened by the CAFTA treaty. This treaty contains investors’ rules which make governments face impossibilities when it comes to giving preferences to the public service providers. The domestic regulations protecting the common citizens in terms of basic utilities, health, and even food might be considered to be barriers to free trade thus open to confrontation by multinational corporations. This agreement paves way for the privatization of public services; for instance, there was proposition to open the telecommunication sector of the country to foreign investors which generated massive public outcry. In addition, this public telecommunication sector offered citizens the affordable services, but when the CAFTA sets, it will bring in steep competition from foreign corporations thus increasing prices to clients as well as layoffs (Ordóñez).

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CAFTA encloses no significantly enforceable principles that may save nations from reducing their public healthiness and improve workplace protection as well as environmental regulations and laws with the aim of attracting investment. Countless Costa Ricans are too troubled that the laid down investment provisions encompassed in the CAFTA may well intimidate the nation’s elevated environmental standards. Recently, the Costa Rican government rejected the United States-based Harken Energy Corporation proposition to carry out offshore oil searching due to an extremely negative ecological impact evaluation of the project. Thereafter, the company attempted to litigate the Costa Rican administration for $57 billion for rejecting their proposed project. This is seen as the expansion of corporate power by the agreement where companies are given mandate by the treaty to sue governments which prevent them from doing business in their countries (Global Exchange).

The United States is seen to promote CAFTA as an instrument to boost democracy; however, in reality, it would weakens judicial institutions through creating supra nationalized machineries for the U.S. corporations to detour the nation’s courts and litigate the Costa Rican government when they consider their earnings are being debilitated by regulations. Such measures would injure the already established democracy in the nation and bring out conflicts amongst countries within the trading block.  

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This agreement pact offers many prospects ranging from economic growth, democracy enhancement, as well as fostering regional cooperation. Nevertheless, it should not be overseen that the treaty brings in challenges which if not checked would put the already established economies and democracy in Costa Rica under threat. This treaty puts monetary values of large corporate interests at the helm while undermining the human values of workers’ rights, environmental protection, and fair trade. Much needs to be done on this agreement for it to be seen as helpful to the middle-leveled economies.


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