Central American Free Trade Agreement

NO TLC sign in a neighbors windowOn Sunday (10/6) Costa Rica is holding a nationwide vote on a referendum. The question at hand is whether Costa Rica should join the Central American Free Trade Agreement (CAFTA), known in Costa Rica as Tratado de Libre Comercio (TLC).  In short, this is a regional free trade agreement with the U.S. The agreement—which would reduce or eliminate taxes and tariffs on imports—must be approved by each country’s legislative branch. To date, Costa Rica remains the only country that has not ratified the CAFTA.
 
NO TLC graffiti on the sidewalksOther CAFTA countries — El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic — have already ratified the agreement. Only Costa Rica has let its voters decide.
 
The referendum has split the nation, with Costa Rican President Oscar Arias and some businesses saying TLC will bring investment and jobs. Opponents says it will mean a flood of cheap farm imports and limit the country’s sovereignty by taking investment disputes to international arbitration.
 
NO TLC sign on the lightpost next to our schoolThe hard-line leftist in Central America, Fidel Castro (President of Cuba), Hugo Chavez (President of Venizuela) and Daniel Ortega (President of Nicaragua), have all publicly called for CAFTA’s defeat in the referendum. This is bolstering the concept that a NO vote on Sunday is a protest vote against the U.S. About 100,000 Costa Ricans turned out last Sunday to protest the pact, a huge number in a country of 4 million. The “Yankee go home” sentiment of the NO TLC side is prevalent and Americans have been quietly encouraged to stay indoors on Sunday.
 
There have been declarations by both the NO and YES sides of the issue.  NO TLC says that if they lose that their will be violence, strikes and protests.  The Yes TLC side has indicated that if they lose that the government will go on strike and that vital services will be shut down.
 

Either way this is a very interesting time to be here. The TLC vote has been described as the third biggest event in Costa Rican history, behind only their independence from Spain and their 20th century civil war.