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EDITORIAL: Who Really Benefits From the CFTA? [The Tico Times, San Jose, Costa Rica](Tico Times, The (San Jose, Costa Rica) Via Acquire Media NewsEdge) June 02--Shouldn't a nation that sells itself as a human rights expert at least discuss the issue? David and Goliath are in business. China, the world's most populous nation, convinced Costa Rica that in spite of obvious asymmetries, both are equally strong in trade matters. Costa Rica believes it has enough experience with negotiating free trade deals to maximize benefits from China. Believing that the recently approved Free Trade Agreement with China (CFTA) will boost Costa Rica's economy is either naive or disingenuous. Numbers paint a more accurate picture than official statements. According to data from the Foreign Trade Promotion Office and the Central Bank, Costa Rica's trade benefits trail China's. From 2006 to 2010, Costa Rica exported $3 billion in raw materials and limited goods to China and bought $3.9 billion in manufactured products from Chinese producers. In a nutshell, Costa Rica buys more than it sells. Costa Rica exports to China raw materials that are used to make what Ticos buy. Perhaps more interesting, most exports to China are generated by microchip manufacturer Intel, located north of San Jose in Heredia. If Intel is removed from equation, export figures look pretty sad. So, who really benefits from the pact? Even though trade and industry chambers have collectively expressed their excitement about the new agreement, saying it will create more jobs and attract foreign investment, the truth is Costa Rica's slingshot is no match for the towering giant. It is unrealistic to believe China will actually purchase important amounts of Costa Rican goods. The CFTA covers many goods Costa Rica doesn't even produce. China can be expected to do what it always does, which is purchase mainly raw materials from Tico exporters. Local added-value products might not stand a chance in Chinese markets because no one can beat them on prices. Costa Rican observers should worry, because it's likely that many small entrepreneurs will have to begin importing Chinese products or risk going out of business. This is the "invisible hand" of free trade at work. Costa Rica also lacks an effective system to monitor unfair trade practices. China holds the record for complaints filed at the World Trade Organization. If Costa Rica is serious about free trade, it desperately needs an oversight board to oversea the enforcement of trade rules. Without it, local industries could risk losing their market share should China begin dumping products. Consumers could also be at risk if contaminated Chinese goods are sold in the country, as has happened it the past. Aside from these economic concerns, it's also important to ponder political implications. For years, Costa Rica has marketed itself in the international community as a center for the promotion and respect of human rights. Examples of this are numerous. Former President Oscar Arias even won the Nobel Peace Prize. Arias was a leading figure behind encouraging the CFTA, and he even got a beautiful $100 million stadium from China. His bigger dream -- free trade with China -- is now realized. But what about China's track record on human rights? Shouldn't a nation that sells itself as a human rights expert at least discuss the issue? It's no secret that after President Laura Chinchilla signs the agreement, Costa Rica will be supporting and financing a government known for egregious violations against political and human rights. The elimination of tariffs will save Chinese authorities money, which however insignificant, could be used to imprison Chinese citizens who dare defy the system. For every cheaper purchase around the world, the Chinese government gets stronger, and underpaid workers continue suffering inhuman labor conditions. Maybe the biblical analogy is inaccurate. David fought the oversized bully. China poll 54082 61448 full Is China good for Costa Rica? 0 Yes, check out the new National Stadium 1 No, look at China's human rights record 2 The relationship is too new -- can't judge Vote ___ To see more of The Tico Times or to subscribe to the newspaper, go to http://www.ticotimes.net/. Copyright (c) 2011, The Tico Times, San Jose, Costa Rica Distributed by McClatchy-Tribune Information Services. For more information about the content services offered by McClatchy-Tribune Information Services (MCT), visit www.mctinfoservices.com, e-mail [email protected], or call 866-280-5210 (outside the United States, call +1 312-222-4544) |