- The Washington Times - Tuesday, December 16, 2003

Costa Rica yesterday temporarily broke off free-trade negotiations with the United States during a final round of talks, a setback for a pact with five Central American nations.

The United States in January announced free-trade talks with Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua, beginning the year with an ambitious agenda for regional and worldwide negotiations to lower trade barriers and protect investor rights.

But World Trade Organization talks collapsed in September, Free Trade Area of the America negotiations reached an ambiguous settlement in November and the bilateral deals started this year have failed to meet deadlines.

The Bush administration also had hoped to conclude free-trade agreements with Morocco and Australia but negotiations will drag into next year, pushing a congressional vote closer to elections.

“At a minimum, it’s going to be very difficult to pass [trade agreements] in an election year,” said a Republican House aide, who asked not to be named.

Costa Rica, the most economically advanced country in the region, had trouble opening insurance and telecommunications monopolies to U.S. investors, and could not strike a deal on some textile and agricultural issues, officials said.

“U.S. free trade agreements are comprehensive, meaningful agreements. They are not easy,” said Richard Mills, spokesman for U.S. Trade Representative Robert B. Zoellick.

Alberto Trejos, Costa Rica’s trade minister, said he was confident the two sides would resolve differences early next year. “We will be able to reach an agreement.”

The Bush administration’s trade agenda has found support in Congress. The White House won trade-promotion authority during the last election cycle by a one-vote margin. The authority allows the president to negotiate trade agreements and submit them to Congress for a yes-or-no vote.

And earlier this year, Congress easily approved free-trade agreements with Chile and Singapore.

“I do believe that the political conditions are very different with respect to [a Central American Free Trade Agreement],” said Thea Lee, chief international economist at the AFL-CIO, a labor federation. “We haven’t done head counts, but we absolutely think we can [block it].”

Despite obstacles, ministers from the four remaining Central American countries still hoped to wrap up talks last night or today and have Costa Rica join later.

“Hopefully we’ll have an opportunity, the four of us, to reach an agreement, and then wait for Costa Rica to join hopefully next month,” said Mario Arana, Nicaragua’s development, industry and commerce minister.


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