- The Washington Times - Sunday, January 25, 2004

The United States yesterday wrapped up trade talks with Costa Rica, putting in place an important piece of a wider Central America agreement.

Four other nations — El Salvador, Guatemala, Honduras and Nicaragua — last month finished negotiations on a Central American Free Trade Agreement, a deal to eliminate duties on all consumer and industrial products and ease commerce for farm goods and services.

Costa Rica, the most prosperous and stable of the nations, had delayed the agreement because of U.S. demands that it quickly open up its insurance and telecommunications markets, where government-run companies have a monopoly. It also wanted better access to the U.S. market for its clothing, fabrics and sugar than originally offered.

The two sides overcame their differences yesterday afternoon after days of intense bargaining. Costa Rica agreed to the gradual opening of private network services, Internet services and wireless services in telecommunications, and to the complete opening of its insurance market by 2011, U.S. trade officials said.

“With each Central American nation, we worked to tailor market access provisions to reflect individual circumstances, and that work is now complete with Costa Rica,” U.S. Trade Representative Robert B. Zoellick said in a statement.

The Bush administration now hopes to wrap up negotiations with the Dominican Republic so that the Caribbean nation can be added to the agreement.

Trade officials yesterday said they expect to publish the agreement text for the five Central American nations this week. Once the text is available, President Bush must give Congress a 90-day notice that he intends to sign the agreement. After his signature, he would submit the pact to Congress where, under Trade Promotion Authority granted in 2002, legislators can vote yes or no but cannot change the agreement.

It is not clear whether there would first be a vote on the five Central American nations and then a second vote on the Dominican Republic, or if the administration would submit a single package to legislators.

Free-trade agreements with Chile and Singapore last year passed both houses of Congress by comfortable margins. But Democrats who voted for those pacts have promised to fight what they call a lack of safeguards for workers and organized labor in the Central America agreement. Important industry sectors, such as textiles and sugar, are worried about losses from new competition in Central America.

“Any threat to the operation, or the extension, of current U.S. sugar policy … is a direct threat to the survival of our industry, and will require American sugar producers to strongly oppose CAFTA and any other [free-trade agreement] with comparable provisions,” said a Jan. 15 letter to Mr. Bush signed by 75 sugar companies.

“The textile portion of this agreement is loaded with side deals that give away U.S. jobs,” Jim Chesnutt, chairman of National Spinning Co., a yarn manufacturer, said last month on behalf of the industry.

But a wide swath of the private sector supports the agreement.

“The U.S.-Central American [free-trade agreement] cannot and should not be expected to cure all problems, but it can be a force for positive change by generating new economic opportunities, new investment and new hope for the region,” Boeing, IBM, Wal-Mart and about 100 other firms said Friday in a letter to House Speaker J. Dennis Hastert, Illinois Republican, urging approval this year.

U.S. exports from January to November 2003 to the five nations reached almost $10 billion, while imports were $11.3 billion, according to U.S. government figures. Clothing, fabric, farm goods such as fruit, corn and coffee, and some electronics are among the most heavily traded goods.

Costa Rica accounts for one-third of U.S. trade with the five CAFTA countries.

The Bush administration has moved aggressively to open markets, turning especially to bilateral agreements since World Trade Organization talks broke down in September.

Mr. Zoellick is trying to re-energize the global negotiations, and sees the smaller deals as lending momentum to wider talks.


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