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Business & Economy Briefs

Tico free trade referendum nip and tuck

Opposition to CAFTA gains on gaffe that forces VP to quit

by Eric Jackson, from other media

A major gaffe in the "yes" campaign for the October 7 Costa Rican national referendum on the CAFTA free trade pact with the United States has forced the resignation of Kevin Casas as the country's second vice president and shifted the momentum, which had turned in favor of the approval in July August, back toward the "no" side. The most recent published polls at the time that this article was written had the two sides statistically tied.

If there is a 40 percent turnout of votes cast (blank or spoiled ballots don't count toward the quota), the result of the referendum becomes binding. A lower turnout leaves the decision up to the legislature, where CAFTA supporters dominate, and President Óscar Arias, who supports the agreement.

On September 22 Casas stepped down after a confidential campaign memo urging the use of scare tactics by the "yes" campaign came to light early in the month and continued to divert the nation's attention. Arias himself and the pro-CAFTA campaign in general hadn't taken the advice, emphasizing instead arguments that Costa Rica's export and high tech sectors would get a boost from the deal and that it would be unlikely that the country could get a better deal in a subsequent negotiation with the United States.

The "no" campaign has waged a much more fear-based campaign, predicting that under CAFTA Costa Rican agriculture would largely be destroyed by subsidized food imports from the USA and that small and medium-sized businesses would be driven out by US-based corporations. The "no" campaign has also provided an outlet for those Ticos who resent the wealthier American retirees who brought a lot of business to the country but have also driven up land prices in many places and from time to time been at the center of controversies real or contrived.

A University of Costa Rica telephone poll conducted between September 7 and 13 found the "yes" side having lost the lead it had held since 2005 and trailing the "no" side 35.7 to 34.5 percent, with 23.5 percent undecided and 6.3 percent saying they intended to cast blank or spoiled ballots. The gap between supporters and opponents was within the margin of error, and there are a couple of major questions about the methodology and findings. First, a telephone poll disproportionately excludes the poor who don't have fixed line phones and the younger voters who often use only cell phones. It is presumed, not necessarily with any sound basis, that less affluent voters will be more likely to vote "no." The usual trend is for younger voters to have a lower turnout, and although the most visible presence of young activists is in the "no" campaign, it's not necessarily the case that they are winning their age group. Second, it would be unusual if all of those who say they are undecided really are --- in most elections the undecideds tend to break mainly in one direction, when candidates are involved, usually against the incumbent if there is one.

Another poll commissioned by the Costa Rican daily La Nacion, taken between September 12 and 18 by the polling firm Unimer, found the "yes" side ahead 49.1 to 46.3 percent, with the "no" support having surged 10.3 points and the "yes" fallen 6.9 points in one month. The gap between support and opposition in that poll was also within the margin of error, and showed those undecided in August breaking toward the "no" side.

Both polls, however, were taken before the vice-president's resignation and the two sides have been trying to impart very different spins on the significance of that event. The CAFTA supporters claim that it has removed a false issue from the opponents' set of arguments, while the "no" people portray the resignation as the desperate move of a collapsing "yes" campaign.

Once the result of the Costa Rican referendum is in, its effect on US congressional consideration of free trade pacts with Panama, Peru and Colombia will become another interesting question. A "yes" victory would lend credence to the argument made by free trade supporters in the United States that Latin Americans want economic integration with the USA and thus that rejection of such deals would hard US relations with Latin America. A "no" victory might serve to deflate such arguments.

WTO reviews Panama's economy, warns of canal expansion risks
PRD pushes water privatization, runs into opposition

El Valle's market changes with tourism boom

Free trade campaign gaffe forces Tico VP to resign
Business & Economy Briefs