by Rod Hughes
This must irk Costa Rican President Oscar Arias no end…
Panama’s National Assembly has ratified a free trade treaty with the United States barely two weeks after it was signed in the Organization of American States headquarters in Washington D.C. June 28. And the issue was not in doubt—58 Panamanian congressmen voted for it and only three against.
Of course, the U.S. congress must, in turn, ratify the pact for it to go into effect and now, with the Democrats having the majority in both houses, that may be harder than with the Central American Free Trade Agreement (CAFTA), which passed with flying colors. The Democrats have shown themselves fearful of exporting domestic jobs as a result of free trade pacts, although outsourcing began long before free trade treaties came into fashion.
But even without the chance of U.S. congressional opposition, CAFTA has had a rocky road here and President Arias must feel bruised by the jolts he has received. The other Central american countries included in CAFTA have long since ratified the treaty with Costa Rica being the sole holdout. The pact has been the subject of street demonstrations pro and con and it is hard to remember an issue that has so divided the country.
CAFTA was finalized and signed during the administration of former President Abel Pacheco. But he faced a Legislative Assembly so splintered into small parties that he was hard-pressed to get his pet tax reform bill passed. (It was later nullified by the Constitutional Chamber of the Supreme Court as a sort of ironic anti-climax.) By the time the last year of his term rolled around, Pacheco had largely given up on getting anything out of his squabbling congress.
Ratification of CAFTA might have had the 38 votes necessary for Arias to pass it through the Legislative Assembly, but early this year a movement arose to hold a referendum on the treaty and Arias acceeded. The Legislative Assembly, possibly relieved to let the voters decide, quickly agreed. The vote is now scheduled for Oct. 7.
One of Panama’s incentives to pass their treaty was the hope of backing for the proposed $5.2 billion expansion of the Panama Canal.
(See other stories on CAFTA in our archives.)