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CAFTA Works in Costa Rica

Jan 23, 2015
0 Comment
Juan Sancho

Or does it? The initial and apparent success of CAFTA on trade seems to be a major plus for Costa Rica, but there could be a negative flipside.

It has been six years since CAFTA was formed, and the voluminous benefits of the trade created by its inception are clear. Costa Rica and the United States have benefitted the most from the Dominican Republic-Central American-Free Trade Agreement (CAFTA-DR) in that forty percent of all exports to the United States come from “The Rich Coast,” and jobs created in the sectors of business services, knowledge-intensive services, education, medicine and the public sector have seen an uptick, as well.

In 2013, Costa Rica exported 11.9 billion dollars worth of goods to the United States, and it imported 7.2 billion dollars in products from the USA. These are the highest numbers of any of the countries involved in the pact, but this is where the good news ends. CAFTA-DR is more or less modeled after NAFTA, and the unsuccessful policies associated with that agreement. The issues that continue to plague relations between the United States and Mexico seem likely to creep into the foreground over time.

One of the cons that has already presented itself in regards to the agreement is the ever pressing issue of talented and intelligent young Costa Ricans making their way north and never looking back. Costa Rican citizens with the potential to bring new ideas, better working methods or to be of value in the education system among other factors are heading elsewhere, and leaving in their wake an absence of intellect and inspiration.

Along with a growing economy comes the issue associated with wealth gaps. Those that come from a higher income are going to continue to pull further and further away from the lower income earners, and the disparity will inevitably lead to problems among workers and owners. This has become an apparent issue time and time again, and, most recently, in the worldwide occupy movements that started in the United States and quickly passed to many countries around the world.

As of right now, CAFTA is bringing new economic success to Costa Rica, but the observant are taking notice of its pitfalls and becoming more outspoken. It could also lead to issues of exclusivity that could cause problems if there is another economic downturn in the west. That leaves a relative degree of uncertainty that never seems to play well in the market. Vamos a ver.

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