News Is My Business / March 2, 2015
By Larry Luxner
WASHINGTON — Costa Rica wants to expand its trade ties with the 15-member Caribbean Community (Caricom) as well as with Puerto Rico, said the country’s foreign minister, Manuel Antonio González Sanz, during a visit to the United States last week.
González was in Washington to meet with his U.S. counterpart, Secretary of State John Kerry, for the first time since the May 2014 inauguration of Costa Rican President Luis Guillermo Solís.
The 45-minute meeting focused on improving bilateral relations in the absence of a U.S. ambassador in San José. It was followed by a courtesy call at the White House with Ricardo Zuñiga, Obama’s National Security Council advisor on Latin America, and finally a wide-ranging interview at the Costa Rican Embassy.
“One of the purposes of my visit was precisely to look for ways to have a more permanent and fluent political dialogue between the two governments, and to encourage high-level visits and senators to come and visit Costa Rica,” González told us in the presence of Costa Rica’s envoy to the United States, Román Macaya, and the embassy’s deputy chief of mission, Alejandra Solano.
“We need to have these kinds of meetings on a more regular basis at the highest possible level. We also discussed the possibility of President Solís visiting Washington sometime in the near future,” he said.
González, noting that it’s been more than a year and a half since the departure of the last U.S. ambassador to Costa Rica, Anne S. Andrew, said his government is waiting patiently for the arrival of Andrew’s replacement, political appointee Stafford Fitzgerald Haney. A New Jersey businessman who donated money to Obama’s re-election campaign, Haney is one of several dozen nominees facing confirmation by the slow-moving Senate Foreign Relations Committee.
“We understand that there are internal processes which have to be conducted, but it doesn’t prevent us from moving ahead with our agenda,” said González. “Now with the new Congress, hopefully things will move faster than has been the case until now.”
During our interview, González pushed for the reform of the Central American Integration System (SICA in Spanish). Based in San Salvador, its eight members are Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama and the Dominican Republic.
“SICA has many institutions, but with very ineffective results. We need very clear leadership and very clear reform in terms of transparency and accountability, and we have proposed the complete review of the Tegucigalpa Protocols that serve as the legal basis for SICA,” said González, adding that in its 24-year history SICA has never had a secretary-general from Costa Rica, and that perhaps it’s time for a Tico to lead the bloc.
Yet another regional bloc that interests Costa Rica is the Caribbean Community (Caricom), with which Costa Rica signed an FTA back in 2004. He said Caricom’s 15 members — along with the rest of Central America — are natural customers for Costa Rican products, particularly for small- and medium-sized companies.
“We’ve talked a lot in the past about free-trade agreements, as if a small company in Costa Rica taking its first steps in the export business will enter the U.S. or European markets. It doesn’t happen that way. First, they have to focus on the Central American and Caribbean markets,” he said.
Late last month, Puerto Rico suddenly became a hot topic at the Community of Latin American and Caribbean States (CELAC) hosted by Costa Rica. While several presidents including Cuba’s Raúl Castro and Venezuela’s Nicolás Maduro mentioned the topic, Nicaraguan President Daniel Ortega took the unusual step of ceding his time to address the summit to Rubén Berrios, president of the Puerto Rican Independence Party, who urged CELAC members to support a motion before the UN General Assembly to rule on Puerto Rico’s political status.
Ortega’s decision to let a civilian speak at a summit reserved for heads of state irritated Costa Rica’s President Solís, who said the act broke with CELAC protocol.
“From our perspective, we have nothing to say about Puerto Rico’s decision to keep the status quo, become independent or become the 51st state. That’s for them to decide,” said González. “In addition, they’ve already had four referendums about their relationship with the United States, so the decision is very clear.”
In terms of actual trade and direct investment from Puerto Rico, the numbers are not encouraging at the moment, said Costa Rica’s foreign minister.
“We had a lot of business in the past with Puerto Rico,” González told us. “When they had the Section 936 program, a lot of synergies developed [through twin plants], but when that went away, things changed dramatically. Economically speaking, Puerto Rico now has its own problems.”
Even so, González singled out Lanco, a San Lorenzo-based paint manufacturer whose Costa Rican factory “keeps growing every day.” It’s located near San José’s Juan Santamaría International Airport, in a free zone formerly run by investors from Taiwan.
In fact, one of Costa Rica’s biggest foreign policy issues is its growing cooperation with China — a friendship that began in 2007 when then-President Oscar Arias Sánchez broke diplomatic relations with Taiwan after 63 years in order to establish ties with Beijing.
As then-foreign trade minister, González strongly supported that decision despite accusations that Arias had betrayed the Taiwanese.
“I had to deal with Taiwan, and it was not a very positive reaction and we did have some political pressure,” he recalled. “Taiwan was, at the time, the main investor in China and still is. Secondly, a small country like Costa Rica cannot skip any potential market just because of the political situation. Everybody does business with China.”
On Monday, Costa Rican lawmakers voted 45-6 to borrow $395 million from the Chinese government to finance the expansion of Route 32, the main highway from San José to the Caribbean province of Limón. The loan covers 85 percent of the $465 million cost of expanding the 107-kilometer highway from two to four lanes; the Costa Rican government will fund the remaining $70 million.
But China offered the loan on the condition that the project be developed entirely by China Harbour Engineering Company using only Chinese workers.
“When you have a loan, they want you to use as many Chinese companies as possible,” he said, adding he hopes construction will start before the end of this year.