Crucially, Costa Rica agreed to end the monopoly held by the state telecoms company, the Instituto Costarricense de Electricidad (ICE), in various areas. The businesses to be opened up are: the internet; global business networks; and cellular telecoms. The government is hinting that this is only a start, and that if the ICE becomes stronger over the next year, more services may be liberalised. The Costa Rican delegation claims to have cleared all these concessions with Pablo Cob, the president of the ICE.
The two sides stressed that the issue that scuppered the negotiations before Christmas - the US demand that Costa Rica end the government monopoly over insurance - has only been touched upon. They expect the issue to be sorted out at a meeting between Anabel González, the chief Costa Rican negotiator, and Peter Allgeier, the number two at the USTR.
Costa Rica shocked the US when it pulled out of what was supposed to be the final round of the multilateral negotiations for a Central American Free Trade Area (Cafta) with the US on 16 December. Costa Rica was in partnership with four other Central American countries: Guatemala, El Salvador, Honduras and Nicaragua.
Costa Rica stuck to its position in agriculture. On rice, the other countries agreed to allow the US a quota that will rise each successive year. The original position was to cap US imports at 20% of demand. The other countries have also accepted higher quotas than Costa Rica would for US chicken exports. Costa Rica is hoping to be able to get even easier access to the US for its sugar, beef and ethanol, though it does not want to make many concessions in allowing imports in markets which interest the US agribusiness lobby, such as potatoes and onions. The Costa Ricans hope that they will do better than the other Central Americans, who were allowed to double their sugar exports to the US.
Sorting out a deal on agricultural products was still proving a bit sticky. The dairy industry was delighted that it would have 20-year protection from US imports: it thought that it would only be able to get 15 years at most. On the other hand, the two sides had not reached agreement on edible oils, though they seemed close. The Costa Rica palm oil lobby is sticking out for a deal on its terms.
Costa Rican businessmen were delighted that the government was standing up for them. The government liaised closely with the private sector: Costa Rican officials talked to the private sector after each round of talks with US officials. Before each round, the officials also had briefings with private sector experts to see what would be acceptable and what should be rejected.
Key Costa Rican industries, notably pharmaceuticals and agrochemicals, are unhappy about US rules on patents. The Central American country has developed a considerable generic drug and chemicals industry: it is annoyed that the US is insisting that generics can only be produced years after sales of that medicine or chemical begin in that market (five years for medicines, but 10 years for agrochemicals). The Costa Ricans would prefer that the clock started ticking after the launch of the product anywhere in the world.
Fiscal position
The government's total tax revenues were up by 18.4% in 2003. Income tax revenues were up by 26%. Spending, on the other hand, was up by only 10.7%. This means that the country's primary surplus, (ie, excluding interest payments) was up four fold, at C/81.8bn (US$196m).
If interest is included, the fiscal deficit was C/215.5bn (US$515m). This was a substantial (10%) improvement on 2002. Domestically, the government is hopeful that its tighter fiscal policy will lead to lower interest rates.
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