CAFTA | Ructions over US free-zone demand. Guatemala is up in arms against the US demand that it phase out its free zones within Cafta, together with El Salvador and Costa Rica. The same is not required of Honduras and Nicaragua on account of their lower per-capita income. Guatemala is invoking rights under WTO rules to maintain its free zones and associated subsidies beyond 2009, arguing that its per-capita income has fallen since last year. El Salvador and Costa Rica feel that this would leave them at a great disadvantage.
COSTA RICA | Sharp turnaround in agriculture. Costa Rica's agricultural sector is expected to grow by 6% this year, after having contracted by 2.1% in 2002. Much of the improvement is due to better prices for the `traditional' export products, like bananas (of which Costa Rica is the world's second-biggest producer) and coffee. In the first half of the year, agricultural export earnings brought in US$1.1bn, or 10.2% more than in the same period of 2002.
A notable feature of the turnaround has been the great increases in exports of `non-traditional' products like palm oil (+79%), concentrated fruit juices (+39%), pineapple (+24%), melon (20%) and ornamental plants (22%). Costa Rica is the world's biggest exporter of pineapple.
DOMINICAN REPUBLIC | Military continue dollar drive. The military-led drive to lower the dollar rate continued last week with the closure of a number of exchange houses on the grounds that they lacked proper permits, a move applauded by the larger exchange house and banks glad to see some competition disappear.
Between 5 and 12 December the dollar rate has fallen slightly, from RD$39-40 to RD$36-37, still far from the RD$30 target set by President Hipólito Mejía.
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