Saturday, October 06, 2007

Free trade, on our terms

Tomorrow the people of Costa Rica will vote by referendum on accepting Costa Rica's endorsement of the US-Central American (+Dom. Rep.) Free Trade Agreement. The US has been using bilateral and regional free trade agreements as leverage to force other countries to sign deals on similar terms i.e. by saying to Country Y, "we're going to give country X this deal so they'll have an advantage over you unless you sign this deal too."

There are many problems with those mode of moving to freer trade, not least that it goes against the basic free trade principle of giving all your partners the same terms without any one of them having to negotiate for it. But George Bush is an Imperial Preference trader at heart.

Anyway, back to Costa Rica. Lest the people get too uppity and reject the deal, the White House has issued an extremely rare eve-of-voting statement regarding a vote in another country (the only precedent being their assistance to Mahmoud Ahmadi-Nejad). Included in the statement is the following --

With respect to trade preferences provided under the Caribbean Basin Initiative which will expire in September 2008, the United States has never before confronted the question of extending unilateral trade preferences to a country that has rejected a reciprocal trade agreement.

Voters in Costa Rica should be aware that many of those assuring Costa Rica of continued access to the U.S. market have consistently opposed measures that would open the U.S. market to goods from Costa Rica and other countries, whether through trade agreements or through trade preference programs.

i.e. if the voters reject the new deal, then we'll lose interest in continuing Costa Rica's existing trade access, but it won't be our fault -- it will be those awful alter-globalization meanies who say such awful things about the wonders of free trade. So it's a threat that they won't even take responsibility for implementing. Classy people.

UPDATE: The Yes camp just shades it, 51.6 to 48.3. In fairness to the White House, it should be noted that Peter Mandelson had been issuing similar-sounding threats to developing countries in the context of EU trade negotiations but (a) not right before referenda and (b) he subsequently caved. And more context from Brad DeLong, who's wary about having a vote but in favour of the trade deal.

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