Reelected President of Costa Rica twenty years after his first presidency, Nobel Peace Prize winner Oscar Arias has brought the Central American nation back to the forefront of the global stage. Costa Rican Minister of Foreign Relations H.E. Bruno Stagno discusses the Arias administration’s efforts to protect the environment and foster peace and development

The Diplomatic Letter: Mr. Minister, you stand out from other foreign diplomats in that you were born in Paris and attended university for a time here in France. Could you describe your own special ties to France for our readers? With our countries already cooperating very actively, are you looking to boost Franco-Costa Rican ties in any particular areas, such as cultural exchanges, tourism or expanded political dialogue?

H.E. Bruno Stagno: I was indeed born in Paris and did part of my university studies here. I also began my career in Paris, in my country’s foreign service at the Consulate of Costa Rica. I am also married to a French woman, so I have a very strong emotional bond with France as well as deep respect for this country.
I would obviously like to see France heighten its profile in Costa Rica, both as a partner and an investor, with the aim of strengthening our cultural and trade ties and getting more French companies involved in the various public works and infrastructure projects that have been launched in our country.
As far as our political dialogue is concerned, we would like to seize the opportunity presented by the upcoming French presidency of the European Union to reenergize and push forward the ongoing negotiations between Central America and our European partners, with the goal of signing an Association Agreement in the first quarter of 2009.
I would also like to see us work even closer with France in negotiations on climate change and sustainable development.

T.D.L.: The Central America-Dominican Republic-United States Free Trade Agreement (CAFTA-DR) was a key issue in the campaign that resulted in the reelection of President Oscar Arias on 5 February 2006, nearly twenty years after his first term in office. Why do you think this accord has continued to spark such wide debate, since its approval by referendum on 7 October 2007?

H.E.B.S.: With the referendum held in October 2007, Costa Rica confirmed its intention of joining the free trade agreement between Central America and the United States. Working within the framework of the democratic process guaranteed by Costa Rica’s political system, the “implementation agenda” for this treaty has been under debate by our national legislature, both before and after the referendum. The debate over various reforms (most notably concerning the telecommunications and insurance sectors) has stretched beyond the deadline we were initially given. Costa Rica was thus recently granted a 7-month extension, starting on 1 March 2008, to push forward with this debate and win approval for the 12 projects that must be carried out in order to put the free trade agreement into force, eight of which were approved on the first reading.

T.D.L.: Costa Rica was the last Central American country to ratify the CAFTA-DR. Is there a specific timeframe for implementing this agreement? Can you tell our readers exactly what this accord encompasses, and how it will help create new jobs? How do you respond to critics who say this agreement could have a negative impact on the agriculture, fishing and textile industries?

H.E.B.S.: As I explained earlier, the CAFTA-DR will come into force once the reforms demanded by the deputies have been adopted. In recent years, the number of foreign and national companies working in Costa Rica has risen significantly in as this process has moved forward. The implementation of this treaty will no doubt boost this trend by fostering productive ties, alliances and new business projects, not only between Central American companies but also between Central American and U.S. firms.
The expansion of interregional exchanges will help to create more jobs, improve overall competitiveness and reduce unemployment. Our country’s efforts to open up its economy have enabled us to bring down unemployment to 4.8%, which is, according to the International Labour Organization (ILO), the lowest rate in all of Latin America and the Caribbean. These results should be shored up even further through easier access for Costa Rican products to the U.S. market, by spurring wider bilateral trade and greater investment flows.
With regard to the textile sector specifically, Costa Rican production has become highly specialized and has cornered a variety of market niches, making it very competitive on both the American and international markets. In fact, the Costa Rican textile sector has adapted very well in recent years to circumstances both inside and outside the country. First, our country has successfully transitioned to an economy founded no longer on labor intensive production, but on a skilled labor force that can produce goods and service with high added value. Second, it has adapted very well to growing competition from emerging economies such as China and India. We consequently have a textile sector that is ready to meet today’s challenges and to seize the wide opportunities offered by a market like the United States.
As for the agriculture and fishing sectors, the United States is one of our biggest export markets, which is why these two activity sectors will benefit greatly from this new stage in the drive to open up our economy. I should also emphasize that once the free trade agreement is in force, our producers will have a much better picture of where future market outlets are opening up. Until now, their only access to the American market was through a one-way preferential treatment arrangement. But with the new agreements between our two States, both parties will have rights and obligations from here forward.

T.D.L.: Costa Rica has strengthened its ties with the United States, its leading trade partner, as part of a wider drive to build a competitive advantage for your nation. Could you tell us which public sectors are being opened up? Will the government’s major public works projects create new opportunities for foreign investors, and French companies in particular?

H.E.B.S.: Costa Rica has become a leading regional investment hub. Nearly 70% of these investments come from the United States. They are focused in industrial and financial sectors, along with real-estate and tourism industries, which are booming in the Guanacaste and Puntarenas regions.
The CAFTA-DR agreement has opened up new investment opportunities in this area as well, especially in the telecommunications and insurance sectors, which up until now have been state-owned monopolies. Our government has also launched an ambitious plan to build key port, road, air, and rail infrastructures that could be of great interest to French firms, as well as infrastructure projects for tourism and tourism-related industries.
I would also like to underscore the fact that most of the trade between the European Union and Central America comes from Costa Rica (which accounts for 60% of total trade). France is the 10th leading destination for Costa Rican exports to the European Union, but there is still wide potential for increasing our exports to the French market. This could be done by identifying new products in the service, medical and electronics sectors, in the automobile spare parts industry, in the maintenance and repair of aircraft and cargo ships, as well as in training centers for all these different sectors.

T.D.L.: Costa Rica has posted a solid 6% average growth rate over the past ten years, thanks to an influx of foreign investment. Does the Costa Rican market offer foreign investors any new advantages? Are you focusing on priority areas, in an effort to improve your country’s business climate?

H.E.B.S.: Our country has become one of the most successful economies in Central America. It had a per capita GDP of $5,627 in 2007, an extreme poverty rate held to 5%, an average life expectancy of 79 years, and a social welfare system that covers nearly 80% of the population. In fact, our socioeconomic model has drawn a great deal of immigrant workers to our country, including many from Nicaragua.
These achievements can be attributed, in large measure, to our country’s economic and political stability, along with infrastructures that support exporting and a highly skilled and innovative labor force. According to the rating on economic climate established by the Institute for Economic Research at the University of Munich (IFO) and the Getulio Vargas Foundation (FGV) in Brazil, Costa Rica has one of the top three business climates in Latin America.
Costa Rica has also greatly diversified its exports, primarily in high-tech industries and the service and food processing sectors. The government is promoting policies that are opening up the country’s economy. To this end, Costa Rica has signed free trade agreements with Central America, Chile, Mexico, Panama, the Dominican Republic, Canada, CARICOM (the Caribbean Community and Common Market), and now the United States (awaiting legislative approval). It is also looking to strike new free trade accords, most notably with China and other Asian partners.
Costa Rica is pushing forward with its efforts to simplify and computerize the better part of its administrative procedures, which are slowing down the creation of new companies and hindering trade. We are already starting to see concrete headway as concerns exports and the flow of foreign investment into our country.
Finally, our country continues to expand the major aid programs already underway to help foster production and exports, such as the creation of free zones, and is working hard to improve these programs. All of these measures testify to the Costa Rican government’s determination to make our country increasingly attractive for investments and exporting.

T.D.L.: During a state visit to the United States on 6 December 2006, President Arias discussed his “Costa Rica Consensus,” a relief plan that calls for Costa Rica’s debt to be forgiven. Could you explain this plan to our readers? Has there been any headway on this issue since President Arias’s U.S. visit?

H.E.B.S.: The “Costa Rica Consensus” was put forward by President Oscar Arias within the framework of the United Nations General Assembly held in New York on 20 September 2006. The plan calls for tying international cooperation and solidarity to the efforts countries are making to foster peace, social investments and sustainable development while reducing military budgets. This initiative seeks to reform our current international cooperation schemes, so that countries investing in an ethical manner – that is investing money to meet the most urgent social needs – are rewarded with closer cooperation, public development assistance, subsidized low-interest loans, and foreign debt cancellation or relief.
Average military expenditures around the globe currently stand at 3.4% of GDP, for a total of $US 1,100 billion annually, with wide variations from region to region and from country to country. These excessive military expenditures could and should be put to better use, most notably to meet the most urgent social needs. On a wider level, this money should be used for ethical purposes as proposed by the Costa Rica Consensus, which would mean using more of these funds for reducing poverty and meeting the Millennium Development Goals.
The Consensus calls for wealthy countries to set up mechanisms that funnel more money to developing countries that invest more in health, education and housing, and spend less on weapons and soldiers, to help make them debt free and financially secure.
The initiative put forward by President Oscar Arias has sparked great interest when it was presented at a variety of forums, including: the November 2006 Ibero-American Summit of Heads of State; the High-Level Dialogue convened in New York on 16 April 2007 between the UN Economic and Social Council (ECOSOC) and various international financial institutions; international financial organizations (such as the International Monetary Fund, the World Bank, the Inter-American Development Bank); multilateral organizations (the United Nations, the Organization of American States – OAS -, the Economic Commission for Latin America and the Caribbean – ECLAC, etc.); and the Secretariat of the Ibero-American Summit. Several other bodies have also shown great interest in this initiative.
On a more concrete level, this initiative has led to a number of positive developments, including the view taken by the United Nations Secretary-General (refer to document E/2007/10 dated 19 March 2007), who has called it an “innovative financing mechanism.” The Final Declaration issued by the November 2006 Ibero-American Summit of Heads of State also included a paragraph warmly welcoming the “Costa Rica Consensus.”
Working within the framework of our bilateral relations with the United States, on the basis of the “Costa Rica Consensus” and President Arias’s other innovative initiative, the “Peace with Nature” plan, we have convinced our American partners to forgive part of our debt ($US 26,075,942). In return, we have promised to invest in the environment, most notably in protecting our tropical virgin forests.

T.D.L.: In December 2006, at San Jose Summit of the Secretariat for Central American Integration (SICA), a negotiating mechanism was created in view of signing an Association Agreement between Central America and the European Union. Has there been any significant headway in the talks launched on 29 June 2007? As France readies to take over the EU presidency, is there anything it could be doing to help push forward these talks?

H.E.B.S.: Let me start by emphasizing that Costa Rica has worked hard, throughout its history, to maintain strong ties with its neighbors in Central America. It has been closely involved in regional issues, as a founding member of the Central American Common Market, for instance.
At the December 2006 San Jose Summit, the countries of Central America did indeed decide to set up a negotiating mechanism, which has proved to be very effective over the course of the first two rounds of negotiations with the European Union. This mechanism calls for appointing a “spokesperson country,” a role that will be held by each State in turn, every other cycle, in alphabetical order. Costa Rica was the first State to take on this role, for the negotiations currently underway.
The Association Agreement between Central America and the European Union has three main parts: political dialogue, cooperation and trade. The first round of negotiations was formally launched on October 22nd 2007, in San Jose. The second round was held in Brussels, from 25-29 February 2008. The talks are going very well. We hope to strike an agreement within a reasonable timeframe. Through these negotiations, Costa Rica hopes to obtain wider access to European markets as well as a promise from the European Union that it will support our region as it implements the future Association Agreement.
Given the historical, political, economic and cultural ties uniting our two regions, Europe is fully aware of the great importance this agreement holds for us. In the 1980s, Europe played a vital role in helping restore peace in our region. We are now counting on unwavering support from EU Member States, especially from the upcoming French presidency. We expect them to be closely involved in the ongoing negotiation process with the European Commission, so that we can announce the successful conclusion of the negations in the first quarter of 2009, as we all wish. We believe that France’s active involvement in this process is absolutely vital, in order to meet this objective.

T.D.L.: The EU has increased its aid package for the region to 840 million euros for the 2007-2013 period. In view of the program’s overall goals, are you hoping that this Association Agreement will help the region meet specific economic and political goals, as well as boosting cooperation?

H.E.B.S.: The region-wide cooperation program adopted by the EU for 2007-2013 is designed to meet both national and regional goals. It will focus on priority sectors that will be identified in agreement with each country, along with the SICA Secretariat General. There will be no changes to the program, which, as laid out by the European Commission in Brussels during the second round of negotiations for the Association Agreement, is designed to develop three main spheres of action: bolstering the institutional system with a view to closer Central American integration; strengthening regional economic integration; and heightening regional security.
That said, Central America is also trying to ensure that our cooperation with Europe strengthens the political and economic ties between our regions as well as bolstering our efforts to prepare for the implementation of the future Association Agreement.
Out of the global aid package for the region, Costa Rica will receive 34 million euros for the period 2007-2013. Our country plans to carry out projects that strive, first and foremost, to:
– heighten the capacity of small- and medium-sized enterprises so they can successfully integrate international, Central American and European markets;
– boost our production capacity by improving phytosanitary regulations and launching other health measures, in order to increase exports to European markets;
– bolster the manufacturing and export sectors, in order to overcome technical obstacles that are hindering trade, which has been a great challenge to those trying to break into the European market.
Our country is convinced that we need to cooperate in a more effective and more modern manner, if it is to attain the level of development it seeks. This cooperation must target, primarily: education, research, training, the sciences and technology. Costa Rica would like to open up innovative areas of cooperation with the European Union, and to launch dialogues and joint initiatives involving the sciences, technologies, climate change, the environment and institution building.
Expanding our trade opportunities with Europe will create new opportunities for our region, helping it achieve sustainable development and improve the quality of life of its peoples.

T.D.L.: Brussels hopes to spur even closer integration between the six countries in the region with the EU-Central America Association Agreement. Could you share your thoughts on that goal with our readers?

 

H.E.B.S.: In order to understand the context in which the negotiations between the two regions are unfolding, we need to make a distinction between the two different processes.
First of all, the Central American regional integration process has a dynamic all its own, which is a result of the strong political will of the countries in this region. This process must be distinguished from the negotiation process aimed at ensuring the successful implementation of the Association Agreement between the European Union and Central America. Each of these processes is following its own logic and fulfilling distinct political and technical needs.
Central America will consequently continue to define and to lay out its integration scheme, and will remain committed to ensuring that the Association Agreement with the EU fully meets the expectations of both regions.

T.D.L.: Opening diplomatic ties with China is another major step taken by President Arias, who made his first state visit to Beijing in December 2007. The Costa Rican president would like to boost state exports to China by 18% a year. Are there any specific areas wherein economic synergies between the two countries could be boosted?

H.E.B.S.: First of all, let me stress that our relations with China are founded on mutual respect and are focused around our common interests, with full recognition that there are differences between our two countries. China is Costa Rica’s second most important partner, after the United States, in terms of economic exchanges and trade.
We have launched extensive exchanges, in this spirit of mutual respect, including visits by entrepreneurs who are reinforcing the bedrock of our cooperation. President Arias’s October 2007 visit led to the signing of several key agreements, including a trade and economic framework agreement, along with political, cultural and education accords and agreements for technical and scientific research, among other things.
With its vast size, considerable demographic weight, and current level of industrialization and urbanization, China is a market with tremendous potential. With its 3,500 different export products, Costa Rica too has considerable assets, most notably in sectors such as food processing, tourism, high-tech industries, data processing, real-estate investments and environmental protection. Our country also offers an excellent port of entry for Chinese products in the Central American region.

T.D.L.: Bolstered by its close ties with Japan and South Korea, Costa Rica would like to join the APEC (Asia-Pacific Economic Cooperation) forum. How would being a member of this group benefit your country?

H.E.B.S.: Building strong ties between Costa Rica and emerging countries, which are expanding their influence, is of vital importance in order to sustain our country’s dynamism and economic growth.
In that light, the Pacific Basin is one of the most important regions for international trade. This region is also pushing forward to build an intercontinental regional integration process. There are now a total of 2,800 million people living in the countries in this group. Their economies produce 56% of the planet’s wealth and account for 46% of global trade.
APEC is an important forum for Costa Rica, in that it could help us strengthen our bonds and forge new ties with the countries in the Asia-Pacific region. Joining APEC would also help us create a suitable and flexible framework that would enable us not only to exchange information, but also to take common stands on important world issues, such as fair commercial exchanges and problems related to the environment and sustainable development.

T.D.L.: Your country was elected to serve as a non-permanent member of the United Nations Security Council in 2008-2009. Does Costa Rica plan to take a strong stance there on human rights and disarmament issues? How will it go about promoting the positions advocated by the “five small nations” group for reforming the United Nations, starting with limiting veto power within the Security Council?

H.E.B.S.: As soon as it became a member of the Security Council, our country proposed laying out an agenda that champions its key foreign policy values: peace building, disarmament, human rights, the prevailing of international law and international humanitarian law, and reforming the Council’s work methods.
As we see it, we have to do more than just demand the implementation of international agreements that have already been reached on disarmament and nonproliferation, since noncompliance in this area constitutes a threat. We must also do whatever it takes to ensure that these agreements are enforced in nations that already possess these kinds of weapons and should not be allowed to develop new nuclear technologies.
We are hence calling for full respect and implementation of the obligations laid down by the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) and the Comprehensive Test Ban Treaty (CTBT).
The international community, and the Security Council in particular, must address without further delay the issue of nuclear nonproliferation, and must do away with double standards in the application of the regulations required to achieve disarmament.
Costa Rica has held the presidency of the Security Council’s 1540 Committee since January 2008. This auxiliary UN organ was set up specifically to ensure the application of Resolution 1540, adopted on 28 April 2004. This resolution, adopted under Chapter VII of the United Nations Charter, lays out a series of stringent obligations for all Member States, such as the requirement, among others, to refrain from furnishing any kind of assistance to non-State actors that may try to develop, acquire, make, possess, transport, transfer, or use nuclear, chemical or biological weapons or their means of delivery.
Since joining the Security Council, we have supported and fostered the protection of human rights in conflict zones. We have also called for closer cooperation and coordination between the Council and other bodies, such as the International Criminal Court (ICC). Costa Rica has shown that it is deeply concerned by the legitimacy of governments, good governance principles, and the plight of peoples whom conflicts have turned into displaced peoples or refugees.
As you mentioned, Switzerland, Singapore, the Principality of Liechtenstein, Jordan and Costa Rica are in favor of limiting the veto power of the five permanent Council members. But let me also point out that the proposal calls for the Security Council to work in a more transparent manner and to explain the decisions it takes. The goal is not to limit the Security Council’s power, but to get the Council to work more closely with all of its members. We do indeed believe that we will continue to make progress in this arena, through the dialogue and pro-active efforts that we are making in order to reach a consensus on these issues.

T.D.L.: From 2005 to 2008, you served as President of the Assembly of States Parties, a legislative and administrative body to the International Criminal Court (ICC). Has this multilateral institution changed since it was first created, given that various countries have been hesitant to cooperate with it?

H.E.B.S.: There are currently 105 States Parties to the ICC. The Court has started to prosecute its first cases and has unequivocally become the leading model in the fight against impunity. All ICC bodies operate in full compliance with the Rome Statute. The countries which initially opposed the ICC have adopted a more flexible stand as concerns its credibility and legitimacy, in view of the considerable headway already made by the Court. Even the United Nations Security Council has established ties with the ICC, referring the prosecution of those responsible for the crimes against humanity in Darfur to the Court.

T.D.L.: Costa Rica, a land of great biodiversity, has declared “peace with nature.” How do you feel about the heated international debate on the deteriorating state of the environment and global warming? What steps would your country like to see us take, to solve these problems? Are there lessons to be learned from Costa Rica’s efforts to foster greater protection and improvement of the natural environment?

H.E.B.S.: Costa Rica covers just 0.03% of the earth’s surface, and yet it contains nearly 6% of the world’s biodiversity. Climate change is a very serious problem. It is a major threat to Costa Rica’s biological integrity and to all the other countries of the world. This is why our country has taken great care to safeguard its biodiversity (one-fourth of our national territory is protected). Costa Rica has also become a trailblazer in eco-tourism, which is anchored on protecting our natural environment as well as protecting and preserving our vast sea turtle nesting zone. In this same light, Costa Rica is currently the chair of the UNEP (United Nations Environment Program) Council, and has become a member of the Group of Friends of the United Nations Environment Organization (UNEO).
The “Peace With Nature” initiative includes both commitments concerning the situation inside the country (first and foremost, its desire to be the first economy wherein all CO2 emissions are offset at the national level), as well as commitments concerning the overall situation around the globe, which acknowledges the interdependence “of all Nations with Nature.” This way of looking at today’s environmental challenges requires us to take shared and yet differentiated responsibility, since while each nation has its own approach, they must all work together.
Costa Rica will continue to take the lead in this area, with the aim of convincing the world’s nations to make determined commitments that will bolster the commitments already made within the framework of international cooperation agreements and in multilateral forums. Indeed, the existing international agreements, such as the United Nations Framework Convention on Climate Change and the Kyoto Protocol, have clearly proved to be insufficient in certain areas.