But responding to one of the biggest objections Democrats raised to DR-CAFTA, U.S. Trade Representative Susan Schwab negotiated a deal with House Ways and Means Committee Chairman Charles Rangel, a New York Democrat, to strengthen labor and environmental provisions of the three Latin American free trade agreements and future bilateral trade pacts.

There was a pretty bitter fight over DR-CAFTA, especially among Dems, and it was passed with a narrow margin that included several Democrats. The IP and IT aspects of these agreements don’t seem to make the press as much as some of the other issues, but are definitely an important part to these agreements.

It is important to point out that the US has already signed on to DR-CAFTA, as well as other Latin American FTAs (and in other regions). A Democrat in the White House in 2008 wouldn’t undo DR-CAFTA, but could put a halt on other, future, agreements.

Many Costa Ricans Still Favour CAFTA – Poll data saying that most Costa Rican would vote in favour of DR-CAFTA, though the number is still 45 percent with 23 percent undecided (which is up from 18 percent).

Catholic church worried DR-CAFTA will split the country – church leaders are calling for tolerance for those on both sides of what is a divisive issue for the country.

Costa Ricans worried about water privatisation – Via Prensa Latina, Costa Rican are worried about water becoming more of a commodity.

Costa Rica’s opposition leader wants renegotiation – Opposition leader Solis wants to renegotiate DR-CAFTA (at least Costa Rica’s part) in order to add Labour and Environmental standards.

Telecommunications, as noted in our report, is one of the central issues of DR-CAFTA. Costa Rica’s telecoms infrastructure is one of great pride for Costa Rica, and the idea of having it privatised brings up strong feelings.

Costa Rica’s citizens will be voting directly on whether or not to approve DR-CAFTA.

Source: La Nación.

The President doesn’t have to present these deals under the TPA, but that authority does set a ‘fast track’ procedure which can be an advantage to getting them approved. As was noted in a recent AP piece by a leading Democract and a leading Republican on the Panama US FTA:

“We will continue to pursue agreement on these issues in the coming days because re-establishing a bipartisan foundation on trade policy is more critical than meeting a procedural deadline,” the two men said in their statement. [Link]

The USTR spent the time leading up to the April 2nd deadline completing negotiations with South Korea. Ben Muse has an excellent collection of resources that he is constantly updating on the KORUS FTA, which is located here.

In another statement, House Dems stated that they would use the 90 days prior to the TPA’s expiration to:

… use the 90-day notification period for discussions with the administration over “incorporating necessary changes on outstanding issues such as labor, environment and intellectual property that must be addressed before the bills will receive broad bipartisan support in Congress.”

So IP will be on the table when the Democrats try to work out an agreement for further extensions of the authority. While this wouldn’t effect the DR CAFTA agreement, the US is in negotiations with several other Central and South American countries and therefore we could see a different approach to IP in future agreements in the region. IP, as mentioned elsewhere on this blog, is an important component when looking at the impact of FTAs on IT based businesses. Areas include secondary liability for ISPs in the area of copyright infringement, ISP liability rules patterned on the DMCA,  and anti-circumvention provisions that software and hardware makers must comply with (these are also patterned on the DMCA).

The claim concerns RDC’s ownership of a 50 year lease on aspects of Guatemala’s railway infrastructure that they won by bid in 1997. The lease is over Ferrovias Guatemala (RDC’s now subsidiary), which includes nearly 500 miles of track, port facilities and rights of way (which can be exploited for other infrastructure). This must encompass nearly all of the rail in the country, because the CIA World Factbook lists 886kms, with the RDC site reporting the lease at 800 kms. Last August, the Guatemalan government issued a Presidential Decree declaring that the privitsation of ‘rolling stock’ (non-locomotive railcars) was against government interests.

RDC alleges that the decree has indicated to banks, customers and others that there is a general hostility to Ferrovias and so they have been reluctant to use its services — thus meaning less credit and less business. From RDC’s perspective, the acts of the Guatemalan government indicate an attempt to take back over the national rail infrastructure after having abandoned it in the 1990′s (and being rescued by RDC’s efforts under the lease over the past 10 years). A ‘case study’ of the restoration is available on the RDC site.

With the privitisation of the telecoms industry being so central to the agreement and our focus for this project, this will definitely be a case to watch. The deregulation of the telecoms market, especially in states such as Costa Rica, will mean greater investment by foreign corporations. Provisions such as this one, providing for arbitration of disputes, are a kind of double-edged sword — they aim at encouraging foreign direct investment by giving assurances of fairness, but can also be seen as giving foreign corporations too much power.  This sort of Jeckll and Hyde view of FTAs of course generally underlies most discussions of free trade and neo-liberal economics. The goal is to see past these broader depictions to the actual affects of the policies.

In light of the moves towards nationalization taken by Chavez in Venezuela, and his continual promotion of ALBA, this suit might provide a powerful signal to other Central American countries when tackling the deregulation issue.

MANAGUA, Nicaragua: President Daniel Ortega has asked the United States and the European Union to set up “compensation funds” to offset the effects of free trade and globalization on poorer nations like Nicaragua.

Ortega said Wednesday that he had broached the idea with representatives of the EU – with which Nicaraguan is discussing a possible trade deal – and the United States, which along with Nicaragua is part of the Central American Free Trade Agreement.

“We have explained to the Europeans that if there is no compensation fund, the association (agreement) would have no future,” Ortega told a meeting of businesspeople.

Could this be an influence of Nicaragua’s recent accession into ALBA – the Bolivarian Alternative for the Americas – that Chavez and Morales started?

In the rest of the article, Ortega argues for a development plan similar to that used by the EU for new member states in order to get their infrastructure up to par with the rest of the Union.

Panama, along with Columbia and Peru, are seeking to preserve market access to the United States that had been given to them under the Andean Trade Promotion and Drug Eradication Act (ATPDEA) (Columbia and Peru) and the Caribbean Basin Initiative (Panama) — both of which are set to expire.

Colombian, Panamanian and Peruvian exporters therefore see the FTAs as helping to guarantee permanent access to the U.S. market. The FTAs also help Latin America diversify their export offerings and reduce their dependency on only one or a few commodity items that fluctuate in prices from year to year, Bastian says. Case in point: Venezuela, which has a booming trade with the United States, but no FTA nor plans to negotiate one. Only one product category – oil and gas – accounted for 77 percent of all Venezuelan exports to the United States and with oil prices falling, trade may decline this and next year.

The Panama-US FTA contains provisions for higher IP standards, similar to CAFTA. More details on the USTR site. The full story is available at the Latin Business Chronicle.

I attended a lecture/talk at a meeting of the Legal Theory Reading Group here at the University of Edinburgh last night by Professor Zenon Bankowski about a new paper he is working on. I’m certainly no legal theory expert, but this is what I gathered was the core of his idea:

• The act of giving necessarily means that you will change because of that gift — this is related to the idea that you expect/get something in return whenever you give, even if it is just a warm fuzzy feeling.
• People naturally fear change.
• The fear of change is reduced by giving only to people who are like you (or act within your expectations).
• Law structures how we give and reduces the risk with giving.
• The entire process, and especially the idea of law as an institution governing our relationships, is in a process of feedback with our individual acts.

Now I don’t want to get into to much of the theory, but I was thinking about this as illuminating to the psychology of FTAs — specifically about the idea of only transacting business (giving) with those whom you understand (i.e. are like you). This seems to me to have some relationship with Foreign Direct Investment (FDI), which is the key goal for many developing countries when they decide to sign an FTA.

A Free Trade Agreement is a means to structure the law, and perhaps thus a society, to a model familiar to businesses that would like to compete in that market. Businesses, if we can speak of them as having a personality, would be risk-adverse to experiencing new ways of doing business. They ‘want’ to do business in ways known to them in order to limit their risks.

In addition, from an economics standpoint we should also discuss transaction costs — there will be a fixed set of costs to expand business into a new foreign market. The closer that market resembles a familiar model, the less expanding into that market might cost.

Do and Watson, in Economic Analysis and Regional Trade Agreements, ask the question:

Would transaction costs in an RTA-riddled world be that much higher than in a world in which each nation-state established its own tariffs and ran a full set of non-tariff barriers?

Their ‘optimistic reverie’ is that if the world was divided up ‘into 10 or 15 RTAs within each of which WTO rules held sway’ that this would facillitate trade and would alleviate some of the institutional difficulties of the WTO. Note that Regional Trade Agreements is used as a term to describe both FTAs and Customs Unions.
Now, I don’t want to ramble on too long, but it is worth thinking about how these agreements export a set of values and way of doing business. This is a topic that often arises in the IP context when discussing Traditional Knowledge (and how to protect it, especialy ‘bio-prospecting’) and Access to Medicines issues surrounding patent law.

In the IT field, the DR-CAFTA agreement exports features of the US Digital Millenium Copyright Act (ISP liability and anti-circumvention measures) to the other signatories. This locks these countries in to a certain way of interpreting the WIPO Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT).

Though this project focuses more on how things are ‘on the ground’, the intellectual exercise of stepping back and looking at the big picture has many benefits.