More Free Trade Agreements? Datzap’s Bitter Lessons from CAFTA
AKRON, Ohio, Oct. 10, 2011 /PRNewswire/ — Datzap, LLC is an Ohio based satellite telecommunications company that has been attempting to get a license to sell its services in Costa Rica. This license should have been granted routinely under the terms of CAFTA.
We can all agree free trade agreements (FTAs) have the potential for providing enormous economic benefits when all participating nations honor their commitments from inception. However, when the environment is such that only the U.S. follows the agreement while its trade partners ignore their commitments, U.S. business remains handcuffed while the U.S. trade deficit grows exponentially. This is because other nations can violate the FTA by restricting trade in their own country, but still reap the benefits through free trade with the U.S. The U.S. currently has several FTAs, including CAFTA, that have such an effect due to the lack of (1) any practical enforcement mechanisms, or (2) incentive for other nations to comply therewith. This communication conveys the experience of an Ohio-based business (Datzap, LLC) which has attempted for three years to realize the benefits supposedly “protected” and “guaranteed” by CAFTA by expanding its business into Costa Rica, but has been unable to obtain a license to provide satellite Internet service that should have been granted routinely in early 2009. Due solely to Costa Rica’s refusal to comply with its CAFTA commitments, Datzap continues to be unfairly excluded from Costa Rica’s telecommunications market, resulting in the loss of an estimated 25 Ohio jobs that Datzap would have added.
The Executive Summary and Chronological Transcript (links below) outlines how Costa Rica’s refusal to comply with CAFTA has damaged U.S. business, including Datzap’s horrific experience of being continually denied CAFTA’s proclaimed protections and guarantees. CAFTA’s purpose was to increase free trade, while removing significant trade barriers, amongst participating countries. In just two years, CAFTA has caused a prior trade surplus of $1.7 billion with Costa Rica in 2008, the year prior to CAFTA becoming effective in Costa Rica, to explode in the other direction grossly out of proportion into a significant trade deficit — $3.5 billion in 2010 — in favor of the country that has refused to comply with its commitments. Obviously, the only jobs created by CAFTA have been in Costa Rica at the expense of U.S. jobs. This is worth repeating — under FTAs, participating countries realize the greatest benefit by simply refusing to comply to the detriment of those countries that do honor their commitments.
These documents highlight the U.S.’s need to stop considering additional FTAs until we can realize the benefits of and enforce the FTAs currently in place. The enforcement mechanisms under current FTAs are embarrassingly shameful, resulting in little incentive for other nations to comply with their commitments. We have had numerous conversations with the United States Trade Representative (USTR) regarding Costa Rica’s failure to comply with CAFTA, but the USTR is either unwilling or unable to take any meaningful action to force compliance. Instead, the USTR’s efforts have been limited to diplomatic communication and encouragement. Regardless, the lack of any practical enforcement mechanisms or incentive to timely comply therewith not only renders these FTAs worthless, but actually damaging to the U.S. economy.
With an upcoming vote on FTAs with South Korea, Panama and Columbia, we respectfully request that you study the enclosed materials and consider Datzap’s situation when considering these FTAs. The same problems must be avoided in future FTAs. America is better off maintaining existing restrictions and barriers on imports and exports, rather than entering into more FTAs the U.S. will honor but cannot (or will not) enforce.
Executive Summary of DatZap’s experience:
Chronological Transcript of DatZap’s experience:
Datzap, LLC is an Ohio-based satellite telecommunications company providing services in Central America and the Caribbean. For more information, please visit our web site at www.ticosat.com.
SOURCE Datzap, LLC