Extraordinary situations require extraordinary measures. When we designed and implemented Costa Rica’s economic policy, based on a model of commercial openness, it did not foresee the unprecedented and unthinkable situation we are living today with the global COVID-19 pandemic.
The health crisis, economic downturn, lack of employment, and even a potential shortage of products deserve a pause at this moment to think about creative ways to generate tailored solutions for our country.
Although I am a fervent believer in the model of commercial openness—I negotiated DR-CAFTA, the Association Agreement with Europe, and several other treaties—I believe that, at this time and on a temporary basis, a policy of import substitution with national production should be applied in the trade of goods. This would contain job losses and ensure that there are enough products in the country.
The strategy must be very focused on addressing the economic crisis and job losses, as well as on ensuring the supply of goods in the country. These situations, if not properly addressed, could create a national emergency due to internal security issues and a lack of certain products. The selection of sectors must be very careful and must address products that the country actually has the capacity to produce and sell at this time, and in which it will be possible to generate, or at least maintain, jobs.
In all sectors where it would not be possible to generate new jobs or where there is no danger of losing existing ones, the commercial openness system must remain intact, since applying such measures could instead have an additional negative impact on the citizenry. Similarly, health or personal hygiene products, among others, should remain unchanged given the sanitary needs.
From a legal perspective, these types of exceptions could be applied through Articles XX (General Exceptions) and XXI (Security Exceptions) of the GATT, which is the World Trade Organization agreement that primarily regulates the trade of goods. Free trade agreements contain similar exceptions.
Article XX on General Exceptions allows a party to apply, among other things, measures necessary to protect human health and life, provided that it complies with the requirements indicated therein.
For its part, Article XXI on Security Exceptions allows a party to apply, among other things, measures it considers necessary to protect its essential security interests in cases of international tension, provided that the requirements indicated in said article are met.
The government should consider this temporary strategy to address the situation. If applied, it must be done in close coordination with the national productive sector and with the sole purpose of addressing the unprecedented situation we are living in the best possible way and helping the majority of Costa Ricans.