Has the U.S. threatened Costa Rican sugar if IP law is not approved?

All your cane are belong to us

As far as incendiary headlines go, this one in BoingBong is near the top when it comes to flammability:  US to Costa Rica: you want sugar markets? We want maximal copyright.  It has everything, a large and powerful country threatens a small unarmed trading partner with retaliatory sanctions if they do not pass IP legislation which enhances protection.  The story plays right into a very powerful narrative of large American trade power used to bully smaller countries into submission.  While I agree that this narrative is often accurate, I am afraid that in this particular case it is not so.

I have just come back from Costa Rica, so I was very curious about this headline, particularly because I saw it replicated all over the Twittersphere (such is the power of BoingBong).  The source of the story can be found in Michel Geist’s always excellent and informative blog.  Michael’s headline was not as incendiary as BoingBoing’s, but it was similarly strong: U.S. To Costa Rica: No Sugar Access Without Copyright Reform.  The article’s content is understandably more measured, and in it Michael Geist merely states that the U.S is delaying market access to sugar from Costa Rica until new IP legislation is passed.  The source for this report is an article in the Tico Times, the Costa Rican English-language newspaper, which reads:

“[…] until the final piece [of IP reform] is approved, the United States is delaying market access to sugar. Costa Rican sugar producers will not be able to sell their product in the U.S. unless legislators approve the last part, known as the 14th amendment.”

Some background information is now needed to explain this paragraph, and the story in general.  Costa Rica is party to the bilateral agreement between the U.S. and Central America known as DR-CAFTA.  As many other TRIPS-plus agreements, this one contains several IP-related provisions that enhance protection beyond what is required by international agreements, and is more like maximalist protection such as that contained in the American DMCA (click here for some background on the agreement and some of its provisions).  DR-CAFTA was ratified by all other signatory parties, with the exception of Costa Rica, where a strong opposition movement had emerged.  This coalition included various disparate groups, including farmers, students, left-leaning political parties, academics, and trade unions.  The opposition managed to get the government to agree to a referendum, and the country was evenly split between the YES and NO camps.  Eventually, the YES narrowly won the referendum 51.62% in favour and 48.38% against.

The Costa Rican parliament has since approved most of the legislation required by the agreement, with exception of three reforms to existing IP legislation: Ley de Información no Divulgada (protection to non-disclosed information),  Ley de Derechos de Autor (copyright law), and Ley de Procedimientos de Observancia de los Derechos de Propiedad Intelectual (enforcement of IP).  It is unlikely that the reforms will be approved soon as Costa Rica is in the middle of an election process.  The main question is, has the U.S. threatened Costa Rica?  Where are all the stories coming from?

I was able to track down some more information about this other than the poorly-reference Tico Times article.  La Nación reported that the problem was first highlighted by sugar cane exporters in Costa Rica earlier this week.  The exporters complained that they have 11.880 metric tonnes of sugar in storage, which has already been sold to American importers, but that cannot be sent because of CAFTA restrictions.  The American embassy is quoted in that same article as stating that this has nothing to do with CAFTA, and that it is simply a matter of the country having reached its allocated sugar export quotas. This seems like an accurate appraisal of the situations, as I was unable to find a single reference outside of the Tico Times stating that the United States had threatened Costa Rica at all.   In fact, raw cane sugar quotas for 2010 were announced by the U.S. Trade Representative back in September 2009, and are “based on the countries’ historical shipments to the United States”.

Even the failure to pass the IP reform has a more mundane explanation than that of the plucky little brave country fighting large IP interests in the most powerful nation in the world.  The main reason for the delay is merely political, as I mentioned Costa Rica is in the middle of its presidential campaign, so it is unlikely that the parliament will convene any time before the February 7 elections.  The second reason for the delay is merely a local one. Costa Rican radio stations do not pay royalties for any music they play. As the copyright reform is about to enhance IP protection, the powerful radio lobby has been very vocal in its opposition to the law (see my own take on the dispute here).  The dispute is not between disenfranchised media outlets, it is between two powerful media lobbies.

The reality is that CAFTA has been approved in a referendum, and therefore should be made into law.  I have to declare that I am reluctantly in favour of CAFTA despite its IP provisions because the situation is such that Costa Rica cannot afford to compete against its neighbours in a disadvantageous position, where other countries get better access to its largest trading partner, while we do not.  I do not like the fact that the U.S. has created a situation where it forces legislation on its trading partners, but until there is a more diverse global market out there, I cannot see how Costa Rica can manage without bilateral agreements such as CAFTA, odious as they may be.  Furthermore,  I have read the three suggested reforms, and I did not find anything that would lead me to believe that we are faced with a strong copyright crack-down.  In fact, there is little there that would lead me to believe that Costa Rica is faced with anything other than a normalisation of its copyright law, where everyone who profits from IP should pay, such as radio stations.

There is much scope to criticise the United States when it comes to international trade. ACTA is upon us, and I believe that it offers a much more real threat than some of the bilateral agreements already in force. The struggle against ACTA and similar three-strikes legislation must be done from an informed position.  We must resist the temptation of sensationalist-yet-inaccurate headlines to make our point.  Otherwise, we will come across as mindless zealots opposed to copyright just because we do not want our file-sharing privileges taken away.