CAFTA’s promises of more employment in Costa Rica did not materialise, research finds

By Fabiola Pomareda García,

7 October 2022, Semanario Universidad 

We are grateful to Fabiola and to Semanario Universidad, a weekly Costa Rican newspaper, for permission to reproduce her article in The Violence of Development (TVOD) website. We are also grateful to Pamela Machado, a Brazilian journalist, for doing the translation and summary of Fabiola’s article specifically for the TVOD website. What follows is more of a summary than a direct translation. 

Promises of increased employment opportunities in Costa Rica made at the signing of the free trade agreement with the United States, known as CAFTA, have not materialised, research from Andrej Badilla Solano from the Centre for Research in Culture and Development (CICDE) of the Universidad Estatal a Distancia (UNED), has found.

At the time of the signing of CAFTA, the second administration of Óscar Arias Sánchez had said that the CAFTA would generate 500,000 jobs.

According to Badilla, “there have been no changes in employment data in the entire period after the implementation of the agreement,” which came into effect in 2009. The reason for this, Badilla said, is that the strategy pursued by the government was the creation of Free Zones “which are under an ‘exception’ regime and their contributions are limited to the payment of social charges under very advantageous conditions,” he said.

As of 2018, the number of jobs generated by the Free Zones represented only 5.3% of the total workforce in Costa Rica, representing approximately 116,000 jobs – lower than the half a million positions promised by former president Oscar Arias Sánchez. “The indicators show a marked deterioration in the labour market during this decade. We are still waiting for the 500,000 jobs that Arias Sánchez promised us,” Badilla said.

In addition to the unfulfilled promises of employment, medicines have become more expensive in Costa Rica as a result of an intellectual property clause included in CAFTA, Badilla said. The agreement established more favourable conditions for patent holders. This, in turn, has made medical drugs more expensive and has strained the budget of the country’s social security fund, said Badilla, citing a study by Martínez Piva and Tripo (2019) which shows that 35% of the budget allocated to the purchase of medicines from the Fund corresponds to medicines with patent protection.

“Since there is a list of official medicines and some have this intellectual property protection, the Fund has no choice but to pay for them, it has no choice but to pay the price determined by the producers. But we could pay less and allocate less of the budget if these drugs were generic”, Badilla highlighted.

Moreover, the researchers said that the agreement had increased the availability of junk food and harmed people’s diet. According to Badilla, in all Central American countries the prevalence of obesity in adults ranged between 12% and 15% before CAFTA was signed. But after the approval of the treaty the prevalence of obesity increased by 10%.In Costa Rica the prevalence of obesity among adults was 14.8% in the year 2000; while in 2016 it was 25.7%.


Andrej Badilla, Researcher at the Centre for Research into Culture and Development of the State Distance Learning University (UNED)