When Costa Rican officials return from their Christmas holiday, they will have to face the question of Taiwan.

The future of diplomatic relations with that country has been jeopardized by disclosures of massive payoffs by the Chinese to political campaigns and even to foreign ministry employees.

Taiwan and the mainland Beijing-based Communist Chinese are rivals. Only 26 countries, including Costa Rica, recognize Taiwan as a legal government. 

The issue has become more obvious as Taiwan appears to be losing strength in the Caribbean. In March the Commonwealth of Dominica cut ties with Taiwan in favor of the mainland Chinese.

Thursday, Taiwan recalled its ambassador to Grenada to protest that country’s plan to shift its recognition to Beijing.

China regards Taiwan as a breakaway province. The Beijing government also engages in dollar diplomacy. Dominica received a substantial aid package from the mainland Chinese after dumping Taiwan.

Some legislators have called for a break in diplomatic relations in response to allegations that substantial sums from the Chinese were used to finance Abel Pacheco’s presidential campaign.

Many employees of the Ministerio de Relaciones Exteriores y Culto received premium pay that has been traced to Taiwanese grants. 

Taiwan also has made substantial investments in Costa Rica. The Puente de Amistad over the Río Tempisque that shortens the land route to the Nicoya Peninsula was a gift from Taiwan. The country also is providing technical and architectural services for the proposed convention center west of San José and for a new highway in the northern zone.

Venezuela plans pipe
for oil through Panama 

CARACAS, Venezuela — Officials say they will open talks with Panama next week on a proposal to pump oil through a pipeline there for shipment on to China.

Venezuelan Foreign Minister Ali Rodríguez said Wednesday that he will travel to Panama Sunday to discuss the project. Rodríguez also said Venezuela's goal is to diversify energy exports, not decrease oil exports to the United States.

His comments come days after Venezuelan President Hugo Chavez met with Chinese leaders in Beijing and signed agreements dealing with such issues as economic cooperation and joint oil field exploration.

Venezuela is the world's fifth-largest oil exporter. China, which faces a significant energy shortfall, is looking to strengthen energy cooperation with oil-exporting countries.

Prisoner swap deadline
is today in Colombia

BOGOTA, Colombia — The government says a top Marxist rebel leader will be extradited to the United States to face drug trafficking charges unless rebels free dozens of hostages by today.

Interior Minister Sabas Pretelt issued the warning Wednesday, saying the government will keep its word regarding Ricardo Palmera, a leader of the Revolutionary Armed Forces of Colombia, or FARC. 

Earlier this month, officials said Palmera, also known as Simon Trinidad, could avoid extradition if the FARC meets a Dec. 30 deadline to release 63 hostages.  The FARC has not responded to the ultimatum.

The FARC has demanded the release of hundreds of their jailed comrades in exchange for the hostages.  The hostages include politicians, military and police officers, a former presidential candidate, three U.S. citizens and a German citizen.

Cycle race finishes here

Cyclist Israel Ochoa won the multi-stage race Vuelta de Costa Rica Wednesday and crossed the finish line at Plaza Víquez in San José. The race was over the Cerro de la Muerte on the Interamerican highway to San José.
 

A.M. Costa Rica Consultantes Río Colorado S.A. James J. Brodell........................editor Saray Ramírez Vindas...associate editor Avenida 11 bis, Barrio Otoya, San José  Voice: (506) 223-1327 FAX: (506) 223-1190  In Costa Rica:                            From elsewhere:      A.M. Costa Rica                           Consultantes Río Colo.      Apartado 12909-1000                  SB 11      San José, Costa Rica                     P.O. Box 025292      (506) 223-1327                          Miami, FL 33102-5292

As the sun breaks out over Costa Rica, many readers to the east already have seen the day’s A.M. Costa Rica.

Among them is loyal reader Vlasta Zara of Zagreb, Croatia, who says: "To A.M. Costa Rica team and my dear Ticos friends, All the best wishes for Christmas and New Year 2005."

Each year Ms. Zara includes a photo of her city’s main square as a Christmas card to all the other readers.
 

World Trade Organization countries are bracing for dramatic shifts in trade of textiles and apparel as industries across the globe try to adjust to a more open trade regime after the current quota system expires Friday.

Large textiles/apparel importing countries and smaller exporting nations are concerned that exports from China and India will surge once the quotas are removed, with devastating impact on millions of jobs in producing nations with less potent and competitive textiles/apparel industries.

The Multifiber Agreement reached in 1974 as part of the General Agreement on Tariffs and Trade and its successor, the Agreement on Textiles and Clothing, scheduled to expire by the end of 2004, have governed trade in textiles and clothing through a system of import quotas set on a country-by-country basis.

The U.S. International Trade Commission said in a February report that China is poised to become a dominant player in the U.S. textile and apparel market under the new regime because Chinese producers have the ability to make almost any type of textile and apparel product at any quality level at a competitive price. A 2004 study said that China's share of global trade in textiles and clothing could more than double from 25 percent in 2002 to 50 percent after quotas are lifted.

Textile manufacture is a major industry in Costa Rica and Latin America.

Many developing countries, such as Bangladesh, Egypt, Madagascar, Sri Lanka and Uganda, worry that their products will be crowded out from large developed markets by rising Chinese and Indian imports.

A group of 10 developing nations led by Mauritius asked the World Trade Organization to assess the impact of the quota phase-out on individual countries. The group also asked for advice on how to manage the transition to the more open trade regime.

But informal consultations among trade organization 

In a related development, producers from 51 developing countries have backed a petition filed in October by the U.S. textiles industry to limit U.S. imports of Chinese textiles and apparel in nine categories including socks, cotton and synthetic trousers, wool trousers, cotton and synthetic knit shirts, and underwear.

The Bush administration, citing market disruption concerns, decided Oct. 22 to impose quotas for up to one year on sock imports from China, and by Dec. 6 it had accepted for consideration requests in all nine categories.

In the 1980s, similar U.S. safeguard actions against imports of machine tools and automobiles from Japan led to voluntary export restraints by Japanese producers.

U.S. clothing retailers and importers, who have welcomed the quota-free system, argue that the administration has approved the requests for safeguards based on the mere threat of market disruption due to expected import surges, rather than on evidence of actual market disruption as required by law. 

Consequently, they filed suit Dec. 2 to bar the Bush administration from imposing new quotas. Some retailers said that the threat of such an action has already disrupted their plans to import goods from China in 2005 and that the action itself would restrict expected benefits for consumers.

China indirectly acknowledged that the transition to the new trade regime might be bumpy when it announced Dec. 12 that it will begin Jan. 1 taxing its textiles and clothing exports to "ensure a smooth transition for textile integration following the end of the quota system."