Free trade charade costing Akron company jobs
Posted: 10/13/2011
AKRON, Ohio (Oct. 13, 2011) - While Congress fights itself and the administration over various jobs bills, Akron-based Datzap LLC is offering a solution to create jobs and stimulate the economy - enforce free trade agreements.
Datzap, a satellite internet service provider, has been stymied by the government of Costa Rica since early 2009 in efforts to obtain a license to operate in the Central American country. Meanwhile, Cost Rican telecom monopoly ICE has been upgrading its capabilities and aggressively signing Costa Rica's largest businesses to long-term contracts.
"The Costa Rican government is protecting its own and operating in direct violation of CAFTA (The United States-Dominican Republic-Central American Free Trade Agreement), and it's costing America jobs," said Mike Kister, Datzap vice president. "Meanwhile, Costa Rican businesses freely sell products in the U.S. because we honor our commitments.
"Datzap would have added many engineering and high-tech jobs in Akron if we could get a license to operate in Costa Rica," Kister said.
Datzap has jumped through every bureaucratic hoop and pursued every course of action possible according to Kister, even asking Senator Rob Portman (R-Ohio) - an outspoken proponent of free trade who was personally involved in the negotiation of CAFTA - and the Office of the United States Trade Representative (USTR) for help, but nobody is helping.
Steve Dimengo, an attorney with Buckingham, Doolittle & Burroughs, is representing Datzap and coordinating the licensing process with a law firm in Costa Rica. "We have encountered road blocks at every turn, and each time one is properly cleared, another is placed before us."
Kister asked the USTR to intercede, which is the recommended course of action. It could bring an international trade dispute to protect Datzap's interests, but it has declined to take up the case offering only to "make a phone call and send letters," said Kister. Datzap could initiate arbitration action against the Costa Rican government, but Kister estimates the legal costs would exceed $1 million - a cost his company can't afford.
The U.S. now has a $3.5 billion trade deficit with Costa Rica. Prior to CAFTA, there was a trade surplus favoring the U.S. With Congress passing new free trade agreements with Panama, Colombia and South Korea, and supporters claiming free trade will create American jobs, Kister said he felt that he had to speak out now about the inequities even if it further harms his chances of a obtaining a license.
"I hope our story raises a cautionary flag regarding free trade agreements and, especially, their enforcement. If they worked as they are supposed to, we'd be exporting satellite internet services to Costa Rica and adding jobs in Akron right now, but our government is unwilling to assert our rights.
"Datzap is a small business trying to enter a new market. All we are asking for are the protections granted to us by CAFTA. If both sides will not honor and America will not enforce free trade agreements, then we are better off maintaining current restrictions and barriers on imports and exports."
Datzap, Skycasters and VSAT Systems are sister companies providing satellite internet services for disaster response teams and businesses that operate in remote locations such as rural medical facilities and oil and gas companies. Datzap is the Central American brand while Skycasters and VSAT Systems are the end-user and wholesale brands respectively in the U.S. All are based in Akron.
Executive and chronological summaries of Datzap's experience are available at: www.ticosat.com/CAFTA/DatZap_(TicoSat)_Executive_Summary.pdf and www.ticosat.com/CAFTA/DatZap_(TicoSat)_Chronological_Transcript.pdf.
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Contacts: Mike Kister, Vice President, Datzap LLC 800-268-8653, ext 104 or MKister@vsat-systems.com
Steve Dimengo, Legal Counsel, Buckingham, Doolittle & Burroughs LLP 800-686-2825 or SDimengo@BDBLAW.com