Wednesday, March 08, 2006

Costa Rica's Arias insists on trade deal with US

Tony Saca, president of El Salvador announces that CAFTA goes officially into effect in San Salvador, El Salvador , Wednesday, March 1, 2006. Costa Rica has yet to ratify the treaty. (AP Photo/El Salvador's Presidential Office)By John McPhaul

SAN JOSE, Costa Rica (Reuters) - Costa Rica's president-elect vowed on Tuesday to get a free trade pact with the United States through Congress despite barely winning last month's election and failing to get a legislative majority.

Speaking shortly after he was formally declared the winner of the February 5 vote, Oscar Arias told opponents of the U.S.-Central American Free Trade Agreement, or CAFTA, he would not back down to promised street protests.

"You should not have the least doubt that in this, we will not cede," said Arias, who was Costa Rica's president in the late 1980s and won the Nobel Peace Prize for designing a peace plan that helped end civil wars elsewhere in Central America.

Arias, 65, had been expected to sweep back to power but instead he scraped out a narrow victory, hurt by popular opposition to CAFTA. Election authorities earlier on Tuesday declared Arias president-elect with 40.9 percent of the vote.

It was a formality after his main rival, former government minister Otton Solis, last week conceded defeat when the Elections' Supreme Tribunal rejected his complaints of vote irregularities.

Solis had promised to renegotiate the trade pact and won 39.8 percent of the vote, a much stronger showing than polls had predicted.

Costa Rica is the only country that has not yet ratified the agreement between the United States, Guatemala, Honduras, El Salvador, Nicaragua and the Dominican Republic.

Analysts say Arias, who takes office May 8, may struggle to pass CAFTA through the legislative assembly because his National Liberation Party is four seats short of a majority.

Much will depend on whether a simple majority or the support of two-thirds of congress will be needed for CAFTA's approval. The Supreme Court will decide that issue.

"If a simple majority is required, the government can easily obtain votes from smaller parties which have already said they favor CAFTA. If a two-thirds vote is required, it will be very difficult," said Rodolfo Cerdas, a political analyst.

Trade unions and civic groups have promised to stage strikes and street protests against CAFTA.

"We are going to follow the strategy of the referendum of the streets," said Albino Vargas, leader of the main public employees' union. "Obviously we have to impede its passage and (the protests) will come before that."

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