Wednesday, December 06, 2006

Costa Rican president sees CAFTA vote early next year

Incoming Senate Minority Leader Harry Reid of Nev., right, meets with Costa Rica's President Oscar Arias on Capitol Hill in Washington, Tuesday, Dec. 5, 2006.(AP Photo/Lawrence Jackson)WASHINGTON -(Dow Jones)- Costa Rican President Oscar Arias on Monday said he is hopeful his country's parliament will ratify a free trade agreement with the U.S. and five other nations early next year.

Trade and economic growth is the only way the small country of 4.5 million people will create jobs, Arias said.

The example of Chile, which has signed free trade agreements with the U.S., the European Union and many other countries, shows that trade is the most effective tool for cutting poverty, he said. Otherwise, the joke that Latin America will forever be the place of the future will always hold true, he added.

"Latin America will only make it to the future on time if it embraces globalization," Arias said in a speech to the Council of the Americas.

Costa Rica is the only signatory of the U.S.-Dominican Republic Central American Free Trade Agreement that hasn't ratified it. Legislative bodies in Nicaragua, Honduras, Guatemala, El Salvador, and the Dominican Republic have approved the agreement, though not all of those countries have fully implemented it. The U.S. Congress approved it in July 2005.

Arias, who was elected president this year, said that without trade, Costa Rica will lose people to better opportunities in other countries.

"If we cannot export more and more goods, we will end up exporting more and more people," he said.

Meanwhile, Arias said for Latin American countries to compete in a globalized economy, governments must spend more money on education and less on the military. He said there has been a rapid escalation in military spending over the past year to a total of $24 billion for the region as a whole.

"Latin America has begun a new arms race," he said.

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