Sunday, October 07, 2007

Costa Rica votes on trade deal with US

By MARIANELA JIMENEZ

SAN JOSE, Costa Rica (AP) — Costa Ricans vote Sunday on whether to ratify a free-trade trade deal with the United States that has sharply divided the nation between those who say it would generate prosperity and critics who fear it would hurt farmers and local businesses.

Costa Rica is the only one of the six signatories to the U.S.-Central American Free Trade Agreement, known as CAFTA, that has yet to ratify it. The deal is in effect in the Dominican Republic, Guatemala, Honduras, Nicaragua and El Salvador.

With polls showing that Costa Ricans are poised to reject the pact, Costa Rica's president and U.S. officials have appealed for voters to back the deal.

On Saturday, the White House said if Costa Ricans vote against joining the agreement, the Bush administration will not renegotiate it.

The pact would "expand Costa Rica's access to the U.S. market, safeguard that access under international law, attract U.S. and other investment and link Costa Rica to some of the most dynamic economies of our hemisphere," White House press secretary Dana Perino said in a statement.

U.S. officials also suggested they may not extend trade preferences now afforded to Costa Rican products and set to expire next September.

Despite its conflicts over trade, Costa Rica fares better than other Central American countries: It has a thriving eco-tourism industry, maintains relatively high-paying jobs and is a magnet for Salvadoran and Nicaraguan migrants.

"The country, businesses and all of us need to continue forward, and I think the treaty will benefit us because we can compete," said 40-year-old Mauricio Rojas, who works at a textile factory in San Rafael de Poas that makes clothing for Tommy Hilfiger, Perry Ellis and Claiborne.

President Oscar Arias, a strong supporter of the pact, said a 'no' vote would affect Costa Rican industries and called it an "important tool for generating wealth in the country."

Arias, who won a Nobel Peace Prize for helping end Central America's civil wars in the 1980s, also said rejecting the pact would threaten trade benefits that help Costa Rica's textile and tuna industries.

Critics of the pact object to requirements that Costa Rica open its telecommunications, services and agricultural sectors to greater competition. They also fear it will mean a flood of cheap U.S. farm imports.

"It won't work for Costa Rica because to date things have been fine, we don't need change. The deal would only help the government, because the agricultural sector would be 100 percent affected because we can't compete," said strawberry farmer Luis Alfaro.

A poll published Thursday by the firm Unimer found that 55 percent of those questioned said they opposed the agreement, while 43 percent supported it, the newspaper La Nacion reported. The poll had a margin of error of 3.5 percentage points, and questioned 1,202 people between Sept. 27 and Oct. 2. Earlier polls have also predicted defeat.

Costa Ricans opposed to the deal held a large march in the capital last weekend.

A minimum of 40 percent of Costa Rica's 2.6 million voters must participate for Sunday's vote to be valid.

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