Costa Rica’s participation in the Central American-Dominican Republic Free Trade Agreement (CAFTA-DR) was decided on this past weekend. With almost all of the nation’s voting precincts reporting the results, 51.5 percent of the population voted in favor of ratifying CAFTA. The majority ruling on the national referendum comes in the wake of contentious debate in Costa Rica and abroad over CAFTA’s purported benefits.

Opponents of the agreement have announced they will not recognize the official results until a mandatory ballot-by-ballot recount is concluded. The recount, which begins today, must be completed within two weeks.

Costa Rica is the last nation to ratify the free trade agreement. After being ratified by the US Congress in 2005, El Salvador, Guatemala, Honduras and Nicaragua joined in 2006, and the Dominican Republic joined in early 2007.

CAFTA-DR’s package of 13 laws include bills that will open Central American markets to foreign competition, such as opening Costa Rica’s state telecommunications and insurance monopolies, and domestic service and agricultural sectors. CAFTA-DR opponents fear that this market liberalization will lead to a flood of cheap US imports, potentially putting rural farmers out of work. As part of the agreement, the United States has promised increased market access for some sectors in Central America, including textiles.

“The United States welcomes the outcome of the Costa Rican referendum on the free trade agreement that Costa Rica signed with the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua and the United States,” said United States Trade Representative Susan C. Schwab.

“We believe, and history confirms, that countries that open their markets have greater success in generating economic growth and development. We are pleased that Costa Rica will be joining the other CAFTA-DR countries in reaping the benefits of greater regional economic integration and market opportunities that the CAFTA-DR provides. We look forward to working with the Government of Costa Rica as it completes the necessary steps to implement the agreement, so that the CAFTA-DR can enter into force for Costa Rica as soon as possible.”

October 9, 2007