MercoPress. South Atlantic News Agency

Nicaraguan Congress approves free trade agreement

Nicaragua' National Assembly ratified Monday the free trade agreement between Central America, United States and the Dominican Republic, identified as CAFTA-RD.

The bill was passed with 49 favourable votes from the Liberal-Constitutionalist Party and independents, and 37 against from the Sandinista Liberation Front.

The National Assembly has 91 members and 88 showed up for the crucial vote. The treaty becomes effective once President Enrique Bolaños orders its publication in the gazette.

"The approval of the CAFTA-RD opens hopes for the demand of jobs, production, health and education services for Nicaraguans", said Carlos Noguera president of the Congressional committee which recommended the approval of the bill.

Opposition Deputy Edwin Castro anticipated that the Sandinista Liberation Front would vote against the treaty arguing that compensatory legislation was needed to protect farmers and small and medium industries.

"It's the first document in twenty years that gives Nicaragua a chance of economic reactivation and we must take advantage of it", said Industry and Promotion Minister Azucena Castillo who was present during the Congressional debate.

"This is a great challenge for all of us, Assembly members, the administration, private sector and all Nicaraguans. We must make CAFTA-RD function", underlined Ms. Castillo, who added that foreign investors that were on the verge of abandoning the country because of the uncertainty abut the treaty, "have now decided to remain".

Sandinista leader and presidential candidate Daniel Ortega had anticipated his party would not vote for the treaty but wouldn't block the approval.

The passing of the free trade treaty comes as a relief to President Bolaños who was facing fierce Congressional resistance to his administration and driving Nicaragua to an ever deepening political crisis.

President Bolaños claimed he was exposed to a "slow motion" coup by an opposition dominated Congress.

The power struggle threatened the Bolaños administration and United States aid to the country, but apparently the president and Sandinista leader Daniel Ortega arrived to an understanding to cool the situation.

Basically they agreed to delay constitutional reforms which weaken presidential powers until next year when Mr. Bolaños ends his mandate.

Both United States and the Organization of American States had repeatedly warned that Nicaragua's stability and governance were under threat. In a recent visit US Deputy Secretary of State Robert Zoellick said Washington would cut off aid if the opposition continues to work against the freely elected Bolaños administration.

A group of European countries who financially support the Nicaraguan budget also threatened with ceasing aid if democracy was imperilled.