MercoPress. South Atlantic News Agency

Crucial referendum on Sunday for Costa Rica and C. America

On Sunday Costa Rica votes on a crucial free trade agreement with the United States which has the country's electorate split almost equal, according to the latest public opinion polls. The situation could be of concern for the future of Central America's most stable democracy.

The heated debate in the media has taken to the streets with demonstrations and protestors aligned behind a giant "No to Cafta", the Central American Free Trade Agreement, which gives Central American countries a special status in economic relations with the US. About 100,000 Costa Ricans turned out last Sunday to protest the pact, a huge number in a country of 4 million. The Sunday referendum is binding and if Costa Rica votes to join it will complete a free trade zone that covers the whole of North and Central America. The agreement is already in force in the other Central American countries but Cost Rica is the first country in the region to hold a referendum on the issue. The deal locks in Costa Rica's current duty-free access to the U.S. market under the Caribbean Basin Initiative (CBI), and phases out many trade barriers facing U.S. manufacturers, farmers and service industry companies in Costa Rica. CAFTA supporters headed by current president and Nobel Peace prize winner Oscar Arias include agricultural exporters, local industries, international corporations operating from San Jose and the powerful tourism industry argue the agreement will bring investments and jobs. Those against fear Cafta could mean the end of the welfare state built during the last half century which includes free education, health services, pension schemes and relatively cheap government managed public utilities rates. Opponents include small farmers, government employees, trade unions, social organizations, students' movements and the indigenous population. Many of those rejecting Cafta assert that the "1948 revolution spirit" is at stake, recalling the civil war that drastically changed the history of Costa Rica from being another Central American "banana republic" to a stable democracy that abolished the Army and invested mainly in health and education of its people. The administration of President George Bush that only narrowly managed Congress to approve Cafta is also playing a role in the referendum and has warned that Costa Rica could lose valuable access to the U.S. market if the country rejects the agreement. United States respects Costa Rica's sovereign right to decide whether to join the pact, "but, I hope whatever decision is made is based on the facts," U.S. Trade Representative Susan Schwab said in a statement this week.