Costa Rica Approves U.S. Free Trade Deal

In a close vote Sunday, the Central American nation of Costa Rica approved a free trade agreement with the United States. The vote split the country, with supporters arguing it would bring economic development, and critics warning that it would hurt farmers and small businesses. Steve Inskeep speaks with Lourdes Garcia Navarro about the deal.

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DEBORAH AMOS, host:

This is MORNING EDITION from NPR News. I'm Deborah Amos, in for Renee Montagne.

STEVE INSKEEP, host:

And I'm Steve Inskeep.

A surprising vote in one small nation suggests the way that world trade is moving. Voters in Costa Rica approved CAFTA - that's the Central American Free Trade Agreement. Other Latin American nations had already joined this pact with the United States.

NPR's Lourdes Garcia-Navarro has been covering this story.

And Lourdes, what made this a close vote?

LOURDES GARCIA-NAVARRO: Well, coming into the vote, it looked like the no's were going to have it, Steve. And it seems to have been only very narrowly approved. This will pretty much split the country. The final tally seems that it will have passed 52 to 48.

And that pretty much is reflective of the way people voted in the presidential elections last year when the conservative candidate, now President Oscar Arias, beat the leftist candidate by less than a percentage point.

We've seen this division in country after country in Latin America, and free trade agreements have been a very important topic that has pitted conservatives against people who lean left. This isn't just an issue in Costa Rica. Leftist leaders like Hugo Chavez of Venezuela and others have repeatedly denounced agreements like CAFTA. So this vote had wider implications for the region. Opponents say that free trade hurts local industry and agriculture because it opens the country up to competition from the better-equipped U.S. Proponents argue that it gives these countries access to the U.S. market and all the benefits that that implies.

INSKEEP: Well, now this is fascinating because you have people - large numbers - not quite a majority - in country after country deeply suspicious of these free trade agreements, and you have people in the United States deeply suspicious of the same free trade agreements, fearing that they will actually hurt the United States, not hurt Central American countries.

GARCIA-NAVARRO: That's exactly right. And there's these mixed messages as well coming from the U.S. government. On the one hand, you have the Bush administration - very strong proponent in the region of free trade agreements. It's pretty much been their policy throughout the region to really push these hard. I mean I've spoken to ambassador after ambassador in many of these Latin American countries. And all these U.S. ambassadors talk about free trade as the big panacea for the region. And meanwhile, of course, you have Democrats in Congress saying this isn't the way forward. This isn't good for the region. It isn't good for the United States. And so these mixed messages are constantly coming out from the United States.

And it's dividing people here too. It's a class issue. Poor people, people who work in the rural areas - they say that they don't see the benefits from free trade agreements with the United States. Meanwhile, on the conservative side they say we have to have this because we really need to have access to the biggest market in the world for our industries.

INSKEEP: Why wouldn't poor people in rural areas benefit from free trade with the United States?

GARCIA-NAVARRO: Well, they say that once free trade agreements are put into effect, they basically open up the agriculture sector to sort of cheap imports from the United States. And we've seen this, especially in a place like Mexico with NAFTA. You know, the countryside has really been affected by this. You know, the United States is one of the biggest producers in the world of corn, of pretty much anything you can think; and it's very, very highly efficient in a way that a lot of places in Latin America aren't. And so when all of a sudden you can get cheap chicken, you can get other products very cheaply, it tends to undermine the local agriculture.

INSKEEP: So the United States wants to sell agricultural products to Central America. What are some things that Central America wants to sell the United States?

GARCIA-NAVARRO: Well, if you look at the case of Costa Rica, for example, I mean, you know, the president there argues that this would benefit Costa Rica's textile and tuna industries. Central America wants to have the same opportunities that a country like Mexico has. And that means that they'll be able to, in their industry, export their products to the United States. I mean, one of they key issues, of course, is their maquila industries, which means that they put together things in low-wage factories for export to the United States. And that really is important for local industry all through the region.

INSKEEP: NPR's Lourdes Garcia-Navarro is covering the passage of the Central American free trade agreement by yet another nation - Costa Rica. Thanks very much.

GARCIA-NAVARRO: You're welcome.

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