MEXICO CITY — A free-trade pact once thought to be slam-dunk is now up for grabs in Costa Rica, where President Oscar Arias on Friday announced that his government would hold a national referendum on the controversial measure.
Arias, a supporter of the Dominican Republic-Central American Free Trade Agreement, known as DR-CAFTA, called the pending vote "a triumph" for democratic procedure that would let Costa Ricans determine whether to participate in the pact, to which the U.S. is a party. The agreement has divided the public and generated massive street protests over the last year.
"We're going to decide the destiny of [DR-CAFTA] ... voting in peace and in tranquillity, not in the streets," Arias said. He did not set a date for the vote.
Arias would appear to be making a virtue out of necessity. His announcement came a day after a surprise ruling by an election tribunal that would have let a citizens group opposed to the pact move forward with an effort to put the deal to a binding referendum. Previously, Arias had expressed little interest in such a public vote and appeared to have the support needed in Congress to approve the pact.
"He realized he was going to look bad if he appeared to be opposed to [a referendum], so he is throwing his weight behind it," said Katherine Stanley, who has reported on the trade agreement for the Tico Times, an English-language publication in the capital, San Jose. "This ruling caught everyone by surprise, Arias included."
Friday's developments were also a setback for the Bush administration, which has long pushed free trade as the key to growth and development in Latin America. Opposition to the pact in Costa Rica, the most prosperous nation in Central America, may be a sign of waning enthusiasm for similar accords in the region, said Peter Hakim, president of the Inter-American Dialogue, a Washington-based think tank.
"It suggests that the U.S. is losing ground in Latin America," Hakim said. "It says that an agreement with the U.S. isn't valued as much as it once was."
Farmers in Costa Rica have steadfastly opposed the pact, fearing a flood of subsidized U.S. food products. Public sector unions oppose the opening of the nation's telecom sector, which is dominated by a state-owned firm. Costa Rica is the only nation eligible for the pact that has yet to ratify it. Other participants are the Dominican Republic, El Salvador, Honduras, Guatemala, Nicaragua and the U.S.
Public opinion surveys show that Costa Rica is deeply divided. A recent poll by the national daily La Nacion said 35% of those surveyed supported the pact, 26% opposed it and 40% were undecided.