Costa Rica 'backs US trade deal'

Early referendum results show a majority of voters in Costa Rica support a proposed free trade agreement with the United States.

With 89% of votes counted, 51.7% backed the treaty that would give Costa Rica greater access to the US market.

Opponents of the deal fear increased competition could ruin the country's successful economy and put the welfare system at risk.

Five other Central American countries have already ratified the agreement.

Costa Rica is the only country to hold a referendum on the Central American Free Trade Agreement, which will also covers Guatemala, El Salvador, Honduras, Nicaragua and the Dominican Republic.

Development opportunity

Supporters of the trade pact, led by President Oscar Arias, say it is a unique development opportunity that will benefit Costa Rica since it is a small country with few natural resources.

But critics object to requirements that Costa Rica open its telecommunications and agricultural sectors to greater competition, and fear it may flood the market with cheap imports.

Costa Ricans have for many years enjoyed more stability and a higher standard of living and public services than their neighbours in Central America.

Earlier Mr Arias said a "No" vote would undermine that position.

"Costa Rica would be saying 'no' to a market of 300 million inhabitants, and that would be a grave error," he said.

"It is a step in the wrong direction for the people of Costa Rica because the Free Trade Agreement would generate more wealth for us."

The issue has provoked repeated protests in Costa Rica, including a two-day strike by public workers last year.