Costa Rica is famous for sandy beaches and lush rainforests that make it a popular destination for U.S. tourists. But this month the small Central American country is making headlines for something else: a dead-heat election.

The main issue dividing the electorate is trade, and that debate could jeopardize the Bush administration’s economic plans for Latin America.

A predicted cakewalk for former president and Nobel laureate Oscar Arias could turn into a stunning upset. With just a few thousand votes separating him from his relatively unknown challenger, Otton Solis, all votes from the Feb. 5 election are being hand-counted in a process that could take weeks.

In his campaign, Arias vowed to implement the Central American Free Trade Agreement, a deal to lift trade and investment barriers between the United States and six countries in the region. The U.S. Congress approved the controversial pact by a paper-thin margin last summer, despite strong opposition from labor unions, farmers and the textile industry. Costa Rica is the only country that has not yet ratified the deal.

Solis made criticism of CAFTA a centerpiece of his campaign, charging that weakening import barriers and other regulations would hurt the country’s farmers and its environment.

Free trade agreements like CAFTA have proved a failure in Latin America. They have not brought about the prosperity promised by proponents. Instead, their key provisions of lowering barriers to imports and investment and increasing protections for private investors have resulted in quite the opposite. Poverty and inequality in Latin America are on the rise, economies have experienced little to no growth, and unemployment is rampant throughout the hemisphere.

The Bush administration is no doubt surprised to find stiff resistance to its trade agenda in Costa Rica, a long-time U.S. ally. This election is a clear indication that Costa Ricans, like many Latin Americans, will use democratic processes and institutions to punish leaders who attempt to govern contrary to the people’s will.

If Arias does wins the election, he should renegotiate the agreement or scrap it altogether. That way, things can return to normal in that paradise.

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