White House warns Costa Rica ahead of trade vote

By Doug Palmer

WASHINGTON (Reuters) - The United States will not renegotiate a free trade agreement with Costa Rica if voters in that country turn down the pact in a referendum on Sunday, the White House said.

"If the free trade agreement is rejected, the United States will not renegotiate the agreement," White House spokeswoman Dana Perino said in a statement on Saturday that was the latest in a series of conflicting messages from Washington ahead of Costa Rica's vote.

"The United States has never renegotiated a free trade agreement that has been approved by the Congress," she said.

Perino also warned that some trade benefits that Costa Rica now enjoys under the separate Caribbean Basin Initiative could be at risk if voters decide not to join the U.S.-Central America Free Trade Agreement (CAFTA) along with four of its neighbors, the United States and the Dominican Republic.

"With respect to trade preferences provided under the Caribbean Basin Initiative which will expire in September 2008, the United States has never before confronted the question of extending unilateral trade preferences to a country that has rejected a reciprocal trade agreement," Perino said.

The referendum has split Costa Rica, with President Oscar Arias and some businesses saying CAFTA will bring investment and jobs. Opponents says it will mean a flood of cheap farm imports and limit the country's sovereignty by taking investment disputes to international arbitration.

The U.S. House of Representatives narrowly approved the agreement in 2005, with most Democrats voting no. Many Senate Democrats were also opposed.

DEMOCRATS REASSURE VOTERS