The second largest free trade area on the American continent. Agreed in 2004, it included the United States, the Dominican Republic, Costa Rica, El Salvador, Honduras, Nicaragua, and Guatemala. It proved very controversial owing to the large wealth differential between the USA and the other participants, causing fears that the weaker economies would be swamped by US goods. Following his election victory in 2006, Arias Sánchez announced that Costa Rica would ratify CAFTA. By contrast, another veteran re‐elected to the presidency, Ortega, announced that Nicaragua would reject CAFTA in favour of co‐operation with Venezuela under the leadership of Chávez.
Subjects: Contemporary History (Post 1945).