Oct. 8 (Bloomberg) -- Costa Rican voters gave their approval for a free trade agreement with the U.S. yesterday, handing President Oscar Arias a victory and signaling a desire for closer ties with the country's biggest trading partner.

With 98 percent of votes counted in the national referendum, 51.6 percent backed congressional approval for the agreement while 48.4 percent were opposed, Costa Rica's electoral tribunal said on its Web site.

Arias, winner of the 1987 Nobel Peace Prize, staked much of his political agenda on passage of the accord, known as DR- CAFTA, arguing it would boost growth, cut unemployment and benefit the poor in Central America's second-biggest economy. Opponents, including former presidential candidate Otton Solis, said the treaty would put small farmers out of business and give foreigners too much control over the $22 billion economy.

``The people of Costa Rica have said yes to the free trade accord, which for me is a sacred wish,'' Arias, 67, said after results were published. ``You have given me a mandate and, as a committed democrat, I will obey it.''

Costa Rica exported $3.2 billion worth of goods and services, including medical equipment and fruit, to the U.S. last year, representing 39 percent of total exports, the Ministry of Foreign Trade said on its Web site. The nation of 4 million people ran a trade deficit of about $1.4 billion with the U.S. last year, the seventh straight year imports outpaced exports.

U.S. Welcome

U.S. Trade Representative Susan Schwab said in an e-mailed statement that the U.S. ``welcomes'' the results of the vote and that Costa Rica will reap the ``benefits of greater regional economic integration.''

Opponents of the accord said they will continue seeking to ensure that the trade deal isn't approved by the country's legislature.

``We think the involvement of the White House and the U.S. Embassy in this campaign was a violation of national sovereignty,'' Jorge Arguedas Mora, president of the country's biggest telecommunications and electrical workers union, said by phone from San Jose.

The White House issued a statement Oct. 6 saying the accord wouldn't be renegotiated if it were rejected. The statement added that ``the United States has never before confronted the question of extending unilateral trade preferences to a country that has rejected a reciprocal trade agreement.''

A rejection of the accord would have marked the first time a free-trade deal with the U.S. was refused by any country. The agreement was previously approved by El Salvador, Honduras, Nicaragua, the Dominican Republic and Guatemala, Central America's biggest economy.

Arias won the Nobel Prize for uniting Central American leaders behind a plan in 1987 to bring an end to region's civil wars.

To contact the reporter on this story: Bill Faries in Buenos Aires at wfaries@bloomberg.net.

Last Updated: October 8, 2007 17:07 EDT