SAN SALVADOR, El Salvador (By Diego Mendez, Associated Press) March 1, 2006 — El Salvador on Wednesday became the first Central American nation to join a regional free trade agreement with the United States.

President Tony Saca inaugurated the pact in a ceremony at a food exporting company.

But about 3,000 people marched elsewhere in the capital, San Salvador, to protest the agreement, which they say will hurt local farmers, street vendors and organized labor faced with competition from cheaper goods or with tighter restrictions on sales of counterfeit goods.

"From this day on we can count on a much larger market for our exported products and services," Saca said. He predicted more jobs and better living conditions for Salvadorans.

Guatemala, Honduras, Nicaragua, and the Dominican Republic have ratified the treaty but are still working on enabling legislation. Costa Rica's legislature is still debating the accord.

El Salvador already is Washington's closest political partner in the region. The country has made the U.S. dollar a domestic currency and is the only Latin American country with troops still serving alongside U.S. forces in Iraq.

The government predicts the agreement will spur economic growth, with gross domestic product rising by 3.5 percent this year and growing by an estimated 2 to 3 percent in 2005.

President Bush signed the free-trade agreement into law in August, after it passed by only two votes in the House of Representatives.

U.S. critics contend the deal would expose U.S. workers to unfair competition from low-wage nations and move more manufacturing jobs overseas.