WASHINGTON (Reuters) - President George W. Bush cleared the way on Tuesday for Costa Rica to formally join a regional free trade agreement between the United States, the Dominican Republic and four other Central American countries.

Bush issued a proclamation that brings the pact into force between the United States and Costa Rica on January 1.

"This step marks an important milestone in our relationship with Costa Rica, building on our strong economic and political partnership," U.S. Trade Representative Susan Schwab said.

Costa Rica began negotiations with the United States on the agreement in January 2003, along with Guatemala, El Salvador, Honduras, Nicaragua and later the Dominican Republic.

It was the last of the five Central American countries to strike a deal with the United States, and then the last of all the CAFTA countries to ratify the pact.

Costa Rica's voters narrowly approved the trade deal in a referendum in October 2007, but the nation's lawmakers continued to haggle over its terms. The legislature finally voted to implement the agreement in November.

U.S. exports to the Dominican Republic and the five Central American countries hit a record $22.4 billion in 2007, Schwab's office said in a statement.

(Reporting by Doug Palmer; editing by David Wiessler)