The Costa Rican government has hired a high-powered Washington law firm to avert possible U.S. trade sanctions over unfair labor practices here.

The Office of the U.S. Trade Representative is investigating charges by a U.S. labor organization that Costa Rica violates workers' rights in several ways.If the U.S. trade office supports these allegations, it could revoke Costa Rica's preferential trade status, which is worth nearly $400 million a year in exports to this tiny Central American nation.

"The impact would be very difficult for Costa Rica," said Doris Osterlof, executive director of Cadexco, an exporters association here.

"This would be very unfair for a small country like (ours)," she said.

The labor allegations were contained in a report released earlier this month by the American Federation of Labor-Congress of Industrial Organization. The labor group has demanded the U.S. government remove Costa Rica and six other countries from the trade program known as the Generalized Systems of Preferences. Other labor offenders include Peru and the Dominican Republic

The trade sanctions would also affect Costa Rica's key trade benefit from the United States, the Caribbean Basin Initiative. With these trade agreements, Costa Rica has almost complete duty-free access to the U.S. market. Without these privileges, Costa Rican exporters would be faced with duties of up to 30 percent, Ms. Osterlof said.

"We could not compete," she said.

Costa Rican government officials have said the trade sanctions could affect 200,000 jobs here, and severely hinder foreign investment.

To counter the damaging charges, the government has hired the Washington law firm of Manatt, Phelps & Phillips, at a cost of up to $50,000, officials estimate. The lawyers will represent the Costa Rican government at trade panel hearings set to begin Nov. 17 in Washington.

"We need lawyers who understand Washington and the U.S. system," said Ms. Osterlof, who met with other private sector officials here to discuss the matter. Ms. Osterlof said U.S. firms also would suffer from any trade sanctions against Costa Rica, which would cripple this country's economy.

"If we don't have money, how are we going to buy U.S. products?" she said.

The United States is Costa Rica's largest trading partner, accounting for 44 percent of the country's total trade. Two-way trade between the two nations amounted to $1.8 billion in 1992.

The AFL-CIO accused the Costa Rican government of suppressing unionism, largely by promoting worker-management groups instead, known as solidarismo.