New Caribbean Trade Pact Sparks Optimism
PRESIDENT Abel Pacheco and Jamaican Prime Minister Percival J. Patterson, in representation of 14 members of the Caribbean Community (CARICOM), on Tuesday signed the free-trade agreement between Costa Rica and CARICOM in the Jamaican capital city of Kingston.
“The signing of this free-trade agreement is a step forward in the effort to bring our peoples closer together, strengthen our human development possibilities and consolidate our national democracies,” Pacheco said. “… This treaty will be, for both sides, an opportunity to increase commercial exchanges and investment flows
and stimulate job growth and production.”
THE agreement is the first bilateral preferential trade agreement CARICOM has signed with any country. CARICOM’s members are Antigua and Barbuda, The Bahamas, Barbados, Belize, Dominica, Grenada, Guyana, Haiti, Jamaica, Montserrat, Saint Lucia, St. Kitts and Nevis, St. Vincent and the Grenadines, Suriname and Trinidad and Tobago. Bahamas, an observer and not a full member of CARICOM, is not part of the trade agreement.
The treaty began as a bilateral trade negotiation between Costa Rica and Trinidad and Tobago in 2002. Negotiations concluded in March 2003, but the official signing of the treaty was delayed a year so that its texts could be adapted to include the rest of CARICOM.
For the treaty to go into effect, it must be ratified by the legislative bodies of Costa Rica and at least one of the CARICOM countries, according to the Costa Rican Foreign Trade Ministry (COMEX).
COSTA Rican Foreign Trade Minister Alberto Trejos called the treaty a “nice opportunity” for all parties involved.
CARICOM countries are the fourth largest destination for Costa Rican exports, after the United States, the European Union and Central America. Between 1995 and 2003, yearly Costa Rican exports to CARICOM nearly quintupled, from $14.1 million to $69.8 million. Since 1995, Costa Rican exports to the region have been growing at an average rate of 22.1% a year, according to COMEX.
CARICOM countries exported $16.7 million in goods to Costa Rica last year. Since 2001, Costa Rica has maintained a large surplus with the region (it exports more than it imports). The trade surplus in 2003 totaled $53.1 million.
Costa Rica’s main exports to CARICOM are glass containers, prepared foods, medicines, soaps and cooking equipment.
CARICOM’s main exports to Costa Rica are natural gas, aluminum sulfide, radios and televisions, according to COMEX.
UNDER the free-trade agreement, 95% of Costa Rica’s export products, including most of its agricultural products, will be able to enter CARICOM duty-free.
CARICOM countries are net importers of agricultural products. This greatly benefits Costa Rica, which per capita is one of the world’s largest exporters of agricultural products, Trejos said.
“CARICOM’s market, not only because of its nature, but as result of its proximity, constitutes a very attractive destination for our exports,” he explained.
Pacheco and Trejos noted the trade agreement would benefit both parties because most of the goods each one produces are complementary – the countries specialize in different types of goods, so there is little direct competition or threat of one country’s products driving another’s products out of the market.
“IT’S a negotiation in which both sides have won,” Pacheco said during the signing ceremony in Jamaica. “Costa Ricans have access to a market of 15 million inhabitants. You [the Caribbean] will have access to national market of 4 million inhabitants, which can serve the Caribbean nations as a platform through which to access the region of Central America, a market that has been explored little by the people of the Caribbean.”
Primer Minister Patterson was equally optimistic.
“The negotiations are done, the rest no longer depends on us, it depends on the productive sector,” he said.
With the goal of extending the commercial ties that already exist between Costa Rica and CARICOM, a delegation of Costa Rican business leaders accompanied Pacheco and Trejos to Jamaica.
“AS with all new markets, we have a great interest in entering this one,” explained Marco Antonio Meléndez, of processed meat cooperative Coopemontecillos. “It’s in our favor that Costa Rican products are well received here.”
Costa Rican businesses see CARICOM as a region ripe with potential opportunities. Orlando Rojas, president of the Federation of Producers of the Caribbean Region (FUPROCA), a Costa Rican company that sells edible tubers such as yuca, ñame, malanga and tiquisque – all products that will receive duty-free access under the treaty – held his first meetings with potential distributors this week.
“This is very important for us because it expands our business possibilities,” Rojas said “We are willing to explore this market and believe we have the potential to export here.”
You may be interested
Bikes have a right to the road, MOPT remindsThe Tico Times - March 1, 2021
The Public Works and Transport Ministry (MOPT) is reminding drivers that cyclists have a right to the road. In a…
One plane’s 21-hour journey from Costa Rica to AustraliaAlejandro Zúñiga - March 1, 2021
The coronavirus pandemic has wreaked havoc on the aviation industry. Anyone who has recently flown through Costa Rica's Juan Santamaría…
March 2021: These are Costa Rica’s coronavirus measures this monthAlejandro Zúñiga - March 1, 2021
Happy March! These are Costa Rica's coronavirus restrictions this month: Travel and borders Costa Rica is welcoming tourists who arrive…