Improved Diversity Strengthens Export Sector

IMPROVED product diversity andincreased exports to Asian markets helpedCosta Rican exports rise to $530 million inFebruary, Trade Minister Manuel Gonzálezannounced recently.He added that the potential for futuregrowth is even bigger if the countryimproves its infrastructure to increase itscompetitiveness.The $28 million – or 4.6% – increaseover January’s export total demonstratesthe dynamism of the country’s export sector,González said. The total for the firsttwo months of the year is $1.03 billion,compared to $987.3 million in 2004 and$978.1 million in 2003.“We are promoting new niches…andthe diversification of products and destinations,”González said. He pointed to boomingtrade relationships with China andHong Kong, as well as to improved sales ofpineapple, melons, mangoes and ornamentalplants, as examples of these trends.EXPORTS of pineapple grew 33.7%during January and February, while melonexports increased 16.3%.Abel Chávez, secretary of the Melonand Pineapple Producers’ Chamber, toldThe Tico Times that the first two months ofthe year are generally among the strongestfor pineapple exports. He estimates thetotal 2005 increase will be 20%.He added the sector has experiencedenormous growth during the past 10 years,from approximately 30 producers in themid-1990s, when Costa Rica first began toexport the fruit, to 850 producers today,cultivating 26,000 hectares.“There is pineapple in the entireSouthern Zone, the Atlantic, and thenorth,” Chávez said.ACCORDING to González, the countryhas not yet realized its export potential.“Costa Rica cannot lose sight of twothings,” he said. “We can export muchmore, if we see the whole world as ourmarket, and if the levels of investment arehigh and comfortable.”He said the nation’s infrastructure, bothof roadways and ports, is the area most inneed of investment, since tropical fruit producersare often forced to watch their productsgo bad because of transportationdelays, creating a bottleneck and preventingexports from increasing more rapidly.Nationwide unity and impetus will benecessary to solve this problem, accordingto the minister.“The entire country has to worry about(Costa Rica’s) ability to compete,” he said.“It’s not just the price, and producing. It’sbringing it to its destination in a timelymanner.”Chávez said the lack of available landadds pressure to the situation. While moreland is available in isolated regions, thelack of a sound infrastructure makes transportingproducts from those regions nextto impossible.EXPORTS to the United States, whichreceives nearly half of Costa Rica’sexports, rose only 0.2%.“The tendency (with the United States) istoward stability,” said González, who deniedthe slow growth is a cause for concern.Martín Zúñiga, head of the ForeignTrade Promotion Office, said a drop inexports of microprocessors caused most ofthe lower-than-expected growth in exportsto the United States.“Ninety-nine percent of products arevery competitive toward the UnitedStates,” he added.In contrast, exports to China, thoughtotaling only 2.7% of the Costa Rican market,jumped 121.8% since last year.Exports to Hong Kong, which represents4.8% of the market, jumped 184.4%.The principal exports to both Chinaand Hong Kong were television and radioparts and other high-tech products, as wellas wood and ornamental plants.EXPLORING these and other nontraditionalAsian markets, includingThailand and Vietnam, is a priority for theTrade Ministry, González said. However,he added the government is not yet consideringa free-trade agreement with China.“We have to follow the behavior ofthose markets,” he said. “(A trade agreementwith China) is not something we areconsidering now, nor will it be a priority.”Issues that will be priorities includeurging the ratification of the CentralAmerican Free-Trade Agreement with theUnited States (CAFTA – see separatestory) and the free-trade agreement withthe Caribbean community (CARICOM).The ministry is also working to resolvethe banana-tariff conflict between LatinAmerican banana producers and theEuropean Union.The union has announced it plans toincrease tariffs on Latin American bananasfrom 75 euros per ton ($98) to 280 euros($300), effective in 2006. While LatinAmerican countries maintain a united frontagainst the proposed hike, the union hasstuck to its guns as well (TT, Feb. 4).The World Trade Organization (WTO)is examining the issue.