Costa Rica-Panama trade pact to take effect in November

A free-trade agreement between Panama and Costa Rica will take effect next month, and tariffs will drop beginning in January, the Foreign Trade Ministry (COMEX) announced Friday after a visit by Panamanian President Martín Torrijos.

The treaty, signed in August 2007 and ratified by the Legislative Assembly earlier this month, will allow 91 percent of Costa Rican exports to Panama to cross the border duty-free immediately. With a few exceptions, the remaining products will lose their tariffs over three to 17 years. The treaty also allows the Costa Rican Electricity Institute (ICE) to offer services in Panama, exempting ICE from laws restricting other state telecom providers.

“The best way to protect people from the inevitable fluctuations in the economy is to open our markets and diversify our production,” President Oscar Arias said at a press conference Friday with Torrijos. “We respond to fear and desperation with more free-trade agreements, more foreign investment and more incentives for the products we export.”

In other news, Torrijos said he may call on Central American countries for technical help on a $5.25 billion project to expand the Panama Canal. Still, he added, the state would fill as many jobs as possible using Panamanian labor.