Costa Rica targets strategic trade deals
From the print edition
Costa Rican trade officials, led by Foreign Trade Minister Anabel González, have been busy traversing the world in recent years in search of free trade agreements. Government officials say they are looking for agreements with countries that fulfill certain import needs and provide key export opportunities for Costa Rica.
In the past two years, Costa Rica approved a free trade agreement with China and entered into negotiations with the European Union, among others.
The Tico Times spoke with Foreign Trade Vice Minister Fernando Ocampo about the purpose of the agreements, and how they benefit Costa Rica’s national markets.
TT: What is the goal of trying to arrange all these free trade agreements?
FO: The idea is to strengthen the platform of free trade agreements that Costa Rica has, and to convert them into an important element for attracting investment.
This also is about Costa Rica being able to sell a large quantity of products in the world without paying tariffs. And through these [agreements], we are looking for a market to export our products.
Costa Rica proposed many years ago to diversify its export destinations, and these free trade agreements help us quite a bit. They’re very valuable tools for us, not only for increasing exports, but also for expanding the reach of our country’s products.
What makes it necessary for Costa Rica to have these free trade agreements?
What is apparent for a small country like Costa Rica is that international trade is necessary in order to have the conditions to grow.
And by being more connected with the international economy, having more export possibilities and making more possibilities for investment, the more growth we are going to have.
How do the agreements affect the Costa Rican market?
It seems that free trade agreements create possibilities for different sectors, depending on the country we have the agreement with. There are products that have more opportunities than others. For example, the agreement with the European Union has a huge component in place for selling agricultural exports to Europe. The Canada agreement works best with textiles. Each agreement fosters opportunities, but they are not all the same opportunities. Our interest is that all sectors in the country have a possibility of placing their products abroad.
Costa Rica’s Free Trade Agreements
CAFTA (Dominican Republic – Central America – United States)
Costa Rica approved the controversial Central America-U.S. Free Trade Agreement (better known as CAFTA) long after other countries in the region. The agreement barely survived a public referendum on Oct. 7, 2007, and went into effect in late December of the same year. The U.S. is Costa Rica’s biggest trade partner.
Canada and Costa Rica have had a free trade agreement since the turn of the millennium. But the countries began to modernize the pact in November 2011. Costa Rican Foreign Trade Vice Minister Fernando Ocampo told The Tico Times that a modernized agreement should be signed by mid-October.
The Caribbean Community, or Caricom, is made up of 15 small Caribbean nations including Belize, Dominica, St. Vincent and the Grenadines and St. Kitts and Nevis. Costa Rica signed the agreement with Caricom in 2004.
Costa Rica and China established diplomatic relations in June 2007. Negotiations on a free trade agreement with the Asian giant began soon after. President Laura Chinchilla signed the agreement into law in June 2011.
Chile completed a free trade agreement that went into effect in February 2001 with Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua.
Costa Rica and Panama have long maintained strong bilateral relations. The countries signed a trade agreement on Aug. 7, 2007. Panama is Costa Rica’s third-largest importer.
Since 1993, Costa Rica has had a free trade agreement with El Salvador, Guatemala, Honduras and Nicaragua.
Costa Rica’s first free trade agreement established outside of the isthmus came with Mexico in 1994. As business and trade grows between the two countries, the respective governments intend to update the terms of the agreement.
Since 2002, Costa Rica has had an agreement with the island nation of 10 million.
European Free Trade Association (EFTA)
The European Free Trade Association is comprised of Switzerland, Iceland, Liechtenstein and Norway. The group is negotiating with Costa Rica, Honduras, Panama and Guatemala on a free trade agreement.
Costa Rica is hoping to take advantage of the Asian island nation’s growing economy by negotiating an agreement with Singapore.
Talks between the governments of Costa Rica and Colombia on a free trade deal began in June. When the discussions began, Colombian President Juan Manual Santos said, “we hope this agreement will be ready by the end of the year.” The first round of negotiations took place July 30-Aug. 3 in Bogotá.
In May 2011, The Tico Times wrote that Peru and Costa Rica were finalizing a free trade agreement. Foreign Trade Minister Anabel González and members of the Foreign Trade Promotion Office met with Peruvian Foreign Trade and Tourism Minister Eduardo Ferreyros and members of the Peruvian Trade Chamber to complete the details of deal. However, since then, the agreement has lingered in Costa Rica’s Legislative Assembly, awaiting approval. Negotiations between the two Latin American nations began in September 2010.
Central America and the European Union started working on a deal this year to further political dialogue, cooperation and trade. The trade section of the agreement will enter into force by early 2013, after passage by participating countries’ legislators. In 2010, the EU was Central America’s second-largest trading partner after the United States, representing almost 9.4 percent of trade, or $15 billion.
After President Laura Chinchilla traveled to Seoul last month, the two countries agreed to explore a free trade agreement. The result came during talks between Chinchilla and her South Korean counterpart, Lee Myung-bak.
You may be interested
Costa Rica ends work week with new high in Covid hospitalizationsThe Tico Times - May 8, 2021
There are 1,175 people in Costa Rica hospitalized with Covid-19, a new record, the Health Ministry said in its Friday…
Authorities search for hiker missing in Chirripó NPAlejandro Zúñiga - May 7, 2021
Costa Rican authorities are searching for a woman who disappeared Tuesday while hiking to Cerro Ventisqueros, the country's second-highest peak…
Costa Rica unemployment rate remains elevated at 18.7%The Tico Times - May 7, 2021
Unemployment in Costa Rica was 18.7% in the moving quarter from January to March 2021, according to the National Institute…