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Costa Rica, China to explore creation of ‘special economic zones’

January 6, 2015

Costa Rica could find itself once again as a center of high-tech manufacturing, including cars and renewable energy equipment, after President Luis Guillermo Solís and Chinese President Xi Jinping signed a strategic partnership agreement that included future discussion of “special economic zones” in Costa Rica for Chinese enterprises, according to a statement from Casa Presidencial on Tuesday.

Solís made the creation of high-quality jobs one of the cornerstones of his presidential campaign in 2014 and his National Development Plan, and said that he hoped the creation of such free trade zones could serve as a motor for economic development and new infrastructure, especially outside the San José Greater Metropolitan Area.

The move may well be a bid for the next Intel, as the California-based microprocessor giant closed its manufacturing facility in Costa Rica that employed some 1,500 workers and accounted for 20 percent of the value of Costa Rica’s exports in recent years – about $2.4 billion, according to figures from the Foreign Trade Ministry.

The Solís administration did not offer any specifics as to the benefits Chinese manufacturers or service providers could expect, but a statement from Casa Presidencial mentioned the free trade Economic-Technological Development Area in Tianjin, in northern China, as a possible model to export to Costa Rica. Solís specifically mentioned automobiles and solar panels as some of the possible products these zones could produce. A feasibility study examining the financial, geographic, environmental and commercial aspects of the proposal is expected by October.

Foreign Trade Minister Alexander Mora, who is also traveling with the president in China, said that special economic zones would seek “anchor” businesses that could spark the growth of homegrown Costa Rican suppliers and other businesses around these areas, according to a statement.

Mora added that Chinese investors see Costa Rica as a beachhead from which their products could enter new markets in Latin America and the Caribbean. Costa Rica is the only country in Central America and much of the Caribbean that has diplomatic relations with the People’s Republic of China instead of Taiwan.

The trade minister said that the delegation was also seeking to increase exports to China by expediting the approval process for Costa Rican food products. Through the two countries’ free trade agreement, Costa Rica currently exports coffee, bananas, pork, and most recently, langostines to China.

President Solís said Monday that he wanted more trade and fewer handouts from the world’s second-largest economy, but that didn’t stop him from accepting a $24 million donation in development aid from the Chinese government.

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