Sugar War in Costa Rica Restarts

The Ministry of Economy has decided to impose a new tax of almost 7% on sugar imported from Brazil, in response to a lawsuit brought by the union of local producers.

Monday, February 6, 2017

With this new protectionist measure the government is trying to put an end to a conflict that arose in 2015 between the Agricultural Cane League (Laica) and the importer Maquila Lama, when this company denounced a proposal to amend the regulation on sugar fortification claiming it attempted to restrict trade of imported grain.

See also: "Sugar Imports and Exports in Central America"

Juan Carlos Sandoval, manager of Maquila Lama, told CentralAmericaData: "We are extremely shocked because the new minister, on his first day in office, decided to depart from the technical criteria of the investigating authority which has been investigating this case for 18 months. The technical recommendation is that there has not been any dumping and therefore the case should have been archived, but the recently appointed minister, is looking for a way to apply a dumping margin of 6.82%. "  

See: "Sugar Conflict Continues in Costa Rica"

Sandoval explained that international sugar freight actually paid for was $36,000 for the imports that have been made, and the Minister changed this amount to $54,590, 52% more, with the purpose of finding dumping. "We will file the corresponding appeal next week, because the arguments that have been put forward for dumping to apply, are very weak. Remember that Maquila Lama already pays 45% tariffs and with this increase we would have to pay 51.82% tariff."

In regards to the decision taken by the Ministry of Economy, Edgar Herrera, executive director of Laica told Crhoy.com "...'We are putting forward a serious, solid and well-founded complaint. For the national productive sector it is essential that there is a timely and effective implementation of legitimate trade defense instruments recognized by the World Trade Organization (WTO) and contained in all Trade Agreements'. "

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EDITORIAL

The decision taken by the new chief of the Ministry of Economy reflects a clear interest in meddling in a process that should be resolved at a technical and non-political level. The decision to declare whether or not dumping occured in a particular market and what measures should be taken in response, corresponds to the office of Trade Defense, and should be free from any possible political bias.  

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