Another negotiation attempt to close the commercial aspects of the Association Agreement concluded without consensus.
Europe was reluctant to change its position regarding 4.500 metric tons of milk powder, with a 10% annual increase, and Central America stood firm in offering access for only 500 metric tons of milk.
“Negotiators and local producers assured that milk powder is a very sensitive topic, as Europe grants millionaire subsidies to its dairy industry, while Central America does not”, reported Nacion.com.
Some countries abandoned the last negotiation round, as Europe maintains its ground despite Central American pressure.
The delegations from Nicaragua and El Salvador will return to their countries to consult on the last European proposals, which they deem insufficient.
Costa Rica will pile on the pressure until an adequate ‘balance’ is reached. “Europe must understand our needs, this is crucial”, said head negotiator Roberto Echandi.
Even after long sessions, the European Union and Central America have been unable to close the commercial chapter of their Association Agreement.
Central American countries are still demanding larger access quotas for products deemed ‘sensitive’ (sugar, products with high sugar concentration, meat and rice) and better tariffs for tropical fruits such as banana.
China granted Costa Rica immediate, tariff free access for the products which compose 99.6% of the value of Costa Rican exports (A Category).
For 0.10%, tariffs will be waived gradually (B Category), 0.19% in 10 years (C Category), 0.05% in 15 years (D Category), and just 0.01% will continue paying the current tariff.
In terms of number of products (tariff lines), 94% belong to categories A and B, 2% to the C Category, 1% to the D Category, and 3% to the E Category.
In this round both parties expect to close a number of chapters, including national treatment, food health measures, intellectual property and cooperation.
Fernando Ocampo, Costa Rica's chief negotiator, explained that they have already agreed on 90% of the Free Trade Agreement regulation.
Newspaper La Prensa Libre published additional comments by Ocampo: "We will focus our attention on a number of sensitive topics, including market access for some products considered crucial by Costa Rica as well as rules of origin considerations".
President Oscar Arias signed a law modifying the Free Zone regime in Costa Rica.
The bill was introduced by the Executive on April 2009, and was finally passed on December 17th by the Legislative Assembly.
This law "... intends to attract investment, foster productive chains with local companies and incentive companies to invest outside the Expanded Greater Metropolitan Area, which was specially defined for this law", reported Nacion.com.
Costa Rica ruled out the possibility of reaching an agreement for reducing European tariffs to banana this week.
Marco Vinicio Ruiz, Costa Rica's Commerce minister, ruled out a banana agreement between Latin America and the European Union this week, because the technical meeting was suspended.
From Pa-digital.com.pa: "'Yes, I categorically declare that we won't close the agreement this week', stated Ruiz".
This was the official posture of a delegation from the European Parliament, in a visit to Costa Rica.
Marco Vinicio Ruiz, Costa Rican Commerce Minister, explained the stance of the Europeans, who want to wait for the Honduran elections to resume negotiations after them.
"If this electoral process is carried out in a reasonable manner, with international supervision, and many governments endorse them, it is likely that negotiations will be resumed immediately after them", stated the minister.
Trade representatives from Costa Rica will meet with EU delegates to resume negotiations.
Bruno Stagno, Foreign Relations minister, and Marco Vinicio Ruiz, Commerce minister, will meet with Europe's foreign relations commissar, Benita Ferrero-Waldner, with the objective of unfreezing the negotiation process, which was paralyzed by the Honduran crisis.
Costa Rica's Commerce Ministry is proposing a change in the rules, in order to close the agreement without Honduras.
So far, Europe's stance has been to put the process on hold until the Honduran crisis is resolved with the restitution of deposed president Manuel Zelaya, an event that may never occur. If the winner of the planned elections in Honduras is not recognized, the Association Agreement with Europe could be postponed sine die.
In 2009, Foreign Direct Investment would fall 30% when compared with 2007, when a record $2.02 billion were received.
This was stated by Commerce Minister Marco Vinicio Ruiz, who added that the amount for 2008 was 7% higher than 2007.
Website Univisión published further comments by Ruiz: "The reduction for 2009 will be close to 30%. It won't affect manufacturing companies, but real estate and tourism".
China has an adamant stand against the entry of Costa Rican sugar to its market, in the negotiations for the Free Trade Agreement.
Although this may not completely exclude the product from the treaty, it might complicate the negotiation, said Marco Ruiz, Costa Rican Trade Minister.
"From the beginning, Costa Rica wanted the entrance of this product, together with others like coffee and processed juices", reported newspaper La Prensa Libre.
In this negotiation round, the key topic is market access for products considered "sensitive".
In Beijing, from September 7th to 11th, negotiating teams from both countries will discuss special tariffs for specific products. It has already been agreed that 90% of the products will enter both markets tariff-free.
"Costa Rica has special interest in sugar, meat, coffee, beer, sauces and pasta, among others", reports Nacion.com.
Trade Minister Marco Vinicio Ruiz is joined by 7 companies in a trade mission to Peru.
Ruiz will hold a meeting with his homologous Martín Peréz, in order to exchange opinions on topics of common interest.
The trade mission is composed by companies from different sectors like chemical-pharmaceutical, food and beverages, among others.
"This is a great opportunity for national businessmen, as well as for their Peruvian equivalents, to make business together and find out areas of common interest", said Ruiz. "I am sure that this visit will mean better and wider commercial opportunities for both countries".