Costa Rica: Cost of Litigation with Mexico Over Avocados

Employers indicate that taking the dispute to an arbitration panel will cost many millions of dollars and will result in indemnization payments, as it is clear that trade agreements and phytosanitary standards were breached.

Tuesday, March 15, 2016

The announcement by the Mexican authorities to take Costa Rica to a World Trade Organization (WTO) arbitration panel because of the dispute over avocados, has caused concern among employers who are members of the Chamber of Exporters and Importers of Perishable Goods (Ceipp).

See also: "Avocados: Mexico and Costa Rica will Litigate in WTO"

An excerpt from the letter sent to President Solis and disseminated by states that "... we consider it appropriate to request that the President use his offices to prevent Mexican authorities from initiating a dispute process against Costa Rica with the WTO, which as you knows first hand, involves an expenditure of more than 500,000 euros ($558,000), plus the eventual claim for compensation by producers affected by the measure. "

See also: "Costa Rica: The Avocado Debate"

"... From the point of view of employers, the measure adopted by Costa Rica violates several trade agreements and phytosanitary regulations signed by the country, which puts us in a position which is very difficult to defend and also threatens to generate a high economic burden at a time when we are facing an adverse fiscal situation."

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More on this topic

Avocado Conflict: Panel of Arbitrators is Formed

December 2018

The WTO was part of the panel of experts that will resolve Mexico's lawsuit against Costa Rica, arising from the barriers imposed by the Costa Rican authorities to import the fruit.

The trade conflict emerged because of the barriers that Costa Rica imposes since 2014 to the entry of avocado from Mexico.

Costa Rica: Conditions to Import Mexican Avocados

November 2017

Hass avocados from Mexico can be imported in containers, provided that they come certified as fruit containers that are free from the sunspot disease or from areas certified as free.

The proposal put forward by the State Phytosanitary Service (SFE) to the Committee on Sanitary and Phytosanitary Measures at the WTO, where the conflict between Costa Rica and Mexico is being resolved, establishes that the fruit may be imported in any of three circumstances: the fruit is sent with a certificate that guarantees that it does not have sunspot, with a certificate that comes from areas free of the disease, or where there is compliance with rules agreed bilaterally by the two countries.

Costa Rica - Mexico Trade Dispute Escalates

March 2017

The Mexican government has filed a complaint with the WTO against Costa Rica over the imposition of restrictions on imports of avocados, in place since May 2014.

Mexican authorities are tired of waiting and have decided to initiate a process with the World Trade Organization in order to resolve the problem, only days after Costa Rica suggested, as a possible solution to the conflict, the implementation of a laboratory test for imports of the fruit.

Avocados: Mexico and Costa Rica will Litigate in WTO

March 2016

The irreconcilable positions of both countries over phytosanitary measures for the Mexican product form the backdrop to a possible arbitration panel with the world trade body.

Since Costa Rica stopped issuing permits for the entry of Hass avocados from Mexico, for phytosanitary protectionism reasons, (the country argues they are protecting themselves from the disease known as sunspot), neither country has managed to convince the other through technical and political methods to reopen the market.

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