From Trade Barriers to Safeguards

Following what began as a blockade by Panama on the entry of animal products from Costa Rica, a formal proposal has been made to apply an import tariff to Costa Rican dairy products marketed in the Panamanian market.

Wednesday, November 4, 2020

In July of this year, Panama informed the National Animal Health Service (SENASA), an agency of the Costa Rican Ministry of Agriculture and Livestock (MAG), of the decision not to extend the export authorization to a list of Costa Rican establishments previously authorized and that have been trading in the Panamanian market for many years.

See "Movements in Regional Commercial Chess"

When this trade dispute began, it was perceived as a problem that could be solved by technical inspections of food production plants operating in Costa Rica. However, plans have changed, and now Panamanian authorities are focusing on taxing dairy products of Costa Rican origin.

Also see "More Technical Solutions, Less Policy"

The document sent by the Panamanian authorities to the Costa Rican Ministries of Foreign Trade (Comex) and Agriculture and Livestock (MAG), specifies that the intention is to create "... the special agricultural safeguard mechanism for certain dairy products. The safeguard mechanism will take the form of an import tariff."

Duayner Salas, head of the Comex told that "... 'in effect, we received from the trade authorities a proposal, which we are analyzing and reviewing to respond according to what is feasible to implement in terms of our bilateral relationship with Panama'."

According to Renato Alvarado, Minister of Agriculture and Livestock, "... the safeguard mechanism is not justified when the Panamanian market is in deficit in dairy products. They produce 60% of the consumption and Costa Rica participates with its exports in the other 40% of the market, without causing damage to the local industry."

You may be interested in "Dairy Products: What goes on in the consumer's mind?"

For the National Chamber of Dairy Producers of Costa Rica, it is not feasible to attend these proposals from any commercial partner that are not consistent with the framework that regulates the relationship between both economies.

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