Protectionism = Economic Losses

As a result of the blockade that has been in place since July 2020 on the entry of animal products from Costa Rica into the Panamanian market, Costa Rican exports to Panama are reported to have fallen and companies such as Dos Pinos are reporting losses in the millions.

Wednesday, May 5, 2021

The trade conflict began when Panama informed the National Animal Health Service (SENASA), an agency of Costa Rica's Ministry of Agriculture and Livestock (MAG), of the decision not to extend export authorization to a list of previously authorized Costa Rican establishments that have been trading in the Panamanian market for many years.

Although the Costa Rican government decided to send on January 11, 2021 a request to open the consultation mechanism to the World Trade Organization (WTO), the trade dispute has not yet been resolved.

After 10 months of trade conflict, Costa Rican sales to Panama have decreased and companies continue to report economic losses.

Data from the Foreign Trade Promoter (Procomer) specify that between 2019 and 2020, Costa Rica's total exports to Panama decreased by 18%, going from $616 million to $502 million.

The figures detail that between the first quarter of 2020 and the same period of 2021 Costa Rican sales to Panamanian companies also decreased, in this case by 6%, going from $138 million to $130 million.

According to representatives of the Costa Rican Chamber of Exporters (Cadexco), the drop in Costa Rican exports destined for Panama, shows that commercial participation has been lost, which is difficult to recover in markets as competitive as the Panamanian one.

Nacion.com reports that "... the company Dos Pinos assured that its sales dropped by $50 million accumulated in the 10 months since July 1, 2020, during which Panama has maintained the closure to the entry of Costa Rican products, including milk and other goods."

The article adds that "... the Costa Rican economy that needs so much to be reactivated is losing very important foreign currency, such as those generated by the commercial exchange with Panama, Dos Pinos stated in a response."

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More on this topic

Trade: Costa Rica Acts Against Panama

January 2021

As a result of the blockade to the entrance to the Panamanian market of products of animal origin coming from Costa Rica, on January 11 the Costa Rican government requested to the WTO the application of the mechanism of consultation with Panama.

The trade conflict began in July 2020, when 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 which have been trading in the Panamanian market for many years.

From Trade Barriers to Safeguards

November 2020

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.

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.

More Technical Solutions, Less Policy

September 2020

Once Panama blocked the entry of animal products from Costa Rica, discussions at the technical level progressed, but when the issue was brought to the political arena, the process to solve the trade conflict stalled.

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

Entrepreneurs Support Trade Dispute

August 2020

After the Panamanian government agreed to ban the entry of animal products from Costa Rica, Panamanian businessmen supported the measure and asked to discuss the export and import requirements, since they claim that their agricultural products are prevented from accessing the Costa Rican market.

The trade dispute began when on July 10 Panama informed the National Animal Health Service (SENASA) of the Costa Rican Ministry of Agriculture and Livestock (MAG) of the decision not to extend export authorization to a list of previously authorized Costa Rican establishments that have been exporting to Panama for many years.

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