Protectionism in Times of Crisis

Arguing that the unusual growth in sugar imports is harming local production, the Alvarado administration decided to raise the tariff on products entering Costa Rica from 45% to 73% for a three-year period.

Tuesday, June 16, 2020

The Ministry of Economy, Industry and Commerce (MEIC) concluded the investigation requested by the Agricultural Industrial League of Sugar Cane (LAICA) and 4 mills, on the safeguard measure against imports of solid state, granulated sugar, known as white sugar, used for domestic and industrial consumption, justifying a deterioration in the main economic indicators of the National Production Branch (RPN), details an official statement dated June 15.

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The document reviews that the "... MEIC notified this Monday (June 15, 2020) to the parties, its resolution on the request for the application of a safeguard measure for a three-year period under the terms established in the Agreement on Safeguards and the Central American Regulations on Safeguard Measures, No. 33810-COMEX-MEIC, which will enter into force after the 30 days granted to the countries of the World Trade Organization (WTO), to conclude the prior consultations with the affected countries."

For Victoria Hernández, Minister of Economy, the "... use of trade protection tools and the strengthening of the bodies in charge of their application, as they allow balancing the benefits of trade with the support to the national productive sector to compete in better conditions in the markets and continue contributing to the economic and social development of the country."

Regarding the authorities' ruling, Juan Carlos Sandoval, general manager of La Maquila Lama, told that "... the MEIC measure was separated from the technical criteria they demonstrated during the hearings of the investigation process, since imports represent a very small portion of domestic consumption."

The official figures show that in the last four years the volume imported has tripled in the Costa Rican market, since between 2015 and 2019 the amount purchased increased from 4,089 tons to 12,484.

In this regard, Edgar Herrera, executive and marketing director of Laica, explained that "... this volume of income is causing damage to national production, which is why a measure was taken under the WTO's trade protection mechanisms."

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