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 79% 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 Nacion.com 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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More on this topic

Sugar Import: Slightly Low Tariff

August 2020

Following an appeal filed by the importing company La Maquila Lama with the Costa Rican authorities, the government decided to reduce the additional tax on sugar purchased abroad from 34.27% to 27.68%.

With the reduction decreed by the Ministry of Economy, Industry and Commerce (MEIC), a decision that was published on August 18 in The Gazette, the total tax applied to imported sugar will be 72.68% (45% original plus 27.68% of the safeguard), which is slightly less than the 79.27% (45% original plus 34.27%), which was in force until before the enacted amendment.

Sugar: Protectionism and the Eternal Struggle

January 2020

In Costa Rica, sugar producers are asking the government to raise tariffs or entry taxes on imports, and importers are opposing, as this would raise the final price to the consumer.

In July 2019, the Sugar Cane Industrial Agricultural League (LAICA) asked the Ministry of Economy, Industry and Commerce (MEIC) to launch an investigation with the aim of imposing additional tariffs on imported sugar, arguing that purchases from abroad would damage local production.

Protectionists Back to the Burden

July 2019

Arguing that local production must be protected, Costa Rican sugar manufacturers demand that, in addition to the 45% common levy already charged on imported sugar, an additional tariff must be imposed.

The request was made by Liga Agricola Industrial de la Caña de Azucar (Laica) to the Ministry of Economy, Industry and Commerce (MEIC), as businessmen claim that there is an exponential growth in sugar imports in recent years, which has put in check the Costa Rican sugar cane sector.

Another Attempt to Defend Sugar Monopoly

March 2017

With a lawsuit against the Ministry of Foreign Trade in Costa Rica the virtually monopolistic Liga Agrícola Industrial de la Caña de Azúcar is attempting to limit the quotas for historical importers of the grain.

The administrative proceedings presented by Liga Agrícola Industrial de la Caña de Azúcar (LAICA) against the Ministry of Foreign Trade (COMEX), aim to limit the quotas for historic imports of sugar, and could have consequences for other mass consumption products in the country.

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