Sugar Tariffs: Brazil Denounces Costa Rica

After the Costa Rican authorities raised the tariff on imported sugar from 45% to 73%, the South American country decided to raise before the World Trade Organization, a process to exercise the right of suspension.

Thursday, October 22, 2020

In June of this year, the Alvarado administration decided to increase to 79% and for the term of three years, the tariff on sugar entering the country. This increase was based on the argument that the unusual growth of imports was harming local production.

You may be interested in "Sugar: Protectionism and the Eternal Struggle"

In response to this protectionist measure, the Brazilian government decided to bring before the Council for Trade in Goods of the World Trade Organization (WTO) a process to exercise the right of suspension, which consists of eliminating a particular tariff concession to one or more of Costa Rica's export products.

This is done after the South American country and Costa Rica, did not reach any satisfactory agreement on compensation for the safeguard measure fixed to sugar.

The sugar importing company, La Maquila Lama, has filed appeals against this protectionist policy. As a result of these actions, the government decided to reduce from 34.27% to 27.68% the additional tax applied to sweetener purchased abroad.

According to Lucrecia Brenes, legal advisor of the company La Maquila Lama, "... the right of suspension consists of eliminating a certain tariff concession to a product exported to the country, as a measure against Costa Rica for having imposed a tariff on sugar."

Juan Carlos Sandoval, general manager of La Maquila Lama, said that "... Minister Hernandez, decided to set the safeguard measure away from the criteria of the technical team that carried out the investigation, 'hence we consider that maintaining the tariff is out of proportion and high', for that reason the company continues in the process of filing a lawsuit before the Contentious Administrative Court to stop the application of this measure and that affects the import of sugar."



More on this topic

Sugar: Brazil to Resume its Complaint against Costa Rica

April 2021

On April 26, Brazil will reactivate again on the agenda of the World Trade Organization, the complaint against Costa Rica for the imposition of a safeguard to increase the tariff on sugar.

The dispute began when in June of this year the Alvarado administration decided to increase to 79% and for a period of three years, the tariff on sugar entering the country. The argument for raising the percentage was that the unusual growth of imports was harming local production.

Consequences of Protectionism

November 2020

Based on the willingness of Costa Rican authorities to raise the tariff on imported sugar from 45% to 73%, Brazil decided to raise the entry taxes on four animal products from Costa Rica.

Months ago, the private sector has been warning of the possibility that the country's trading partners would apply reciprocal measures because of Costa Rica's unilateral decision to raise entry taxes on imported sugar.

Sugar Tariffs: More Threats to Costa Rica

November 2020

Following in Brazil's footsteps, Canada warned the WTO about the possibility of imposing compensation against the Costa Rican authorities' policy of raising the tariff on imported sugar from 45% to 73%.

Arguing that imports were growing unusually high and local production was being undermined, in June of this year the Alvarado administration decided to increase the tariff on sugar entering the country to 79% and for a period of three years.

Sugar War in Costa Rica Restarts

February 2017

The Ministry of Economy has decided to impose a new tax of almost 7% on sugar imported from Brazil, in response to a lawsuit brought by the union of local producers.

With this new protectionist measure the government is trying to put an end to a conflict that arose in 2015 between the Agricultural Cane League (Laica) and the importer Maquila Lama, when this company denounced a proposal to amend the regulation on sugar fortification claiming it attempted to restrict trade of imported grain.