The time and cost of maritime routes between Costa Rica and China, and the capacity that the food industry develops to take advantage of existing opportunities, are factors that in the coming years will influence the evolution of the FTA signed between the two countries.
Thursday, April 8, 2021
Ten years after the entry into force of the Free Trade Agreement between China and Costa Rica, Costa Rican authorities assure that they are in a continuous negotiation process involving the National Animal Health Service (Senasa) and the State Phytosanitary Service (SFE).
The agricultural and industrial sectors are the biggest winners in the last decade. According to Andres Valenciano, Minister of Foreign Trade, "... 'the agricultural sector increased its exports to China 8 times since 2010 and industrial exports tripled in that same period. Bilateral trade exceeds $2.2 billion in 10 years and is growing year by year. The FTA is a living tool that evolves according to the commercial conditions of both countries."
Although the numbers are good, the Costa Rican business sector believes that the figures could be more favorable if the logistics issue is improved, since the current situation of the commercial maritime routes has made exports to the Chinese market more expensive.
For the Chamber of Exporters (Cadexco), sales of agricultural products to China do not reach their potential, due to the complex and time-consuming transit of goods from Costa Rica to Asia.
Laura Bonilla, the president of Cadexco, explained to Crhoy.com that "... there are multiple barriers that exporters must overcome, among them the high transit times of goods, high export costs, among others. For example, the lack of routes has affected the fact that Panama has to be used as port of origin to export to the Asian country, there are more barriers that exporters have had to overcome, such as phytosanitary certifications and risk analysis, issues that must be reviewed by the corresponding authorities'."
The commercialization of shrimp, milk products, shrimp, blueberries, meat, beer, water, coffee, baby food and sauces are some of the market opportunities that the Foreign Trade Promoter has identified in the commercial relationship between the Asian giant and Costa Rica.
As a result of the global trade imbalance that has become evident in the last year and the considerable increase in logistics costs, Guatemalan importers are beginning to look to Brazil as an option to replace purchases from Chinese companies.
In early March of this year, CentralAmericaData reported that as a result of the imbalance faced by world trade flows, shipping lines have changed their routes and prefer to move empty containers to Asia, a situation that at that time already generated shortages and caused increases in transport rates.
After the Quetzal Port Company of Guatemala and the Port of Chiapas, Mexico, signed an agreement for strategic commercial promotion, it is expected that in May the short sea route will begin to operate.
The potential offered by the Port of Chiapas as a logistic node for commercial exchange from and to Central America, as well as with other international markets, makes it a strategic place for the promotion of the Short Sea Shipping (SSS) project with Guatemala and eventually with other Mesoamerican countries, informed the Mexican Secretariat of Communications and Transport (SCT).
Because of the lower-than-projected volume of cargo shipped on the September and October services, the maritime route between Port Moin and Shanghai was suspended.
Costa Rican exporters are negotiating to change the frequency of the maritime route between Port Moin and Shanghai from monthly to weekly from February 2020.