Unless intra-regional trade in chemical contents and residues, micronutrients and food preparations is regulated in a balanced manner, trade relations in Central America could face obstacles in the future.
Trade between Central American countries is essential, since a considerable proportion of foreign sales by local companies are destined for other markets in the region.
In order to overcome the trade conflict resulting from the blocking of the entry of animal products from Costa Rica into the Panamanian market, both nations have started a dialogue.
The trade conflict between the two countries 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 export authorization to a list of previously authorized Costa Rican establishments that have been trading in the Panamanian market for many years.
The impact of the covid-19 crisis on the wholesale sector in Central America is predicted to be explained, to a greater extent, by the expected drop in trade in disposable items.
The "Information System for the Impact Analysis of covid-19 on Business", prepared by the Trade Intelligence Unit of CentralAmericaData, measures the impact that the crisis will have on companies according to their sector or economic activity, during the coming months.
The two countries signed an action plan to determine the steps to be taken to achieve a Mutual Recognition Agreement for their Authorized Economic Operators and to facilitate international trade operations.
Once the Mutual Recognition Agreement is signed, the companies that are part of the Authorized Economic Operators Program in Costa Rica will obtain more agile conditions, facilitation of international trade operations, application of best practices in security standards, use of information, and control of traceability, informed the Costa Rican government.
During the first two months of the year, Costa Rican exports to countries in the region totaled $393 million, 3% less than what was reported for the same period in 2018.
According to data from the Promotora del Comercio Exterior (Procomer), in the first two months of 2019 Costa Rica's exports increased by 3.2% over the first two months of 2018, going from $1.743 million to $1.800 million.
Petroleum products, iron and steel, food and pharmaceutical products, headed last year's purchases from companies in the South American nation from Central American countries.
Figures from the Central American-Ecuador Trade Information System complied by the Business Intelligence Unit at CentralAmericaData: [GRAPHIC caption = "Click to interact with the graph"]
Plastic articles, pharmaceutical products and food preparations last year led the commercial exchange between companies from the Caribbean nation and Central American countries.
Figures from the information system of Commerce between Central America and the Dominican Republic, compiled by the Trade Intelligence Area of CentralAmericaData: [GRAFICA caption="Click to interact with graphic"]
Fuels, plastic goods and pharmaceutical products led last year's imports made by Central American companies in the South American nation.
Figures from the information system of Commerce between Central America and Colombia, from the Trade Intelligence Area of CentralAmericaData:[GRAFICA caption="Click to interact with graphic"]
In the first quarter of the year, the country recorded exports of $2.810 billion and imports of $4.012 billion.
The National Institute of Statistics and Census of Costa Rica reported that in the first three months of the year, the main export products were pineapple, bananas, medical devices and prosthetic devices, with sums of $210 million, $199 million, $192 million and $155 million, respectively.
In the region there are nearly 4,000 retail points of sale of hardware products, 45% of which are concentrated in Guatemala and Costa Rica.
Analysis by the Business Intelligence Unit at CentralAmericaData yields interesting results about hardware stores function and where they are located in Central American countries.
In 2016 the value of imported plastic and its manufactures in the region amounted to $3.668 million, equivalent to 1.7 million tons, 9% more than the volume purchased in 2015.
Figures from the information system on the Central American Market for Plastics and its Manufactures, compiled by the Business Intelligence Unit at CentralAmericaData: [GRAFICA caption = "Click to interact with the graph"]
They argue that joining the bloc offers growth potential for commercial partners who to date represent only 4% of total exports.
Enrique Egloff, president of the Chamber of Industries of Costa Rica provided support for this with figures which show that in 2015 Costa Rica's exports to the countries in the Pacific Alliance totaled $377 million and imports $1.786 billion.
In the South American country a rule has been published that establishes that costs and expenses incurred during transportation of goods by air must be borne by the importers.
From a statement issued by the Foreign Trade Promotion Office of Costa Rica (PROCOMER):
On October 11, the Ministry of Transport and Communications (MTC) of Peru issued a rule that the costs and expenses incurred during transportation of goods by air will be borne by the importers.
To date the Trade Pillar Committee has not yet been formed with representatives of each of the Central American countries, despite the entry into force of the Association Agreement on January 1st 2014.
Central America has not managed to harmonize and standardize regional interests in order to make use of the Agreement with the European Union. Nearly six months after its entry into force, they have not institutionalized mechanisms to comply with even short term commitments related to regional trade, such as the harmonization of trade regulations, customs administration and trade policy. This failure has consequences.
The Department of Agriculture of the United States has authorized the entry of pineapples and other fresh fruits from Malaysia.
Costa Rica will have to face competition from pineapples exported from Malaysia to the U.S. market. Although initially it is expected that there will be a low volume in the market, affects could be felt in the medium and long term.