Entrepreneurs in the agricultural sector in Costa Rica are maintaining their position against an eventual incorporation into the commercial block made up of Mexico, Colombia, Peru and Chile.
Although it is not yet a priority on the agenda, the Ministry of Foreign Trade plans to initiate a consultation process with all the sectors involved, to analyze the positive and negative aspects of an eventual accession to the Pacific Alliance (AP), and in what way the process should be carried out.
Discussion forums, advertising and meetings with businesses are part of the efforts that the Business Council of the Pacific Alliance intends to do in Costa Rica.
Arguing that lack of information about the benefits of an eventual accession to the trade bloc is the main reason behind the opposition of some companies, members of the Business Council of the Pacific Alliance (CEAP) announced a plan to promote more, and in a better way, the consequences of joining the Alliance.
The agricultural union is upholding its position against entering the block and has unlinked itself from the group consisting of other business chambers which is lobbying for accession.
Crhoy.com reports that "... 'The agricultural sector grouped in the National Agricultural Alliance (ANA) sent a letter to President Luis Guillermo Solís in which it expressed opposition to the entry of Costa Rica into the Pacific Alliance. "
While President Solis prepares to attend the summit in Chile without having a definite position, nine private unions have formed a Business Council to promote adhesion to the trade bloc.
The Chamber of Industries of Costa Rica explains that"... this mechanism of coordination of efforts between private sector entities will promote the Pacific Alliance within the business community and maintain an open and continuous dialogue with the Government and with political organizations and representatives of civil society, in order to present and submit recommendations and suggestions for the proper conduct of the process of integration and economic and trade cooperation between Costa Rica and the other countries who are members of the Pacific Alliance. "
After two years of government, the Solis administration remains indecisive and has still not resolved this vital issue, which even though it is opposed by several productive sectors of the country, needs urgent resolution.
The country's entry into the commercial alliance composed of Chile, Colombia, Mexico and Peru would represent a very significant change for the economy of Costa Rica, a change that sectors producing goods and services would have to integrate into their strategic plans, which is why they need clear signals regarding the direction to be taken.
The vagueness of the Solis administration regarding the integration of Costa Rica into the Pacific Alliance has provoked negative reactions from business associations.
EDITORIAL
The country's entry into the Commercial alliance composed of Chile, Colombia, Mexico and Peru would represent a very important change for the economy of Costa Rica, a change that sectors producing goods and services would have to integrate into their strategic plans, which is why they need clear signals regarding what will happen.
Lower utility rates, a change in the exchange rate policy and starting the process to join the Pacific Alliance are in the view of the union the most urgent challenges facing the Solis administration.
From a statement issued by the Chamber of Industries of Costa Rica:h
The ICRC highlighted five challenges and 5 successes of the Solis Rivera administration in its first two years.
The National Rice Corporation states that adhering to the regional initiative blights what has been achieved in bilateral agreements with each country in the Alliance.
The Costa Rican agro industry has closed ranks against the country's accession to the Pacific Alliance. Both producers and the minister himself, Luis Felipe Arauz, have stated that the agreement is unfavorable for products such as rice, coffee, swine, beef cattle, ornamental flowers and strawberry growers.
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.
The government is waiting for more technical studies and analyzing the effects it would have on local production if entry of goods and services from Chile, Peru, Mexico and Colombia were fully liberalized .
Although the previous Chinchilla administration had taken firm steps to join the trade bloc, the current President Solis, has cooled down the process, which in order to continue must wait for the Ministry of Foreign Trade to complete further studies on commercial sensitivity, and later present them for public consultation.
While the government makes further assessments over joining the bloc, the agribusiness sectors is emphasizing the negative consequences of any renegotiation over tariffs.
Representatives from the agricultural sector argue that the country's entry into the Pacific Alliance will mean "... losing some of the conditions achieved in existing free trade agreements." Currently "...
Within the Economic Council of Government Luis Guillermo Solís' ministers are divided with some favoring openness to international trade, and others wanting to protect vulnerable sectors.
The Ministry of Foreign Trade, which is in favor of accession, argues that there are free trade agreements with member countries of the Alliance, meaning that they would only be strengthening commercial ties.
The Costa Rican Chamber of the Food Industry states that it would be unacceptable to change the treatment given to the products in existing bilateral treaties.
From a statement issued by the Costa Rican Chamber of Food Industries (CACIA):
Country should not rush to deprotection of product by joining the Pacific Alliance
- CACIA participating this week in sectoral meetings convened by the Ministry of Foreign Trade, in order to assess conditions applicable to Costa Rica in this group.
With opposition from agro-industry, the government has initiated the processes required to join the trade bloc, including a consultation period, which runs until the end of the year.
Entry into the block requires a greater commercial opening than that established in free trade treaties negotiated between Costa Rica and member countries, Mexico, Colombia, Peru and Chile, which is why productive sectors such as agriculture and industry oppose it.
In late June the government will review conditions for possible entry to the trading bloc with enterprises from the national productive sector.
In order to clear up any doubts and hear the views of the national productive sector, the Ministry of Foreign Trade will launch a formal consultation on the process of accession to the trade bloc with business associations in the country, especially those in the agricultural and industrial sectors, who have already expressed their concerns on the subject.