As a result of the blockade that has been in place since July 2020 on the entry of animal products from Costa Rica into the Panamanian market, Costa Rican exports to Panama are reported to have fallen and companies such as Dos Pinos are reporting losses in the millions.
The trade conflict began when Panama informed the National Animal Health Service (SENASA), an agency of Costa Rica's 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.
Despite the recent announcement by a Costa Rican company about the future of the operation of the Cargo ferry between El Salvador and Costa Rica, as planned, the service is still not operating and may never do so.
The option of maritime cargo transport emerged again with the objective of minimizing part of the impact that the Nicaraguan crisis has had on intraregional trade. That is why in July the governments of Costa Rica and El Salvador announced that they were already able to begin ferrying operations. See "Cargo Ferry Between La Union and Caldera Back on the Table"
The complex economic and political situation that has affected Nicaragua since April continues to affect Central America, where exporters report losses of $45 million.
In the past months, cargo transport faced difficulties in moving goods along Nicaragua's highways due to demonstrators' blockades and insecurity, seriously affecting Central American companies.
Entrepreneurs from Costa Rica are paying attention to what is happening in its neighboring country, where 90% of Costa Rican exports to Central America are transported by land.
In a statement, the union of exporters noted that "... As representatives of the export sector, we are concerned about the transit of goods to the rest of the Central American region, which receives more than $2.3 billion in Costa Rican products.This considering that more than 90% of exports to Central America are made by land and that Nicaragua, as well as being a destination for our exports, is also our gateway to Guatemala, Honduras and El Salvador".
Lack of electricity and logistics and storage problems at Floridian ports are complicating exports from Central America, especially for perishable goods.
Difficulties faced at ports in Florida and Puerto Rico are affecting the region's exporters, who are looking for alternatives so that their shipments are not affected.
In Costa Rica the exporter's union has stated that complying with the new regulations of weighing containers will raise costs and affect their already deteriorating competitiveness.
The new rules for certifying the weight of maritime cargo to be adhered to under the SOLAS convention will come into effect on July 1, 2016, and Costa Rican exporters are already raising their voices to denounce the impact it will have on their cost structure.
Opportunities in the Arab country have been announced for chutneys, organic coffee, pastries, organic tuna, dried fruits, plants, flowers and foliage.
The Foreign Trade Promotion Office (PROCOMER) has opened a trade promotion office in Qatar. Alvaro Stone, director of Exports at the office, informed Nacion.com that an official has been based in the premises of the Embassy of Costa Rica in that country since late last year.
Although many still doubt that the mega project will actually be built, it's time to think and take action both to mitigate the adverse effects it may have on the Costa Rican economy and to take advantage of any business opportunities that may present.
EDITORIAL
The productive sectors in Costa Rica are starting to measure the positive and negative consequences of both the construction and future operation of the Grand Canal of Nicaragua.
The difficulties and obstacles highlighted by exporters in intraregional trade reveal the serious shortcomings of the much vaunted concept of Central American Integration.
Chambers representing exporters in Central American countries believe that instead of moving towards the integration of the region, the slow progress of the customs union and the high costs of transport is retracting from it.
In contrast to what should be a regional customs union, every Central American border post charges vastly different rates and taxes.
"We believe that we could even stage regional custom blockades," said the Nicaraguan Marvin Altamirano, president of the American Federation of Chambers of Transportation (Fecatrans).
Central Freight carriers will meet next August to define the measures to be taken against the different fees imposed by various countries in the region.
Costa Rican exporters view positively the inclusion of new products to the FTA with Mexico, with the possibility of establishing regional production chains.
Some of the products that will be incorporated into the trade agreement are sugar, iron and steel sheets, gelatin powder, cigarettes, chicken sausages, jellies and fruit pastes. In addition, also agreed was trade in raw materials such as yogurt and powdered sour cream and hydrolyzed vegetable protein.
Honduras and Nicaragua will be the first countries to export to the European market under the preferential tariff agreed between the two regions.
The agreement will be effective only in these two countries, as the parliaments of the rest of the region have not yet ratified it.
Both nations also will benefit from use of the regional quotas agreed for products such as meat, tuna, rice, sugar, sweet corn, preserved mushrooms, cassava flour, fresh or chilled garlic, among others, which can enter without paying tariffs.
Central American exporters are on alert after the Colombian government decided to increase the protection for domestic footwear and textiles industry.
These measures will apply to imports from those countries Colombia does not have a Free Trade Agreement (FTA) with. In addition, a subsidy will be granted to the coffee sector totalling around $44 million.
The rise in logistics costs has a higher impact on businesses who export fresh produce.
On 1 January an increase came into effect of approximately 10% in the cost of shipping a container with cold storage leaving from Costa Rica.
According to an article in Nacion.com, companies that will be affected by the increase of approximately 10% are those who export fresh produce such as fruits and vegetables.
Costa Rican businesses demand that regional common market be strengthened.
The business owners claim that join together 11 treaties is worthless unless their is a common market to ease the trade of products in the region and with harmonious tariffs, not to mention other needs. They believe that it is crucial for trade in the region to be strengthened, especially now in the face of the global crisis that is afecting other markets such as the United States and Europe.
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