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.
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).
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%.
Following what began as a blockade by Panama on the entry of animal products from Costa Rica, a formal proposal has been made to apply an import tariff to Costa Rican dairy products marketed in the Panamanian market.
In July of this year, 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 the export authorization to a list of Costa Rican establishments previously authorized and that have been trading in the Panamanian market for many years.
In response to the restrictions applied to Costa Rican pilots, who are prevented from leaving with cargo from Panama, since July 14 Costa Rica has not allowed trucks with Panamanian plates to leave carrying goods.
Because of the spread of covid-19, Costa Rica was the first country to impose restrictions on cargo transport units from other countries in the region. Faced with this decision taken unilaterally, governments applied reciprocal measures.
In 2019, exports of goods are estimated to total nearly $11.526 million, barely 2% higher than reported in the previous year, and far from the 6% increase recorded in 2018.
According to estimates by the Ministry of Foreign Trade, foreign sales of services registered greater dynamism last year, since between 2018 and 2019, they went from Ch$9,090 million to Ch$9,565 million, equivalent to a 5% increase.
The cultivation, processing and export of coconut and its derivatives, and the transformation of goat activity focused on the manufacture of personal care and health products, are some of the proposals for Costa Rican agriculture to generate greater added value.
A study conducted by FUNDES Strategy identifies new opportunities for Costa Rica's agricultural sector.
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.
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.
The US government's decision to set a 10% tariff on aluminum imports could have little impact on Central America, which in 2016 exported to the US $25 million worth of this metal.
The possible "trade war" that some US trade partners have warned about and which could be realised with the measure taken by the Trump administration, will be viewed from a distance in Central America.
With the implementation of the VUCE 2.0 system, approvals of import permits managed by companies in the food, medical, chemical and pharmaceutical sectors in Costa Rica are set to be accelerated.
From a statement issued by PROCOMER:
San José, December 7, 2017.Companies in the food, medical, chemical and pharmaceutical sectors that operate in Costa Rica will have greater ease in acquiring their raw materials and finished products, now that the VUCE 2.0 system will implement a 24/7 approval system for importpermits (technical notes) for those sectors.
In the last ten years, exports from Costa Rica to countries in the European Union grew from $840 million in 2007, to $1.678 billion in the third quarter of this year.
Medical devices, bananas, pineapples, and coffee are some of the products responsible for most of the growth in exports to European countries in recent years. For example, as of September of this year, Procomer figures indicate that "... the European Continent represented 22% of sales this third quarter, with a total of US $1.753 billion (+ US $146 million). Among the main drivers, were: banana, with exports to Belgium, the United Kingdom and Ukraine; medical devices, which boosted exports to Belgium and the Netherlands; as well as greater exports of pineapples to Portugal and coffee to the Netherlands." See "Costa Rica: Foreign trade figures as of September 2017"
Building the new airport in Orotina, expanding the route to Puerto Caldera, building the San José-San Ramón highway and simplifying procedures for doing business are some of things that China requires before setting up a Special Economic Zone in the country.
The study to determine the country's feasibility to host a special Chinese economic zone was suggested by the Chinchilla administration in 2014, but its results have only now become available, due to, according to former Costa Rican ambassador to China, Marco Vinicio Ruiz, bad management on the part of the current administration.
In Costa Rica since the government suspended imports of Mexican avocados in May 2014, the average wholesale price of the fruit went up by 19% in 2015 and 16% last year.
Since the country stopped the imports of mexican avocados because of the alleged presence of the sunblotch plague, the price of this fruit in the local market has kept on rising.Although avocados are now imported from seven different countries, total imports have fallen 25% since then, and the average price has recorded since then an annual increase of 18%.
Dairy products and some metalworking products, plastics, tires and wood were excluded from the trade agreement between Central America and China.
Bananas will not incur tariffs when entering South Korea for five years, pineapples for a period of seven years and pork for ten years.In addition to the terms of tariff reduction, the countries in the region unilaterally negotiated the exclusion of some goods produced locally.Guatemala announced that it will continue negotiations unilaterally.
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