Costa Rican Trade Policy
For over 20 years, Costa Rica has built a solid platform for foreign trade, which has served as a tool for the country’s competitiveness.This platform includes, in addition to the agreements of the World Trade Organization (WTO) and the Central American Integration, thirteen Free Trade Agreements (FTA). These agreements cover about 80% of the country's international trade.
The nations with which Costa Rica has trade agreements, and therefore tariff preferences for exports, account for 66.6% of the Gross Domestic Product (GDP) of the world and 35.5% of the world population.
Free Trade Agreements
All of the following free trade agreements described below are in force.
Central American FTA
The General Agreement of Central American Economic Integration came into force on June 4, 1961 for Guatemala, El Salvador and Nicaragua,on April 27, 1962 for Honduras, and on September 23, 1963 for Costa Rica.
The 1990s represented a transformation phasefor the process of Central American integration, with-the execution–on December 13, 1991--of the Protocol to the Agreement of Central American Economic Integration (Tegucigalpa Protocol) by the states of Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, and Panama. This instrument, which took effect on February 10, 1993, provides the legal framework and establishes an institutional structurefor the Central American Integration System (SICA).
Canada FTA
The Free Trade Agreement between the Government of the Republic of Costa Rica and the Government of Canada came into force on November 7, 2002.
This was the first trade agreement signed with a developed country, promoting increased trade and investment flows under terms of predictability, safety, and transparency. Additionally, it incorporates, for the first time, environmental and labor provisions by signing parallel cooperation agreements.
CARICOM FTA
The Free Trade Agreement between the Government of the Republic of Costa Rica and the Caribbean Community (CARICOM) came into force on November 15, 2005.
The Agreement was signed by CARICOM on behalf of the Governments of Antigua and Barbuda, Barbados, Belize, Dominica, Granada, Guyana, Jamaica, St. Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Suriname, and Trinidad and Tobago.
Chile FTA
The Free Trade Agreement between Central America and Chile,and the Annexed Bilateral Protocol signed by the Republic of Costa Rica and the Republic of Chile came into force on February 15, 2002.
The general framework of this Agreement was negotiated by Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Chile. Later, each country has negotiated a Bilateral Protocol to establish the specific conditions to access the markets. The application of this Agreement is bilateral between each Central American country and Chile.
China FTA
The Free Trade Agreement between the Government of the Republic of Costa Rica and the Government of the People's Republic of China came into force on August 1, 2011.
In June 2007, Costa Rica established diplomatic relations with the People’s Republic of China. This milestone date marks the beginning of political rapprochement with this Asian nation and a process for strengthening commercial relations between the two countries.
CAFTA-DR
The Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR) came into force on January 1, 2009.
This agreement regulates trade and investment relations among Central America, the United States and Dominican Republic. In the case of Costa Rica, it is one of the main instruments of its trade policy because it regulates trade with the main trading partner of the country: the United States.
This agreement allowed to modernize Costa Rican laws related to intellectual property, insurance, telecommunications, and distribution agreements; and to provide mechanisms to ensure the effective implementation of labor and environmental laws.
Mexico FTA
The Free Trade Agreement among the United Mexican States and the Republics of Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua came into force on July 1, 2013.
Costa Rica and Mexico had a Free Trade Agreement since 1995. Under the framework of the Tuxtla Mechanism for Dialogue and Coordination, the Presidents of Central America and Mexico agreed to promote the merging of several agreements that were in force between Central America and Mexico in order to adjust them to the modernrules and productive realities in Central America, which have evolved over the last fifteen years. Next, the free trade agreement convergence process began, which resulted in the Free Trade Agreement between Central America and Mexico, which is currently in force in the country.
Panama FTA
The Free Trade Agreement between Central America and Panama, and the Costa Rica-Panama Bilateral Protocol to the Free Trade Agreement came into force on November 24, 2008, and Annex 3.04 of the Tariff Reduction Program came into force on January 1, 2009.
With this agreement, Costa Rica strengthens its foreign trade platform by establishing enhanced trade links with one of its natural partners, not only for the geographical proximity but also for the complementarity of their economies, which greatly favortrade between the two countries.
Dominican Republic FTA
The Free Trade Agreement between Central America and Dominican Republic came into force on March 7, 2002.Signing this agreement is part of the strategy for the country’s trade integration.
Dominican Republic is the main trade partner of Costa Rica in the Caribbean. This country, with a population of about 10 million and receiving a lot of tourism, offers many trade opportunities to the Costa Rican export sector, which can be exploited through the preferences negotiated under Free Trade Agreement.
Peru FTA
The Free Trade Agreement between the Government of the Republic of Costa Rica and the Government of the Republic of Peru came into force on June 1, 2013.
The negotiation of this agreement expands the foreign trade platform that Costa Rica offers to domestic and foreign investors, providing them with the opportunity to invest and produce in the country, with the benefit of the conditions of entering the Peruvian market. Additionally, it establishes a legal framework for clear, stable and transparent rules to regulate commerce, and the mechanisms to avoid the application of discretionary measures that unreasonably affect trade. It also increases and diversifies Costa Rican exportable supply of goods and services under preferential terms, expands consumer options to purchase goods and services, and provides effective and transparent procedures for dispute resolution.
Singapore FTA
The Free Trade Agreement between the Republic of Costa Rica and the Republic of Singapore came into force on July 1, 2013.
Singapore is an economy that offers a wide range of opportunities for Costa Rica. It has one of the highest GDP per capita in the world, higher than $62,000, as estimated for 2013. Additionally, its small geographical size (about 720 km2),its population density--equivalent to that of Costa Rica--and its high consumption levelsmake this country an economy dependent on imports of products, which the Costa Rican production can meet.
AACUE
The Agreement establishing an Association between the European Union and its Member States, on one hand, and Central America, on the other(AACUE),came into force for Costa Rica on October 1, 2013.
The AACUE regulates the relations between Central America and the European Union (EU) in three areas: political dialogue, cooperation, and the creation of a free trade area between the European Union and the Central American countries.
The trade pillar of the Agreement has the particular trait that it can be applied from region to region, which strengthens the process of economic integration of the Central American countries, promotes trade relations among regions, and allows positioning Central America as a key destination for direct foreign investment from the European continent.
EFTA
The Free Trade Agreement among the European Free Trade Association - EFTA (Switzerland, Iceland, Liechtenstein and Norway), Costa Rica and Panama came into force on August 19, 2014 with Norway, on August 29, 2014 with Switzerland and Liechtenstein, and on September 5, 2014 with Iceland.
As provided under this agreement, 98.7% of Costa Rican exports to enter this block will be duty-free. Products like bananas, fresh fruit, flowers and foliage, vegetables, tubers, coffee and all industrial products will benefit from this preferential access. On the other hand, 93.3% of exports from EFTA States to Costa Rica will benefit from immediate tariff elimination.