Costa Rica and the Trans-Pacific Agreement: A Strategic Step Toward Global Economic Integration

Costa Rica is one step closer to fully joining one of the world’s most robust and far-reaching trade agreements: the Trans-Pacific Agreement or TPP (in its original format). After a series of recent talks and technical negotiations with member countries of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Costa Rica and the Trans-Pacific Agreement, or TPP, are now on the threshold of accession. The latest round of meetings in Tokyo from October 6-10 left participating experts with no significant disagreements; in their opinion, it was “substantial progress.”

“Final preparations for Costa Rica’s accession to the CPTPP are on track to be concluded by the end of this month, and we expect the decision on accession to be taken at the bloc’s ministerial meeting in Melbourne, Australia, on November 27-29,” the Ministry of Foreign Trade (COMEX) noted.

Expanding Access to Pacific Markets

The CPTPP is considered one of the most progressive trade blocs in terms of opening up markets for participating countries. Formed in 2018 by 11 members across the Asia-Pacific region, its members include: Japan, Canada, Mexico, Australia, New Zealand, Singapore, Vietnam, Malaysia, Brunei, Chile, and Peru. The countries account for about 15% of global GDP and a market of 600 million people. For Central America, the CPTPP is both an opportunity and a logical next step for economic diplomacy.

As Costa Rica already has free trade agreements with the US (CAFTA-DR) and the European Union, the country now aims to diversify internationally through access to fast-growing markets in Asia and Oceania. For the last 20 years, Costa Rica has transformed itself into a knowledge-based economy specializing in medical devices, technology, electronics, and agricultural exports to the US and the EU.

By joining the CPTPP, Costa Rica can get preferential access to several of the globe’s fastest-growing markets and expand exports beyond its traditional destinations. This diversification will open up new growth opportunities and strengthen its position as a regional trade hub in Latin America.

Significant Benefits of CPTPP Membership

The country stands to benefit from Trans-Pacific Agreement membership on several accounts:

• New market access to export tariff-free coffee, sugar, pineapple, medical equipment, and high-end manufactured goods.
• Stronger competitiveness and efficiency for domestic industries, resulting from lower tariffs and streamlined non-tariff barriers.
• Enhanced regional and global value chain integration for Costa Rican companies in the technology, automotive, and electronics sectors.
• Increased foreign direct investment (FDI) and new sources of investment financing due to the positioning of Costa Rica as an active member of a stable and rules-based trade bloc in the Americas.

It is also worth highlighting that the CPTPP was designed to support high environmental and labor standards. As Costa Rica is already a global leader in sustainability and green technology, it can leverage CPTPP membership to attract investment in those areas.

The country’s economic and trade policies have long focused on expanding Costa Rica’s global footprint and leveraging its open market, high labor and environmental standards, political stability, and rule of law for attracting FDI from new sources.

Costa Rica in the WTO and Beyond

As a WTO member since 1995, Costa Rica actively engages in multilateral trade diplomacy with major partners, including China, Japan, and Europe. Accession to the CPTPP also signals the country’s commitment to deepening economic partnerships in the Asia-Pacific region. For Costa Rica and the Trans-Pacific Agreement, TPP is a chance to make the country a bridge between the two oceans and show the importance of trade partnerships for regional prosperity.

Costa Rican authorities have already stated that membership will create new opportunities for small- and medium-sized businesses to export more goods and services, participate in international public procurement tenders, and form joint ventures with companies from CPTPP member countries. Also, by joining the bloc, Costa Rica can add value to its FDI proposition through high standards for political and economic stability, respected rule of law, and a strong and efficient business environment.

Geopolitics and the Role of Costa Rica in the Trans-Pacific Agreement

In a world of shifting geopolitical alignments, where global supply chain realignment and nearshoring are redefining trade patterns and interdependence, Costa Rica and the Trans-Pacific Agreement are gaining a new strategic importance.

For member states, diversification of supply sources is a critical resilience and risk mitigation strategy, reducing dependence on any single partner. For Costa Rica, the CPTPP provides an opportunity to tap into diverse sources of capital, technology, and markets to upgrade its industrial and export base, strengthen its regional competitiveness, and maintain policy autonomy. The free trade agreement could also play a critical role in cushioning Costa Rica against external risks, especially from global economic volatility and vulnerabilities associated with climate change, rising inflation, and supply chain disruptions.

Institutional Changes in Costa Rica

In addition to political coordination between Costa Rica and the other CPTPP members, the potential new members must also carry out a comprehensive review of their current domestic legislation and bring it into line with the norms and rules of the free trade agreement. This includes opening up public procurement, protection of intellectual property rights, state ownership regulations, and labor and environmental standards.

These updates, according to Costa Rica’s Ministry of Foreign Trade, are not only part of the requirements for joining the CPTPP. Domestic reforms in these and other areas of the economy make sense from a business environment point of view. In particular, they should improve transparency, trust, and confidence for foreign investors and open up new opportunities for Costa Rican companies in international trade.

Final Stages of Accession

After a successful conclusion of the current round of negotiations on technical details in Tokyo and the completion of a set of new legal and institutional reforms by the end of November, Costa Rica is expected to receive a green light for accession from CPTPP members.

Costa Rica and the Trans-Pacific Agreement become mutually beneficial partners, making Costa Rica a more dynamic and competitive economy. In 2025, it could be one of the most important transformations for the country in recent history of economic integration.