Costa Rican Free Trade Agreements
Costa Rica is a relatively small country that is open to trade in goods and services, as well as foreign investment. By 2016, numerous Costa Rican free trade agreements were in place that govern the country’s commercial relations with a total of forty – nine nations. As a result, eighty percent of Costa Rica’s exports go to countries with which the nation has free trade agreements.
Among
the Costa Rican free trade agreements are commercial pacts with:
Canada – After the free trade
agreement between Costa Rica and Canada was in place, total trade between the
two countries has grown at an average of 7% per year. Costa Rican exports to Canada increased by
9.7%, while imports from Canada grew at a rate of 6.2%.
CARICOM – Among the Costa Rican free trade agreements that govern relations between itself and a group of countries is the FTA with CARICOM. CARICOM is comprised of four nations (Trinidad and Tobago, Barbados, Belize, and Guyana). The agreement was signed in 2005.
Chile – The total goods trade between Chile and Costa Rica has grown at an annual rate of 10.4% since the FTA between the two nations came into effect in 2003. Between the years 1996 – 2001 the trade between Chile and Costa Rica grew at a much slower (3%) rate per annum. During the post-FTA period, Costa Rican exports to its South American trading partner increased by 13% year over year, while imports grew at a 10% annual rate.
China – Total trade in goods with China expanded by 8.1% since 2011. As a destination for Costa Rican exports, trade with China grew by a rate of 12% during the years after which the FTA came into effect. On the other hand, imports from China grew at an average of 10.1%
Dominican Republic – Free trade between Costa Rica and the Dominican Republic was established as the result of the signing of one of the former’s multi-country Costa Rican free trade agreements. As a result of the implementation of free trade relations between Costa Rica and the Dominican Republic, the total trade in goods between the two nations has risen by an average of 10.2% since 2002.
European Union – The EU is one of Costa Rica’s most important trading partners. The two entities entered into a free trade relationship in 2013. Since that time the total trade in goods between Costa Rica and the European Union has grown by only .5%. This stability in the commercial relationship between Costa Rica and the EU can be explained by a stagnation in the economy of the latter.
Mexico – Mexico was the first among Costa Rican free trade agreements. The pact with its northern neighbor came into force in 1995. Since that time,
Peru – The agreement with this South American country is the second of Costa Rican Free trade agreements that came online in 2013. Since that time, the average growth in total trade between the two nations has been 8.1% annually. Following the signing of the FTA with Peru, Costa Rican exports to the country grew at a 9.1% clip, while imports grew at a total annual rate of 11.1%.
Singapore – The total goods trade with Singapore has fallen at an average rate of 12% annually since the free trade accord was signed with this Asian nation in 2013. While imports by Costa Rica of products from Singapore grew at a rate of 1.2%, Costa Rican exports to Singapore declined by a rate of 25.7% a year between 2013 and 2016.
United States – The agreement between the United States and Costa Rica was one of the publicly most discussed of Costa Rican free trade agreements. The total trade in goods between Costa Rica and the US grew at an average annual rate of 4.3% since the FTZ came into effect in 2019. Costa Rican exports grew at an annual rate of 5.2%, increasing from US $2.9 billion in 2009 to US $4.2 billion in 2016. During this same period imports from the United States also increased from US $4.7 billion to US $6.1 billion. The US as a destination for Costa Rican exports rose from 34% of Costa Rica’s overseas sales in 2009 to 40% in 2016.
