Costa Rica, El Salvador, Honduras, Nicaragua, Panama and Korea signed the Free Trade Agreement between the Republic of Korea and Central America on February 21, 2018. The Legislative Assembly of Costa Rica approved the free trade agreement on September 4, 2019. Under the free trade agreement, 80% of Costa Rican products will enter the Korean market duty-free, 16% of Costa Rican products will be subject to a gradual tariff reduction and 4% will be excluded from the free trade agreement. The agreement will open up new opportunities for Costa Rican exports and become a tool to attract foreign direct investment. Note: ustr.gov/trade-agreements/free-trade-agreements/cafta-dr-dominican-republic-central-america-fta and www.trade.gov/free-trade-agreements. CARICOM – Among Costa Rica`s free trade agreements that govern relations between Costa Rica and a group of countries is the free trade agreement with CARICOM. CARICOM consists of four countries (Trinidad and Tobago, Barbados, Belize and Guyana). The agreement was signed in 2005. Chile – Total merchandise trade between Chile and Costa Rica has grown at an annual rate of 10.4% since the entry into force of the free trade agreement between the two countries in 2003. Between 1996 and 2001, trade between Chile and Costa Rica grew much more slowly (3 per cent) per year. In the period following the free trade agreement, Costa Rica`s exports to its South American trading partner grew by 13 percent year-on-year, while imports grew at an annual rate of 10 percent.
Describes the trade agreements in which this country is involved. Provides resources for U.S. companies to obtain information on the use of these agreements. The CAFTA-DR trade supports Made-in-America jobs and opens up opportunities for well-paying work as goods cross borders and are transformed into finished products. If we work together, our region can be more competitive. European Union – The EU is one of Costa Rica`s most important trading partners. The two companies entered into a free trade relationship in 2013. Since then, total merchandise trade between Costa Rica and the European Union has increased by only 0.5%.
This stability in trade relations between Costa Rica and the EU can be explained by the stagnation of the EU economy. Costa Rica was the first country in Central America to confirm a case of COVID-19 on March 6, 2020. In the spring and early summer, Costa Rica was one of the most successful Latin American countries in the fight against the pandemic. With early, fast and strict restrictions on social and economic interactions; a comprehensive testing program; and a strong health care system, the number of cases and deaths was under control. However, during a gradual reopening of the economy, there was a significant increase in cases in August and September. Mexico – Mexico was the first among Costa Rica`s free trade agreements. The pact with its northern neighbour entered into force in 1995. Since then, total trade between the two partners has grown at an average annual rate of 9.5%. Looking at each of the components of trading, the figures show that on average, trading grew by 13.1% in relative terms. Peru – The agreement with this South American country is the second of Costa Rica`s free trade agreements that entered into force in 2013. Since then, the average growth in total trade between the two countries has been 8.1% per year.
After the signing of the free trade agreement with Peru, Costa Rican exports to the country increased by 9.1%, while imports increased at a total annual rate of 11.1%. It is estimated that prior to the COVID-19 pandemic, approximately 120,000 U.S. citizens, including many retirees, lived in the country; More than 1.4 million U.S. citizens visit Costa Rica each year. Each year, more than 1,100 Costa Ricans study at U.S. colleges. More than 8,000 U.S. students study in Costa Rica each year, and Costa Rica is the top destination in Latin America for study abroad programs in the United States. Costa Rica`s borders were closed to non-Costa Rican citizens or residents in March 2020. As of September 2020, the country had again allowed travel from just 20 U.S. states.
Singapore – Total merchandise trade with Singapore has declined by an average of 12% per year since the signing of the free trade agreement with the Asian country in 2013. While imports of singapore`s products via Costa Rica grew at a rate of 1.2%, Costa Rican exports to Singapore decreased by 25.7% per year between 2013 and 2016. On September 4, 2019, Costa Rica approved the Free Trade Agreement (FTA) between Central America and Korea. The free trade agreement will enter into force on that date. Central America and the United Kingdom signed an Association Agreement on 18 July 2019, which guarantees the continuity of trade relations between the two. The Dominican Republic-Central America Free Trade Agreement (CAFTA-DR) is the first free trade agreement between the United States and a group of small developing countries: our Central American neighbors, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic. CaFTA-DR promotes stronger trade and investment relations, prosperity and stability throughout the region and along our southern border. THE DCFTA-DR also includes key disciplines related to customs administration and trade facilitation, technical barriers to trade, government procurement, investment, telecommunications, e-commerce, intellectual property rights, transparency, occupational safety and environmental protection.
The DCFTA-DR strengthens the rights and conditions of workers in the region by upholding the occupational health and safety to which workers are entitled under the countries` national laws. This includes the first industrial action under a free trade agreement to ensure that Guatemalan workers can exercise their rights under Guatemalan law. We remain committed to helping Guatemala achieve this result and reaping the benefits of law enforcement to uphold internationally recognized labour rights. United States – The agreement between the United States and Costa Rica has been one of the most publicly discussed free trade agreements in Costa Rica. Total merchandise trade between Costa Rica and the United States has grown at an average annual rate of 4.3% since the free zone came into effect in 2019. Costa Rica`s exports grew at an annual rate of 5.2%, from $2.9 billion in 2009 to $4.2 billion in 2016. Over the same period, imports from the United States also increased, from $4.7 billion to $6.1 billion. The United States as a destination for Costa Rican exports increased from 34% of Costa Rica`s overseas sales in 2009 to 40% in 2016. Costa Rica, Latin America`s oldest uninterrupted democracy, celebrated the bicentenary of its independence in 2021.
In recent years, Costa Rica has experienced moderate economic growth (2.1% in 2019), although the impact of the global COVID-19 pandemic has affected economic growth and the World Bank has reported a CONTRACTION in GDP of 4.5% in 2020. A moderate recovery is expected in 2021. The country`s relatively well-educated workforce, emphasis on English language teaching, relatively low corruption, geographical proximity to the United States, and attractive incentives for the free trade area offer strong appeal to many exporters and investors. In recent decades, the government of Costa Rica has focused on attracting investment from high-tech manufacturers such as electronics and medical devices, as well as the continued development of the dynamic tourism sector. .