Trade policies and practices
Costa Rica’s trade policies are founded on a dedication to open markets and an economic growth strategy driven by exports. Fortunately, Costa Rica imposes minimal trade barriers, allowing for easy entry of goods and services. In fact, the country is consistently reducing tariffs to align with its obligations to its Central American neighbors, the World Trade Organization (WTO), and the tariff reduction schedules outlined in (CAFTA-DR) the Central America-Dominican Republic Free Trade Agreement (ITA, 2023). Costa Rica has a long history of trade regulations and has adopted several trade agreements for international commerce. One of those agreements is the Canada-Costa Rica Free Trade Agreement CCRFTA, which mainly focuses on trade in goods with basic requirements for cross-border trade, financial requirements, and government procurement (Canada, 2022). This shows how Costa Rica’s trade policies and practices contribute to its economic development and growth by diversifying exports and global trends in trade commerce.
Export
Costa Rica’s export policies are crucial in driving the country’s economic growth and advancing international trade. These policies are centered around diversifying exports, which is a foreign trade promotion strategy that promotes non-traditional goods, such as medical instruments for dentistry, orthopedics, cardiology, and technology, instead of relying on the country’s known exports like bananas, coffee, and pineapple (Zúñiga, 2022). Another crucial aspect of Costa Rica’s export policies is intellectual property, which establishes a legal framework that enforces international standards for trademarks, copyrights, and patents (ALPIlaw, 2013). Some of the principal goods and services exported from Costa Rica include medical instruments valued at $4.32 billion, bananas at $1.23 billion, tropical fruits at $1.14 billion, orthopedic appliances at $1.01 billion, and other edible preparations totaling $638 million (OEC, 2021). Most of these exports are shipped to the United States, with a total value of $6.31 billion, followed by the Netherlands, Belgium, Guatemala, and Panama. Over time, Costa Rica’s export portfolio has expanded to include high-value products and services, which has been instrumental in the country’s competitive advantage in global markets.
Import
Importing into Costa Rica has its own restrictive standards that protect the well-being of the country and Costa Ricans. The country regulates and prohibits a few merchandise due to safety standards, health, and environmental protection, which limits the use of non-tariff (World Trade Organization, 2023). This barrier benefits the sector by taking precautions and measures to avoid conflicts with trading; for example, used tires without rims are prohibited due to the risk of mosquitoes carrying yellow or dengue fever breeding in water accumulated in rimless tires (International Trade Administration, 2023). Along with prohibition, some requirements must be met, such as obtaining a permit and receiving approval from the Costa Rican Ministry of Health for importing goods such as cosmetics, pharmaceuticals, vitamin supplements, medical devices, chemicals, toxic substances, insecticides, pesticides, and agricultural chemicals (International Trade Administration, 2023). Costa Rica’s participation in a free trade agreement allows its citizens to import goods such as petroleum and medicines (Statista Research Department, 2023). Additionally, they can import services such as transportation, personal and business travel, royalties and license fees, and other business services (OEC, 2021). This results in a healthy economy for the country and enables businesses to increase their sales successfully.
Interrelationships
Countries in Central America, like Costa Rica, El Salvador, and Nicaragua, are under a free trade agreement; with this agreement, barriers are reduced, and these countries can import and export duty-free (Nicaragua, 2023). The interrelationships of import and export activities in Central America are complex and play a significant role in the economic dynamics of the region. One of the key interrelationships is trade integration, which focuses on reducing trade barriers, simplifying cross-border trade, harmonizing regulations, enhancing trade efficiency, and strengthening economic interdependence (Kenton, 2023). Another key aspect is foreign direct investments, which are made by companies, individuals, and entities with business interests in different countries (OECD, 2023). The interrelationships of import and export activities in Central America are varied and deeply integrated into the region’s economic landscape. Trade agreements, regional integration, and FDI contribute to the complex web of trade interactions among Central American nations. These interactions play a significant role in shaping the economic well-being and development of the region.
