Friday, March 24, 2023

Costa Rica and Ecuador sign a free trade agreement

Costa Rica and Ecuador signed a Trade Association Agreement this Wednesday that covers more than 90% of the products and that both countries consider a historic milestone for the bilateral relationship.

The agreement was signed in San José by the President of Costa Rica, Rodrigo Chaves, and the President of Ecuador, Guillermo Lasso, who were accompanied by their Ministers of Foreign Trade.

After the signing this Wednesday, the pact, which includes 97% of Ecuadorian products and more than 90% of Costa Rican products in free trade, must be approved by the Legislative Branch of each country for it to enter into force.

Lasso said at the official signing ceremony that it is a “state-of-the-art agreement” that, in addition to trade, covers issues of investment, labor rights, human rights, gender, sanitary and phytosanitary measures, and the environment.

“This agreement opens the doors to vigorous and deep commercial exchange. With this signature we demonstrate our faith in Latin American integration and unity,” said the Ecuadorian president, who described the treaty as “historic.”

Lasso commented that it is also a “first step” to strengthen relations between South America and Central America and stressed that Costa Rica and Ecuador are “complementary economies that seek to integrate into global trade and value chains.”

For his part, Chaves stressed that these countries are “neighbors and brothers”, with shared values ​​such as democracy.

“This is a very important step in building trade relations and is part of a broader effort by Costa Rica to strengthen regional integration in Latin America,” Chaves commented.

The Minister of Production, Foreign Trade, Investment and Fisheries of Ecuador, Julio Prado, highlighted that the agreement opens opportunities for the manufacturing, textile, electrical appliance, steel and metal-mechanic sectors of Ecuador, while for Costa Rica the medical device, medicines , manufacturing and agricultural sectors.

Dairy products, bananas, pineapples and other fruits were excluded from the treaty, by mutual agreement.

On December 19, Costa Rica and Ecuador successfully concluded negotiations for a free trade agreement, a process that began last August and required four rounds of talks.

The Trade Association Agreement between Costa Rica and Ecuador also incorporates provisions related to gender equity, good regulatory practices, and strengthening of micro, small, and medium-sized enterprises.

This will be Costa Rica’s fourth free trade agreement with a South American nation, since it already has agreements with Colombia, Peru and Chile.

Official data indicated that the commercial exchange between Costa Rica and Ecuador in 2021 reached US$74.6 million, of which US$49.8 million correspond to Costa Rican exports and US$24.8 million to Ecuadorian exports.

At present, the main export products from Costa Rica to Ecuador are scrap metal, medicines, electronic materials, tires, cardboard and another series of industrial materials.

For its part, Ecuador sells to Costa Rica mainly prepared and preserved fish, fresh fish, steel wire, medicines, textiles and shrimp, among others.


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