QCOSTARICA — Costa Rica began talks to sign a Free Trade Agreement with the Northern Block composed of Mexico, the United States and Canada.
Greater legal security, more investment and cooperation would be the results of belonging to the North American Free Trade Agreement (NAFTA) or the Tratado de Libre Comercio de América del Norte (TLCAN) in Spanish, according to Costa Rica’s business sector.
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NAFTA, one of the largest trade blocs in the world by gross domestic product, has been in force since 1994, but later renamed United States–Mexico–Canada Agreement (USMCA) – Tratado entre México, Estados Unidos y Canadá (T-MEC), in Spanish, effective as of July 1, 2020.
Medical devices, semiconductors, aerospace and other goods and services will be the products that would increase the potential of those markets with which Costa Rica already has bilateral treaties.
An agreement of this type would be complementary to the Dominican Republic–Central America Free Trade Agreement (CAFTA-DR) – Tratado de Libre Comercio entre Estados Unidos, Centroamérica y República Dominicana, in Spanish, which would be complemented by this new negotiation, affirms the private sector.
And CAFTA-DR is already too small to enhance the possibilities that the Costa Rican industry has.
“CAFTA-DR jacket is a little tight for us and we need one that fits us better, that fits us better,” said Manuel Tovar, Minister of Foreign Trade.
CAFTA-DR include topics from market access to the environment and came to modernize the relationship with the United States in areas such as intellectual property, insurance and telecommunications, while establishing mechanisms to guarantee the effective application of labor legislation and environmental.
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Opening to a new negotiation would imply reviewing technical standards and establishing new tariff reduction deadlines that had not been taken into account and adding trade in services and investment and administrative issues regarding dispute settlement.
However, the business sector insists on the need to improve the investment climate and for that, the modernization of the port of Caldera, which is the main gateway to Asia, and Ruta 32 and Ruta 27 are an imperative, as well as the termination of Ruta 1 to the north.
“Costa Rica faces a challenge not only with the United States, Mexico and Canada, but with all its trading partners in terms of improving its logistics infrastructure to further take advantage of foreign trade and investment flows derived from the regional trade agreements signed. That is key if you want to reach other partners such as Japan, Turkey, India, Brazil, Malaysia, Thailand, Indonesia,” said Katherine Chaves, executive director of the Chamber of Foreign Trade (Crecex).
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