Costa Rica WT/TPR/S/180 
 Page 13 
 
 
II. TRADE AND INVESTMENT REGIME 
(1) OVERVIEW  
1. Costa Rica is an original Member of the WTO, whose agreements take precedence over 
domestic law, with the exception of the Political Constitution.  Costa Rica regards its open-trade 
initiatives at unilateral level, through preferential agreements and within the multilateral context as 
complementary.  Costa Rica has continued to play an  active part in the multilateral trading system.  It 
is participating in the Information Technology Agreement and has adopted the Fifth Protocol on 
financial services.  Costa Rica is playing an activ e role in the Doha Round negotiations, having made 
several offers within this context.  During th e review period, Costa Rica has submitted several 
notifications under various WTO agreements;  however , there are some notifications that are overdue, 
particularly with respect to agriculture. 
2. Costa Rica formulates its trade policy predominan tly at national level, but in so doing it takes 
into consideration the country's participation in the Central American Common Market (CACM).  Its 
foreign trade policy seeks to promote, facilitate and strengthen Costa Rica's inte rnational integration, 
in order to foster the growth of the economy a nd thereby improve the living conditions of Costa 
Ricans.  The Ministry of Foreign Trade (COMEX) defines and manages external trade and foreign 
investment policy.  COMEX coordinates the devel opment of trade policy with various entities, in 
particular through the Advisory Council on Foreign Trade, which is made up, inter alia , of the 
Ministries of Agriculture, Foreign Affairs and the Economy. 
3. Costa Rica also maintains an active prefer ential agreement negotia tion and implementation 
policy.  In addition to participating in the CACM , Costa Rica has entered into free trade agreements 
with Canada, CARICOM, Chile, Mexico and the Domi nican Republic.  Moreover, it has a preferential 
trade agreement in force with Pa nama, with which it has been negotiating a free trade agreement since 
1998.  In 2004, Costa Rica concluded the negotiation of the Free Trade Agreement between the Dominican Republic, Central America and the United States
1, which is awaiting legislative approval 
in Costa Rica.  Moreover, in 2007 Costa Rica wi ll be seeking to initiate the negotiation of an 
association and trade agreement with the European Union. 
4. Costa Rica has an open foreign investment re gime, albeit with some important exceptions.  
The State retains exclusive rights in connection w ith the importation, refining and distribution of 
petroleum and petroleum products;  insurance services;   railways, seaports and airports;  and some 
postal services, and sole concessions in some electricity and telecommunications services.  
Concessions to carry out some of these activities may be granted under the applicable legislation.  
Draft legislation aimed at opening up the telecommuni cations and insurance sectors is currently being 
introduced in the Legislative Assembly. 
(2) GENERAL LEGAL AND INSTITUTIONAL FRAMEWORK  
5. The Republic of Costa Rica is divided into provi nces, cantons and districts.  Government is 
vested in the Executive, the Le gislature and the Judiciary. 
6. Executive power is exercised by the President of  the Republic and government ministers.  The 
President and the two vice-presidents are elected at the same time by a majority of more than 40 per cent of the votes cast.  The presidential term of office is four years.  In 2003 the possibility of 
                                                     
 
1 See http://www.comex.go.cr/acuerdos/comer ciales/CAFTA/textofoliado/default.htm. WT/TPR/S/180 Trade Policy Review 
Page 14 
 
 
re-election was reintroduced2, on condition that the presidential candidate has not served as president 
during the eight years prior to the election period.  The last presidential elections were held in 
February 2006.  The President has exclusive powers to appoint and dismiss government ministers.  
The Executive is authorized to conclude intern ational agreements, public treaties and pacts, 
promulgate them and implement th em once approved by the Legislative Assembly or by a Constituent 
Assembly, if the Constitution so requires.  As a member of the Council of Economic Integration 
Ministers of the Central American Economic Integrat ion Subsystem, Costa Rica's Minister of Foreign 
Trade is empowered to amend tariffs by executive decree. 
7. The Legislative Assembly consists of 57 deputi es who are elected for four years but may not 
be re-elected for a consecutive term.  The last el ections for the Legislative Assembly were held in 
February 2006.  The powers of the Legislative As sembly include:  passing, amending, repealing and 
interpreting laws;  appointing judges to the Suprem e Court of Justice;  setting national taxes and 
authorizing municipal taxes;  and approving inte rnational agreements and public treaties.  The 
Executive is responsible for negotiating and signing  international treaties, including amendments, 
while the Legislature is competent only to approve  or reject international treaties previously 
negotiated by the Executive.  Lower-ranking protocol s deriving from public treaties or international 
agreements approved by the Assembly do not requi re legislative approval when those instruments 
expressly authorize such protocols. 
8. Judicial power is vested in the Supreme Court of  Justice and other courts established by law.  
A special Division of the Supreme Court may rule, by an absolute majority of its members, on 
whether laws of any kind and acts subject to public law are constitutional.  The Supreme Court is also 
responsible for hearing submissions on proposed co nstitutional reforms and proposals for the approval 
of international agreements a nd treaties and other draft laws. 
9. During the review period, there were no changes in the relationship between Costa Rica's 
various legal instruments.  The Constitution takes precedence over all other laws.  Public treaties, 
international agreements and pacts duly approved by  the Legislative Assembly have higher authority 
than laws from the time of their promulgation or the day designated therein.  Public treaties and 
international agreements relating to the country's te rritorial integrity or political structure require 
approval by not less than three quarters of the member s of the Legislative Assembly or two thirds of 
the members of a Constituent Assemb ly.  An example of such an ag reement was the Protocol to the 
General Treaty on Central Amer ican Economic Integration. 
(3) TRADE POLICY OBJECTIVES AND FORMULATION  
10. Costa Rica's foreign trade policy is formulated at national level.  The authorities have noted 
that Costa Rica's trade policy assigns great impor tance to strengthening the multilateral trading 
system, which is regarded as the mainstay of th e country's international economic relations.  In 
addition, the authorities have pointed out that Co sta Rica is promoting initiatives on trade integration 
at regional level, with the other Central American countries;  at bilateral level, with other trading 
partners;  and unilaterally by simplifying its tr ade regime and investment and export promotion 
policies. 
11. COMEX continues to emphasize foreign trade as an  integral part of the country's production 
policy and development policy in general  Within this framework the Minist ry has identified five 
courses of action, namely:  trade negotiations, export promotion, investment promotion, 
administration of trade agreements, and relations with civil society.  At the beginning of 2007 the 
                                                      
2 On 4 April 2003, the Constitutional Chamber repealed a 1969 constitutional reform that prohibited 
the re-election of a president. Costa Rica WT/TPR/S/180 
 Page 15 
 
 
Government announced a new National Development Plan .  This Plan is aimed at achieving growth 
rates of 6 per cent by, among other things, further opening up trade through Free Trade Agreements (FTA) and participa tion in WTO trade negotiations. 
12. As part of the Government's economic gui delines, COMEX's specific objectives can be 
defined as follows:  in relation to trade negotiati ons, to obtain better conditions of access to export 
markets of interest to Costa Rica through trade agreem ents and to make greater  use of the agreements 
in force, including the multilateral trading system.  W ith regard to FTAs, it is working to obtain the 
approval and implementation of vari ous FTAs that have already been  negotiated and to promote new 
initiatives. 
13. Investment policy continues to encourage the establishment of high value-added companies, 
both domestic and foreign, capable of diversifyi ng production and developing new products.  Treaty 
administration continues to monitor compliance with  the obligations under bilateral, regional and 
multilateral treaties, agreements and other trade and investment instruments.  A constant dialogue is 
maintained with the organizations of organized ci vil society in order to explain the advantages of 
foreign trade links for the national development strategy. 
14. COMEX is also coordinating the implementati on of trade policy.  The COMEX law provides 
for the establishment of an Advisory Council on Fo reign Trade to advise on external trade and foreign 
investment and as a forum for dialogue with the representatives of the different economic sectors of society. COMEX coordinates its work w ith the Foreign Trade Promotion Body ( Promotora de 
Comercio Exterior  – PROCOMER), which is responsible for promoting exportables abroad, and with 
the Costa Rican Coalition for Development Initiatives ( Coalición Costarricense de Iniciativas de 
Desarrollo  – CINDE), a private organization whose aim is to foster the conditions  necessary to attract 
domestic and foreign investment and at the same time establish investment programmes. 
15. In 2006, as part of government strategy, work be gan on a draft law for creating a Ministry of 
Production.  The aim is to establish an institution that  meets the needs of the various stakeholders in 
the productive sector, from the research and developmen t stage to product marketing.  The desire for 
reform stems from the current difficulties in impl ementing public production policy, due to the fact 
that it involves the intervention of more than 25 institutions.  The future creation of a Ministry of Production will be based on the merger of the Ministry of Agriculture and Livestock with the Ministry of the Economy, Industry and Trade, together with  changes in the organizational structure of the 
institutions that make up the productive sector. 
(4) F
OREIGN INVESTMENT REGIME  
16. Costa Rica does not have a special foreign investment law or specific administrative 
regulations governing foreign investment.  Article  19 of the Constitution stipulates that foreigners 
have the same individual and social duties and rights as Costa Ricans, wi th the exceptions and 
limitations established by the Constitution itself or by law.3 
17. The State reserves exclusive rights4 in the following branches of activity:  the importing, 
refining and distribution of petroleum and petr oleum products;  alcohol production;  insurance 
services;  railways, seaports and airports;  some postal services;  and sole concessions in some electricity and telecommunications services.  Concessi ons may be granted in co nnection with some of 
these activities under the applicable legislation (see Chapter IV(5)).  In October 2006, the 
                                                     
 
3 See also Resolution No. 5965-94 of 11 October 1994. 
4 See Article 121 of the Political Constitution. WT/TPR/S/180 Trade Policy Review 
Page 16 
 
 
Government introduced in the Legislative Assembly draft laws on opening up certain 
telecommunications and insurance sectors to private investment. 
18. Costa Rica gives guarantees and protection to foreign investment through the following free 
trade agreements currently in force:  Canada, CARICOM, Chile, Mexico and Dominican Republic.  
Costa Rica has ratified the Agreement establis hing the Inter-American Development Bank's 
Inter-American Investment Corporation and is a me mber of the World Bank's Multilateral Investment 
Guarantee Agency (MIGA). 
19. At the end of January 2006, Costa Rica was part y to agreements on the reciprocal promotion 
and protection of investment with 14 trading partners5 and four new agreements6 were in process of 
passing through the legislative approval process. 
20. An important institutional change relating to i nvestment is the more active role assumed by 
COMEX since June 2005 with the creation of an I nvestment and Cooperation Directorate within the 
Ministry.  During the period 2001-2006 CINDE continued to play a very active part in the promotion of foreign investment.
7 
21. Most favoured nation treatment is guaranteed to foreign investors under the provisions of 
bilateral investment treaties, free trade agreements and the GATS.  Foreign investors are eligible for 
the same incentives as those granted to Co sta Rican enterprises (see Chapter III). 
22. Article 45 of the Constitution defines the norma tive framework governing expropriation.  For 
reasons of public necessity, the Legislative Assembly  may, by a two-thirds majority, impose social 
interest limitations on ownership.  The Law on Expropriations (Law No. 7495 of 8 June 1995) 
establishes the principles for determining the compensation payable by the State, on a "fair price" 
basis. 
(5) INTERNATIONAL RELATIONS  
(i) World Trade Organization 
23. Costa Rica acceded to the GATT in 1990 and is an  original Member of the WTO.  Costa Rica 
accords at least MFN treatment to all its partners.  The WTO's Marrakesh Agreement was ratified by 
the Legislative Assembly on 26 December 1994.8  As international treaties the WTO Agreements take 
precedence over domestic legislation and may be inv oked directly before the courts.  Costa Rica has 
made use of the transition periods available to developing countries;  at the end of 2006, it was still 
making use of the extension of the period for gr anting export subsidies under the Free Zone Regime 
and the Inward Processing Regime (see Chapter III(3)(iv)). 
                                                      
5 Argentina (Law No. 8068 of 2 March 2001);  Canada (Law No. 7870 of 25 May 1999);  Chile (Law 
No. 7748 of 23 March 1998);  Chines e Taipei (Law No. 7994  of 29 March 2000);  Czech Republic (Law 
No. 8076 of 2 March 2001);  France (Law No. 7691 of 4 November 1997);  Germany (Law No. 7695 of 5 November 1997);  Korea (Law No. 8217 of 7 May 2002);  Netherlands (Law No. 8081 of 5 March 2001);  
Paraguay (Law No. 8069 of 5 March 2001);  Spain (Law No. 7869 of 21 May 1999);  Switzerland (Law 
No. 8218 of 7 May 2002);  United Kingdom (Law No. 7715 of 26 November 1997 – not in force);  and Venezuela (Law No. 8067 of 2 March 2001). 
6 Belgium and Luxembourg, Bolivia, Ecuador and Finland. 
7 See http://www.cinde.or.cr/principal.shtml. 
8 WTO (1995), Chapter II(4). Costa Rica WT/TPR/S/180 
 Page 17 
 
 
24. Costa Rica participates in the WTO's Informati on Technology Agreement.  It took part in the 
negotiations on financial services and has accepte d the Fifth Protocol annexed to the General 
Agreement on Trade in Services, which was appr oved by Law No. 7897 of 18 August 1999.  
Costa Rica was not involved in the negotiations on te lecommunications, nor is it a party or observer in 
any plurilateral agreement. 
25. Costa Rica has played an active role in th e work of the WTO, having made various 
contributions within the context of the Doha Development Round work programme.9  Costa Rica is 
placing special emphasis on the negotiations on ag riculture and access for non-agricultural goods.  It 
has submitted an initial offer in the WTO negotiations on services (see Chapter IV(5)). 
26. Table AII.1 lists Costa Rica's notifications to the WTO between January 2001 and 
December 2006.  As the table shows, Costa Rica ha s made several notificati ons but some are overdue, 
for example with respect to agri culture.  The authorities have noted that steps are being taken to 
implement the notifications still pending. 
27. During the review period, Costa Rica did not participate as a defendant or complainant in the 
WTO's dispute settlement mechanism.  However, it did ask to be joined in the consultations requested 
in connection with the United States Con tinued Dumping and Subs idy Offset Act of 200010, and in the 
consultations requested in connection with the co nditions for the granting of tariff preferences to 
developing countries by the European Communities.11  Moreover, Costa Rica participated as an 
interested party in the arbitration proceeding re lating to the Partnership Agreement between the 
Africa, Caribbean and Pacific countries and the European Communities (ACP-EC), and in the second 
recourse to arbitration pursuant to the Decision of 14 November 2001.12 
(ii) Preferential agreements in force 
(a) Central American Common Market 
28. In 1963 Costa Rica became a signatory to the General Treaty on Central American Economic 
Integration, which established the Central Ameri can Common Market (CACM).  The membership of 
the CACM also includes El Salv ador, Guatemala, Honduras and Nicaragua.  The rules underlying this 
economic integration are based on two basic working in struments.  One is the Tegucigalpa Protocol to 
the Charter of the Organization of Central Amer ican States, signed in 1991, which amended the 
regional legal framework by creating the Central American Integration System as an institutional 
framework, with the principal objective of adapting the legal framework to the realities and needs of 
the region in order to achieve effective Central Am erican integration.  The other is the Guatemala 
Protocol to the General Treaty on Central Ameri can Economic Integration, signed in 1993, which 
                                                      
9 The main proposals and communications made by Costa Rica up to December 2006 can be found in 
the following WTO documents:  on market access fo r non-agricultural pro ducts, TN/MA/W/45 of 
1 September 2003, TN/MA/W/51/Add.1 of 27 April 2005, JOB(06)/207 of 22 June 2006;  on agriculture, 
G/AG/NG/W/11 of 16 June 2000, G/AG/NG/W/35 of 22 September 2000, G/AG/NG/W/54 of 
10 November 2000, G/AG/NG/W/93 of 21 D ecember 2000, G/AG/NG/W/139 and G/AG/W/50 of 
20 March 2001, WT/MIN(03)/W/6 of 4 September 2003;  on WTO rules, TN/RL/W/6 of 26 April 2002, 
TN/RL/GEN/44/Suppl.1 of 19 July 2005, JOB(05)/80/Suppl.1;  on intellectual property, TN/IP/W/5 of 23 October 2002, TN/IP/W/10/Add.2 of 7 April 2006, TN /IP/W/10 of 1 April 2005;  on the Dispute Settlement 
Understanding, TN/DS/W/12 of 24 July 2002 and W/12/Rev.1 of 6 March 2003;  on services, S/CSS/W/128 of 
30 November 2001, S/CSS/W/129 of 30 November 2001, S/CSS/W/138 of 19 March 2002, and TN/S/O/CRI of 21 April 2004. 
10 WTO document WT/DS217/1 - G/L/430 - G/ADP/D31/1 - G/SCM/D39/1 of 9 January 2001. 
11 WTO document WT/DS246/1 - G/L/521 of 12 March 2002. 
12 WTO documents WT/L/616 and WT/L/625 of 1 August 2005 and 27 October 2005, respectively. WT/TPR/S/180 Trade Policy Review 
Page 18 
 
 
seeks to define the objectives, principles and me asures for achieving a Central American Economic 
Union.13 
29. The CACM has a number of regional regulations.14  At the end of 2006 the region entered the 
final phase of negotiation of the Prot ocol to the Treaty on Investment and Trade in Services, which is 
awaiting consideration and approval by the Council of Minister s for Economic Integration.  Other 
regulatory advances in the process of economic integration include the Regulations on the 
International Customs Transit Regime, the reforms to the Uniform Central American Customs Code 
and its Regulations, the Central American Regulati ons on the Customs Valuation of Goods, and the 
Central American Regulations on the Origin of  Goods (see Chapter III(2)).  Six subgroups are 
working on sanitary and phytosanitary measures. 
30. In 2003, the Council of Ministers for Central American Economic Integration approved the 
application of the Trade Dispute Settlement Mechan ism within Central America, as well as the Model 
Rules of Procedure and the Code of Good Conduct. 
31. By the end of 2006, only 0.2 per cent of tariff lines had not had the tariffs abolished.  The list 
of products excluded from free trade has been shortening and at present exceptions are being 
maintained for unroasted coffee and sugar (among th e five countries);  roasted coffee (Costa Rica 
with the other countries);  alcoholic beverages a nd petroleum products (El Salvador with Honduras);  
and ethyl alcohol (El Salvador with Honduras and Costa Rica).15 
32. With regard to sanitary and phytosanitary m easures, in 2005 a list of 470 Central American 
products and by-products of plant origin, in resp ect of which the Central American countries have 
eliminated import authorizations and phytosanitary import certificates, was approved.16 
33. In 2005, the CACM was the destination for almo st 14 per cent of Costa Rica's exports, worth 
approximately US$985.3 million.  Ce ntral America's share of Costa Rican imports was about 4.4 per 
cent, the equivalent of US$404.1 million.17  Central America has become an important outlet for 
Costa Rican products such as food preparations , medicines, electrical conductors, household 
refrigerators, flat-rolled iron and st eel products, plastic containers, liquid milk, and sewing thread.  
The Central American region is a major supplier fo r the Costa Rican cigarette, wheat flour, cleaning 
preparation, toothpaste and underwear markets.  In 2005, over 65 per cent of Costa Rican imports of each of these products originated in Central America. 
                                                     
 
13 Both instruments were also signed by Panama but to date that country has ratified and put into force 
only the Tegucigalpa Protocol. 
14 Agreement on the Central American Tariff and Customs Regime;  Uniform Central American 
Customs Code, its protocols of amendment and its Regulations;  Central American Regulations on the Origin of 
Goods;  Central American Regulations on Unfair Bu siness Practices;  Central American Regulations on 
Safeguard Measures;  Central American Regulations on Standardization Measures, Metrology and 
Authorization Procedures;  and Central American Regulations on Sanitary and Phytosanitary Measures and 
Procedures. 
15 For more information see Central American Economic Integration, Progress Report at:  
http://www.sieca.org.  gt/SIECA.htm. 
16 These products include:  refined and crude vegetabl e fats and oils, spices and condiments, fruit and 
vegetable juices, jellies and jams, bakery products, flour, semolina and starches put up for retail sale, vegetables 
prepared and preserved, fruit prepared or preserved, veneered wood, plywood and laminated wood, wood 
furniture, colouring products, and wines. 
17 COMEX (2006a). Costa Rica WT/TPR/S/180 
 Page 19 
 
 
34. The CACM was notified18 to the GATT in 1961. 
(b) Free Trade Agreement with Mexico 
35. The Costa Rica-Mexico FTA entered into force on 1 January 1995.  The areas covered by the 
FTA are goods, services, intellectual property, government procurement and investment. 
36. Under the Costa Rica-Mexico FTA, 97 per cent of products imported from Mexico into 
Costa Rica were free of import duties in 2006.  Th e products with restricted  preferential treatment 
included tobacco, some dairy products, sugar, foot wear, powder for the preparation of beverages, 
bovine meat, and cocoa powder. 
37. At the beginning of 2005, Mexico and the Cent ral American countries established a Special 
Group to deal with the presidential mandates under the Tuxtla Gutiérrez Mechanism for Dialogue and 
Concerted Action on the convergence and harmonizati on of the free trade agreements concluded by 
Mexico with the Central American countries. 
38. During the period 2003-2005, Costa Rican exports to Mexico grew steadily at an average 
annual rate of 15 per cent.  In 2005, 2.5 per cent of Costa Rica's exports went to Mexico.  The increase 
in exports in recent years is mainly due to increased sales of palm oil and aluminium sheet and strip.  
In 2005, imports from Mexico amounted to 4.8 per cent of Costa Rican imports of goods and 
consisted mainly of medicines, television sets,  paper and paperboard, electrical conductors and 
household refrigerators. 
39. Mexican investment in Costa Rica continues to  represent an important source of investment 
funds and in 2005 Mexico was the second largest sour ce of foreign direct in vestment in Costa Rica 
(see Chapter I(3)(iii)). 
40. Costa Rica and Mexico notified19 their FTA to the WTO in 2006. 
(c) Free Trade Agreement with the Dominican Republic 
41. The FTA with the Dominican Republic, in for ce since 2001, establishes rules and disciplines 
applicable to trade in goods, trade in services,  investment, government procurement, competition 
policy, dispute settlement and intellectual prope rty.  Once approved, the Free Trade Agreement 
between the Dominican Republic, Central America and the United States will govern trade relations 
between Costa Rica and the Dominican Republic. 
42. Under the FTA with the Dominican Republic, Co sta Rica grants free access to 99.2 per cent 
of its tariff universe.  The main products covered by the tariff reduction programme are meat of bovine animals and swine, prawns, dairy produce, tomato-based preparations , various paper products, 
various plastic products, and various  medicinal products.  On the other hand, the following products 
were excluded from the liberalization undertakings:  sugar, petroleum products, coffee, whether or not 
roasted, wheat flour, ethyl alcohol, rice, chicken, powdered milk, onions, garlic, beans, tobacco, and 
cigarettes. 
43. In 2005, Costa Rican exports to the Dominican Republic accounted for 1.4 per cent of the 
total.  Its main exports were products for san itary use, paper, infusion apparatus, household 
                                                     
 
18 GATT document L/1425 of 24 February 1961. 
19 WTO documents WT/REG218/N/1 of 11 September 2006 and WT/REG218/N/1/Add.1 of 
20 September 2006. WT/TPR/S/180 Trade Policy Review 
Page 20 
 
 
refrigerators, gas stoves, and plastic bags and furnitu re parts.  In 2005, Costa Rica's imports from the 
Dominican Republic amounted to 0.1 per cent of its total merchandise imports. 
44. The Costa Rica-Dominican Republic FTA has not been notified to the WTO. 
(d) Free Trade Agreement with Chile 
45. The Costa Rica-Chile FTA, in force since 2002, includes provisions relating to trade in goods, 
trade in services, investment, government procurem ent, air transport, and dispute settlement.  The 
Central American countries and Chile agreed that  market access would be negotiated bilaterally 
between each of the Central American countries a nd Chile.  Thus, Costa Rica and Chile negotiated the 
issue of market access for goods bilaterally.  Ch ile undertook to accept an asymmetric treaty with 
longer time limits for Chilean products  to access the Costa Rican market. 
46. Costa Rica established the following tariff reduction programme:  immediate phasing out 
from the entry into force of the treaty for goods no t produced in the country (for example, salmon, 
grapes, apples, copper);  phasing out over a period of five years for products with an MFN tariff of 10 per cent or less (for example, certain fish such as hake, cod, lobster and some starches);  phasing 
out over 12 years for products with an MFN tariff of  more than 10 per cent, including most domestic 
industrial production (for example, food products, me chanical engineering products and plastics);  and 
phasing out over 16 years for some agricultural pr oducts (for example, pig meat, avocados and 
sausages).  Bovine meat will be subject to a sp ecial tariff reduction programme starting in 2006 and 
ending in 2011. 
47. Chicken meat and sausages, dairy produce, most vegetables and the forestry sector (timber 
and furniture) are excluded from the Costa Rican tariff reduction programme. 
48. In 2005, Costa Rica exported to Chile 0.2 per cen t of its foreign sales, in products such as 
medicaments in measured doses, food preparations, a nd aluminium sheet and strip.  In 2005, imports 
from Chile represented 1.5 per cent of total Costa Rican  imports owing, in particular, to the high price 
of imports such as petroleum oils and copper wire. 
49. Costa Rica and Chile notified
20 the FTA to the WTO in 2004. 
(e) Free Trade Agreement with Canada 
50. The FTA with Canada entered into force on 1 November 2002.  The agreement covers the 
issues of market access for goods  and services, investment, government procurement and dispute 
settlement mechanisms.  Environmental and labour agreements were negotia ted in parallel.  The 
differences in size and levels of development betwee n Canada and Costa Rica were reflected in the 
asymmetric treatment agreed for the phasing out of tariffs. 
51. Costa Rica eliminated with immediate effect the ta riffs applicable to 65 per cent of its tariff 
universe, mostly relating to raw materials not produced  in Costa Rica.  With regard to the other goods, 
Costa Rica will eliminate the tariffs on 19 per cent ov er seven years, and those on a further 15 per cent 
within 14 years.  In general, mo st of Costa Rican production falls w ithin this latter category.  The 
textile products and clothing sector is the subject of special arrangements which will result in the 
reciprocal elimination of tariffs over a period of seven  years.  Both parties will eliminate the tariffs on 
refined sugar within eight years.  As regards the products excluded from tariff reduction, in the case of 
                                                      
20 WTO document WT/REG136/N/1 of 6 January 2004. Costa Rica WT/TPR/S/180 
 Page 21 
 
 
Costa Rica these include poultry products, dairy pr oduce, fresh potatoes, onions, tomatoes, carrots, 
beans, rice, sweet red pepper, broccoli, bovine meat and pig meat.21 
52. Canada will eliminate the tariffs on goods pr oduced under the Costa Rican free zone regime 
and benefiting from some form of subsidy if Costa Ri ca abolishes those subsidies.  Both parties have 
excluded 2 per cent of their total production from tariff elimination. 
53. In 2005, Costa Rica sent Canada 0.8 per cent of its exports, consisting mainly of agricultural 
products from tropical fruits.  Imports from Canada amounted to about 1 per cent of total Costa Rican 
imports in 2005 and chiefly included paper and pa perboard, potassium chloride and prepared or 
canned potatoes. 
54. Costa Rica and Canada notified22 the FTA to the WTO in 2003. 
(f) Free Trade Agreement with the Caribbean Community 
55. On 9 August 2005, Costa Rica's Legislative Assembly approved the trade agreement 
negotiated between Costa Rica and 12 CARICOM count ries (Antigua and Barbuda, Barbados, Belize, 
Dominica, Grenada, Guyana, Jamaica, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the 
Grenadines, Suriname, and Trinidad and Tobago).  This concluded the internal process necessary for 
the agreement to enter in to force in Costa Rica.23  The agreement came into effect between Costa Rica 
and Trinidad and Tobago on 15 November 2005, with  Guyana on 30 April 2006 and with Barbados 
on 1 August 2006.  In the other CARICOM countr ies the internal process of approval of the 
agreement has still to be concluded. 
56. The FTA with CARICOM covers the questions  of market access for goods and services, 
investment, government procurement, temporar y admission, competition policy, and dispute 
settlement mechanisms.  A total of 93.6 per cent of CARICOM products and 94.5 per cent of Costa 
Rican products will become eligible for duty-free acc ess within a period of not more than four years 
from the entry into force of the agreement.  Seasonal access treatm ent applies to some agricultural 
products.  The products which Costa Rica has excluded  from tariff reduction include rice, sugar, beer, 
chicken, pig meat (except for hams and shoulders ), liquid and powdered milk, paints and varnishes.24 
57. In 2003, Costa Rica sent CARICOM exports wo rth US$70 million, about 1 per cent of its 
total exports, and received from CARICOM imports wo rth US$16.7 million, about 0.2 per cent of its 
total imports for that year.  Costa Rica's expor ts to CARICOM comprised mainly glass containers, 
food preparations and medicaments.  Costa Rica 's imports from CARICOM consisted mainly of 
natural gas. 
58. The Costa Rica-CARICOM agreement h as not been notified to the WTO. 
(g) Free Trade and Preferential Exchange Agreement with Panama 
59. Trade in goods between Costa Rica and Panama  takes place within the framework of the 
1973 Free Trade and Preferential Exchange Agreemen t, which provides for a limited amount of trade 
                                                      
21 See http://www.comex.go.cr/difusi on/otros/Explicativo%20Canada.PDF. 
22 WTO document WT/REG147/N/1 of 17 January 2003. 
23 The Law on the Agreement, Law No. 8455, was published on 7 October 2005 in the Official Journal 
La Gaceta . 
24 See http://www.comex.go.cr/difusion/ otros/Explicativo%20CARICOM.pdf. WT/TPR/S/180 Trade Policy Review 
Page 22 
 
 
liberalization.  Basically, under this agreement, four types of preferential treatment have been 
established, namely, free trade, import and/or export controls, annual quotas and special tariffs. 
60. In 1998, the CACM countries began negotiating an FTA with Panama in order to establish 
broader trade and regulatory coverage.  The regul atory negotiations ended in May 2001, and the 
bilateral negotiations on access for trade in goods  and services began in May 2002.  In the case of 
Costa Rica, these negotiations were la ter suspended and resumed in 2006. 
61. In 2005, Costa Rica's imports of products from Panama accounted for 1.2 per cent of its 
merchandise imports.  The main products importe d were medicaments in measured doses, crude 
petroleum oils, frozen yellow-fin tuna, aluminiu m barrels, boxes and containers, and perfumes.  
In 2005, Costa Rican exports to Panama amounted to 3.0 per cent of the total and consisted mainly of 
medicaments in measured doses for retail sale, food preparations, fungicides, sanitary towels and 
tampons, baby diapers, fertilizers, rolled iron and steel products, and electrical conductors. 
62. The Costa Rica-Panama agreement h as not been notified to the WTO. 
(6) OTHER AGREEMENTS AND ARRANGEMENTS  
63. In January 2004, Costa Rica concluded th e negotiations on the Free Trade Agreement 
between the Dominican Republic, Central America a nd the United States.  In October 2005, the 
Executive sent the Legislative As sembly the draft law on that agreement, which was still being 
considered at the end of 2006.  At that time, the agreement had already been ratified by all the 
signatories apart from Costa Rica.  In addition to discussing the agreement, Costa Rica's Legislative 
Assembly has also to discuss and vote on other dr afts, known as the "Implementation Agenda", which 
contain the undertakings which Costa Rica would put into  effect in parallel with the entry into force of 
the agreement. 
64. Costa Rica is a beneficiary of the United Stat es' Caribbean Basin Initiative (CBI).  In 
May 2000, the United States passed the Trade and Development Act 2000, which extended the 
benefits of the CBI to products not  covered by the original Act.  These additional benefits are granted 
up to September 2008 or until such time as the FTA with the United States comes into effect.  
Between 2001 and 2005, an average of 35 per cent of Costa Rica's exports to the United States entered 
under CBI preferences.  Of these exports, approxima tely 24 per cent entered under the original CBI 
scheme and the other 11 per cent under the initiative  adopted in 2000.  The products traditionally 
exported by Costa Rica under the CBI are pineapples,  clothing, grain alcohol, hair-dryers, articles of 
jewellery, flowers and melons. 
65. Costa Rica benefits from unilateral concessions granted by Canada, the United States and the 
European Union under the Generalized System of Preferences (GSP).