On November 1st of 2002, the first Canada-Costa Rica Free Trade Agreement (CCRFTA) went into effect. The objectives of the FTA were mainly:
- creating economic development
- establishing free trade
- eliminating trade barriers
- promoting fair competition
The agreement showed almost immediate positive results and within three years trade between the two countries jumped from 324 million to 440 million dollars.
“The Canada–Costa Rica Free Trade Agreement was designed to take into account the dissimilar sizes and levels of development of the two economies and to provide balanced market access for industrial and agricultural exports from both countries.” –International Economics
In the very near future, the CCRFTA will be getting a face lift. In August of 2011, Costa Rican President Laura Chinchilla and Canadian Prime Minister Stephen Harper made the announcement that the two countries would begin negotiating a “modernization” of the existing agreement. This coming after the initial talks between Costa Rica and Canada’s previous Minister of International Trade in 2010.
Current Canadian Minister of International Trade Ed Fast stated last Friday that the 4th round of talks has been concluded in regards to CCRFTA expansion and modernization. The existing agreement seems to be lacking in such areas as government procurement, financial services and investment. Canada feels that the FTA modernization will further help to aid Canadian businesses.
Costa Rica benefits from the original draft by seeing a sixty seven percent elimination of tariffs on Canadian goods. The remaining tariffs, depending on the product, would be wiped away over a period of either seven or fourteen years. Also, because Canada receives an eighty seven percent cut on duties (Canada is a much larger country), Costa Rica enjoys earning substantially more money in the exportation of Costa Rican products. In 2010 Canada purchased $436 million worth of Costa Rican export, which is millions of dollars higher than a decade ago.
The new agreement is expected to further deepen trading relations between Costa Rica and Canada and increase the monetary amount of import/export between the two countries even more. Both Costa Rica and Canada can expect to see new opportunities for their business communities in markets that were left out of the original agreement.
Source: Ottawa Business Journal