Costa Rica, China reach preliminary free-trade accord
Bloomberg | February 10, 2010
Costa Rica, China Reach Preliminary Free-Trade Accord (Update2)
By Blake Schmidt
Feb. 10 (Bloomberg) — Costa Rica and China reached an agreement on a free-trade accord after six rounds of talks, Costa Rican Foreign Trade Minister Marco Vinicio Ruiz said.
“We’re linking ourselves with the world’s most dynamic economy,” Ruiz said in an interview today after a news conference in San Jose. The accord needs to be approved by Costa Rica’s congress before it can take effect, he said.
Exports to China will grow 15 percent this year and as much as 20 percent in 2011 because of the trade agreement, Ruiz said in the interview. Costa Rica’s exports to China rose 13 percent last year to $768 million, led by microchips produced by Intel Corp., according to government trade agency Procomer.
President-elect Laura Chinchilla, who stepped down as President Oscar Arias’s vice-president to run, vowed during the campaign to help turn around the $29 billion economy with a Chinese trade deal. The country lost about 64,000 jobs last year as tourism and trade with the U.S. plunged.
Opposition candidate Otto Guevara accused Nobel laureate Arias of “checkbook diplomacy” for breaking ties with Taiwan in exchange for Chinese trade and investment.
Ruiz said he expects Arias to sign the accord in April and lawmakers to approve it before 2011.
Critics, including the Costa Rican Chamber of Industries, say the agreement will flood the local market with low-quality imports, increase risks for consumers and force Costa Ricans into the informal sector to compete with Chinese producers.
Sugar, Tires
“China as a trade partner won’t stimulate Costa Rican producers to rise to the level of competition, as would trade agreements with the U.S. or Europe,” Juan Maria Gonzalez, the chamber’s president, said by phone last week.
Costa Rica agreed to lift tariffs on more than 94 percent of Chinese goods within 10 years, and China will lift tariffs on 90 percent of Costa Rica goods in the same period, Fernando Ocampo, Costa Rica’s head negotiator in the talks, said. China refused to lift tariffs on Costa Rican sugar while Costa Rica refused to lift tariffs on Chinese tires, some dairy products and plastics, he said.
