February 27th, 2013 (InsideCostaRica.com) The Legislative Assembly approved yesterday, on second debate and with 42 votes in favor and 3 against, the Mexico-Central American Free Trade Agreement.
The approval by the Legislative Assembly comes after the Constitutional Court gave its approval on Monday.
The agreement is actually a renegotiated version of the free trade agreement that Costa Rica has had with Mexico since January 1st, 1995, modified to include other Central American countries, including El Salvador, Guatemala, Honduras, and Nicaragua.
The net effect will be to ease free trade in the region when a product contains materials from different countries of origin in the region – for example, a garment made in Mexico but including parts (buttons, zippers, or fabric) acquired in other Central American countries. As a result, it is expected that Central American countries will be able to generate more duty-free exports to Mexico.
Last year, Costa Rica exported $322 million in products to Mexico, while it imported a little more than $1 billion from that country, according to the Trade Office.
Government sources say that the agreement will expand trade while reducing transaction costs.