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Costa Rica, Panama
Sign Free Trade Agreement
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Costa Rica, Panama
Sign Free Trade
Agreement
Panamanian President
Martin Torrijos, while
in Costa Rica yesterday
signed the Costa Rica -
Panama Free Trade
Agreement with Costa
Rican President Oscar
Arias.
The agreement is meant
to strengthen bilateral
agreements on political
coordination and
economic integration.
The Costa Rica - Panama
FTA stipulates the
removal of trade taxes
to 94 percent of
industrial products and
84 percent of
agricultural products in
a three - to seventeen
year term.
Costa Rica and Panama
have been under
negotiations to enter
into a bilateral trade
agreement since 2002.
Talks on the trade deal
began again last April
with the parties finally
making progress towards
reaching a deal after a
long pause due to
disagreements on
financial services and
dairy products.
Among products covered
in the trade deal are
coffee, tea, fuels,
medicine, rubber,
leather, furs,
machinery, mechanical
equipment, precision
instruments and
antiques.
Costa Rica should take
advantage of the
situation as Panama is
an economy of imports,
with imports per person
in 2006 at us$1.464 and
exports at us$310.
The minister of
Commerce, Alejandro
Ferrer of Panama and
Marco Vinicio Ruiz, of
Costa Rica, were
instrumental in the two
countries reaching the
agreement, which now
must be sent to each
country's legislature
for ratification. In the
case of Costa Rica, the
trade deal will probably
be introduced to the
Legislative Assembly
after October 7, the
date of the referendum
on the trade deal with
the United States.
A study by the Promotora
del Comercio Exterior (Procomer)
in Costa Rica,
determined that Costa
Rican industrial and
food products have much
potential in Panama's
market, as the demand is
expected to increase
over the next several
years.
Martín Zúñiga,
Procomer's general
manager, cited an
example of the benefits
of trade deal,
explaining how the
Panamians invested
us$30.9 million dollars
in the importation of
plastic cups during
2006. The products now
pay up to 15% tax, but
under the trade deal the
tax will be completely
eliminated, which will
allow more possibilities
for Costa Rican products
in Panama.
The expansion of the
Panama canal creating a
megaport on the Pacific
is just one example of
growth expected in
Panama's economy and
potential growth of
imports of Costa Rican
industrial and consumer
products. |
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Costa
Rica's President Oscar Arias (R) and
Panama's President Martin Torrijos sign
a free trade agreement between both
countries.
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