Weekly Report - 15 April 2010 (WR-10-15)

COSTA RICA | FTAs with China and Singapore. Last week Costa Rica signed free trade agreements (FTAs) with China and Singapore, both of which await congressional approval. The FTA with China, the country's second biggest trading partner after the US, follows six rounds of negotiation over a 14-month period and grants Costa Rica immediate duty-free access to the Chinese market for 99.6% of its products (mainly agricultural, including meat, fruit, juice and coffee, although China refused to remove its tariffs on sugar). In return Costa Rica - the only country in Central America to have diplomatic ties with China, after switching its allegiance from Taiwan in 2007- will lift tariffs on 58% of Chinese products immediately, with a further 32% to follow over the next 10 years. Bilateral trade reached US$3.1bn in 2009, a 10% increase on the previous year. Under the Costa Rica-Singapore FTA, both countries agreed to lift tariffs on 100% of each other's exports over the next 10 years. The FTA with China, in particular, has met with strong opposition in Costa Rica, especially from the Chamber of Industries, which fears that it will flood the local market with cheap Chinese manufacturing and consumer goods, putting local manufacturers out of business.

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