Costa Rica legislators on Tuesday night approved in the second (and final) debate the Tratado de Libre Comercio (TLC) – Free Trade Agreement or FTA – with South Korea.
The approval hopes to move Costa Rica closer to and increase its trade in the Asia market
A statement from the Ministerio de Comercio Exterior (Comex) – Ministry of Foreign Trade – , where the approval is announced, explains that 80% of Costa Rican products will immediately enjoy zero tariffs in the South Korean market, 16% will receive gradual tariff relief and 4% will be excluded from the pact.
“We hail with great enthusiasm the approval … of the (South) Korea-Central America FTA. A great day for the foreign trade sector,” said Foreign Trade Minister Dyala Jimenez on the social networks.
In the Tuesday night definitive vote on the TLC just one legislator voted against it.
Products such as coffee, sugar, non-alcoholic beverages, medical devices, medications, plastics, iron and glass and prosthetics, among others, will be free from import tariffs immediately.
Other products such as bananas, frozen pork and beef, fresh cassava (yuca), pineapples and fruit juices will be subject to tariffs that will be gradually reduced over time.
“This agreement will serve as a tool to promote greater exports, investment and cooperation between the parties, thereby achieving a deepening of our trade relationship with an economy that is a world leader in innovation,” said the ministry.
In turn, 77% of South Korean products, mainly industrial goods, will enjoy zero tariffs starting immediately, while 21% will have their tariffs gradually reduced and 2% were excluded.
Related (video): Korea officially signs FTA with 5 Central American countries
Vehicle parts, medications, cosmetics and certain electronic, electric and textile products will be able to enter Costa Rica free of tariffs.
Excluded from the pact will be South Korean products such as certain types of tires, iron and steel products and plastic products.
In the service sector, the trade agreement includes a regulatory framework that promotes and improves access for Costa Rican service exports to the Korean market, the ministry said.
For the TLC to enter into force, it now requires only the signature of President Carlos Alvarado.
Costa Rica emphasized that South Korea is opening up opportunities for the export sector given that it is a net importer of food and agricultural products, is recognized for its global leadership in innovation and for its ability to incorporate digital technology into its products and manufacturing processes.
Official Costa Rican figures indicate that in 2017 the country exported US$37.6 million worth of goods to South Korea and imported goods worth US$232.2 million.
The negotiation of this TLC was raised and started in the government of Laura Chinchilla (2010-2014), as part of the country’s strategy to open markets in Southeast Asia. Costa Rica already had TLCsin force with China and Singapore.
The negotiation with Korea was completed on November 16, 2016.