Q COSTARICA — On December 5, 2024, the World Trade Organization (WTO) accepted Costa Rica’s complaints regarding various tactics used by Panama to block the export of dairy products and several agricultural goods.
Far from normalizing relations, further complaints, delaying tactics, and setbacks followed, failing to improve trade.
The expectation is that by 2026, a new bilateral rapprochement will be fostered at the level of the Ministries of Foreign Trade and Agriculture.
In an interview with El Observador, the Minister of Foreign Trade, Manuel Tovar, explained that, following the visit of Panamanian President Raúl Mulino with his Costa Rican counterpart, Rodrigo Chaves, the task of rectifying the situation was delegated to the ministers.
“During President Mulino’s recent visit, both presidents instructed their respective Ministers to sit down and seek a definitive solution,” Tovar explained.
According to Tovar, relations have been excellent for years, but the criticism of Panama’s strategy remains. “It’s a situation that has frustrated us because it’s a friendly country, a neighboring country,” he said.
“Historically, we’ve had a very healthy, positive relationship, but we do feel offended by the treatment we’ve received. Even more so after we won the case and they appealed the ruling, after Costa Rica presented them with an alternative appeal that gave us certainty that everything would come to an end,” he added.
The minister pointed out that it’s a “challenging” issue, but that the first step would be to seek rapprochement through a trip to Panama.
The trade dispute was on the agenda of Panamanian President Raúl Mulino’s visit to San José (Coto Courtesy/Presidency of Panama).
Details of the decisive ruling
In June 2021, Costa Rica filed a case with the WTO regarding restrictions imposed by Panama between 2019 and 2020 on the import of several products. The list included dairy products, meats (beef, pork, and chicken), strawberries, pineapples, bananas, and plantains.
The hearings were held in late 2022, and the process continued.
Panama justified its restrictive measures by claiming that Costa Rica had provided insufficient scientific evidence to support its products. It also questioned the use of certain pesticides.
These claims were rejected, and in late 2024, the WTO issued a ruling in favor of Costa Rica.
According to the panel’s ruling, the measures imposed by Panama “are not based on scientific principles and are maintained without sufficient scientific evidence.”
“The Panel recommends that Panama bring its measures into conformity with its obligations under the Agreement on Sanitary and Phytosanitary Measures,” it concluded.
The dispute covered restrictions imposed on:
- Strawberries: In mid-2020, Panama prohibited the import of strawberries from Costa Rica.
- Dairy and meat: The neighboring country did not renew the sanitary approval for Costa Rican exports of these products and requested that the process be repeated from the beginning. The measure affected dairy products, beef, pork, and poultry, as well as their derivatives, including sausages.
- Pineapple: Shipments of fresh pineapple have been blocked since 2019, pending new certifications regarding the management of the pest known as the “pink mealybug.”
- Bananas and plantains: trade ground to a halt in 2019 when the Panamanian government announced it would review its control regulations.
How did this issue drag on?
The WTO ruling came with a tacit threat that Panama ultimately carried out. The international body theoretically has a second appeals process. The problem is that this system has been ineffective for years due to the inability to appoint judges, leaving cases at a standstill when they are appealed.
That is what Panama has taken advantage of. Although Costa Rica proposed consensual solutions and arbitration mechanisms, the neighboring country rejected the initiatives.