Q COSTARICA — Costa Rica and Panama have been embroiled in a tariff and phytosanitary dispute since 2019, centered on Panama’s blockade of imports of Costa Rican agricultural products, primarily dairy and meat.
This disagreement escalated last Friday (May 15, 2026) after President Laura Fernández asked Foreign Minister Manuel Tovar to undertake “international actions” to resolve the conflict.
She also made it clear that the Panamanian trade blockade would be a priority for her administration.
What is the reason for this?
The conflict began more than two decades ago, but intensified between 2019 and 2020 when Costa Rica suspended sanitary permits for dozens of Panamanian processing plants, citing phytosanitary non-compliance.
In response, Panama blocked the entry of Costa Rican agricultural products—such as dairy, meat (beef, pork, and chicken), strawberries, pineapples, bananas, and plantains—applying its own requirements and entry barriers.
WTO Ruling
In June 2021, Costa Rica filed a complaint with the World Trade Organization (WTO), and hearings were held in late 2022.
Panama’s arguments were rejected, and in late 2024, the arbitration panel issued a ruling in favor of Costa Rica. It determined that the restrictions imposed by Panama were unjustified.
According to the WTO ruling, the measures imposed by Panama “are not based on scientific principles and are maintained without sufficient scientific evidence.”
Panama appealed the decision in early 2025, but the panel is currently inactive due to the inability to appoint judges.
As a result, Costa Rica proposed negotiated solutions and arbitration mechanisms, but Panama rejected them.
Consequently, the impact on Costa Rican exports to its neighbor continues.
The tension escalated.
Despite the WTO ruling, trade tensions between the two governments persist, with Panama defending its measures to protect its local producers and arguing that Costa Rica also maintains cumbersome requirements.
During the celebration of Farmers’ Day (Día del Agricultor), celebrated every May 15, since 1968, Fernández asserted that Panama has created an imbalance in Costa Rican exports.
“I know that potato farmers, onion farmers, dairy producers, and others have been affected by the trade blockade. This is an issue that has already gone beyond the negotiation processes of the Foreign Trade (Comex), and I have directly referred it to the Foreign Minister so that he can establish mechanisms for international diplomacy and international action,” Fernández announced.
For its part, the Panamanian government rejected the president’s statements.
The Panamanian Foreign Ministry asserted that a good relationship had been built with the previous administration and that they wish to preserve it. However, it maintained the trade embargo on Costa Rican agricultural exports.
“Panama wishes to preserve and strengthen this relationship of friendship and cooperation. However, Panama categorically rejects any narrative that attempts to portray the current trade dispute as a unilateral or arbitrary action on the part of our country,” the ministry stated.
Furthermore, it rejected the quality standards that Costa Rica requires of its producers.