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U.S. Statement on the Trade Policy Review of Costa Rica
September 25, 2013

WTO Trade Policy Review of Costa Rica

Statement delivered by Neil J. Beck
U.S. Delegation

September 24, 2013

Thank you, Chair.  The United States is pleased to welcome Mr. Fernando Ocampo Sánchez, Vice Minister of International Trade, Ambassador Saborío, and the other members of the Costa Rican delegation to the fourth Trade Policy Review of Costa Rica.  We would also like to express our appreciation to the WTO Secretariat and to the Government of Costa Rica for the reports provided in advance of this meeting, as well as to the discussant, Ambassador Kwok Fook Seng, for his contribution to this review.

In the last five years, the Costa Rican economy experienced positive economic growth, with an average 3.2 percent real GDP rate of growth, despite the 2008 and 2009 global financial crisis.  This economic growth reflects several steps that the government of Costa Rica took to further integrate its economy into the global trading system.  The Secretariat, in its report, points to accomplishments in such areas as establishment of a proactive policy of attracting investment, diversification of Costa Rica’s production and export platform to cover higher technology products and services, and simplification and computerization of customs procedures.

We note that at the time of Costa Rica’s last Trade Policy Review in 2007, the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR) had not yet entered into force for Costa Rica.  This comprehensive free trade agreement covers trade in goods and services, intellectual property rights, investment, telecommunications, labor, and environment, and it promotes economic integration within Central America and with the Dominican Republic.  When Costa Rica took the necessary steps for the CAFTA-DR to enter into force in 2009, Costa Rica undertook a number of reforms that also benefited Costa Rica’s trading partners more broadly, beyond its other CAFTA-DR partners.  Costa Rica adopted a series of significant legislative and regulatory measures to comply with its FTA commitments; measures that we believe contributed widely to the multilateral trading system and to the expansion of global trade, while also helping to protect and preserve the environment.

As Costa Rica’s number one trading partner, the United States’ commercial relationship with Costa Rica is strong, positive, and growing.  Our total two-way goods trade during 2012 was $19.3 billion.  U.S. goods exports to Costa Rica in 2012 were US$7.2 billion, and U.S. goods imports from Costa Rica totaled US$12.0 billion.  Despite what could have been unfortunate timing of the CAFTA-DR entering into force in Costa Rica at the same time as the 2008 and 2009 global financial crisis, U.S. goods imports from Costa Rica increased 206 percent from 2008, the year before entry into force, and U.S. goods exports to Costa Rica increased 27.3 percent.  Costa Rica is currently the United States’ 34th largest goods trading partner.

As noted in the Secretariat’s and Costa Rica’s reports, Costa Rica changed a number of laws and regulations in order to implement the CAFTA-DR, particularly in the areas of intellectual property, telecommunications, and insurance.  While these changes are important and noteworthy actions, they are not sufficient alone.  It is also important to provide regulatory transparency to facilitate investment and market access, as well as to ensure effective enforcement to protect traders’ rights and benefits under those laws.  We therefore encourage Costa Rica to increase its efforts towards regulatory transparency and effective enforcement and ensure that such efforts are followed-through on the ground.  Priority actions include follow-through to reduce patent delays and backlogs, to ensure that government institutions use only lawfully licensed software, to provide ex officio powers to law enforcement and customs officers, and to create a specialized IPR criminal enforcement unit.  Only if these and other steps are taken will the maximum benefits accrue to Costa Rica and other trading partners.  In particular, we have noted that market access has been hampered in the telecommunications and insurance sectors, as have investment and services opportunities in energy and other highly regulated sectors.

Costa Rica has taken significant steps in improving its economic competitiveness since its last Trade Policy Review.  In order to further improve its competitiveness in an increasingly globalized economy, we urge Costa Rica to continue to strengthen its policies and practices regarding standards and safety to avoid impeding global trade in such products as food, pharmaceuticals, agricultural goods, and chemicals and cosmetics. We hope to hear more in this review about Costa Rica’s plans to address these types of issues.

The United States welcomed the May 2013 Executive Decree that provides for the elimination of the rice price support by March 1, 2014.  We urge Costa Rica to continue to be transparent as it considers an alternative mechanism for rice pricing that we hope will bring Costa Rica into compliance with its domestic support commitments.  We also urge Costa Rica to remain mindful of the impact that uncertainties can have on the market as March 1, 2014, approaches.

We have submitted a short list of questions about specific issues in Costa Rica’s trade regime.  We look forward to reviewing Costa Rica’s responses when they are ready.

The United States looks forward to further deepening our trade and economic partnership with Costa Rica and supports Costa Rica’s progress along the path of global economic integration that it has so strongly pursued. As a founding Member of the WTO, we commend Costa Rica on its active participation in the organization, and for its longstanding commitment to the multilateral trading system.  We remain committed to continued close cooperation with Costa Rica to deepen our relationship bilaterally, in regional fora, and in the WTO.  Thank you.