Resumed Negotiations for a Free Trade Agreement between Costa Rica and Israel Focused on Technology

by | Oct 19, 2024 | FDI Latin America

Background on the Negotiations

The recent escalation of conflicts in the Middle East had previously delayed negotiations for a free trade agreement between Costa Rica and Israel. However, the resilience of the trade relationship between the two nations has been demonstrated as the Ministry of Foreign Trade (Comex) has confirmed the reactivation of discussions to formalize this vital trade agreement. This development highlights both nations’ commitment to enhancing economic collaboration and leveraging mutual strengths, providing stability in the trade environment.

Initial Steps Toward Collaboration

In March 2023, Costa Rica and Israel took a significant step by signing a commercial memorandum of understanding. This agreement was intended to lay the groundwork for future trade initiatives and cooperation in various sectors, including preparations for a free trade agreement between Costa Rica and Israel. During that period, officials from both countries announced plans to prepare for an FTA that would facilitate trade and investment. The initial timeline was set to kick off negotiations in October of the previous year. Unfortunately, the outbreak of armed conflict coincided with these plans, forcing both parties to reassess their priorities and delay discussions.

Critical Areas of Focus for the free trade agreement between Costa Rica and Israel

With the announcement regarding the resumption of negotiations for a free trade agreement between Costa Rica and Israel, several critical approaches and areas of focus have emerged. “This instrument will provide the country with an opportunity to strengthen exchanges with a strategic partner, a global leader in innovation, and with extensive experience in key areas for Costa Rica,” stated Comex. This sentiment underscores the strategic nature of the partnership between Costa Rica and Israel, which is crucial for both nations’ economic growth and development.

Semiconductors

The semiconductor industry is vital for numerous electronics, automotive, and telecommunications sectors. Israel is known for its advanced technology in semiconductor manufacturing, and collaboration in this field could enhance Costa Rica’s position in the global supply chain.

Digital Services

With the world increasingly relying on digital solutions, Israel’s cybersecurity, software development, and digital infrastructure expertise presents a valuable opportunity for Costa Rica. Integrating these services could enhance the security and efficiency of Costa Rican businesses.

Clean Energy

As both countries prioritize sustainability, the potential for collaboration in renewable energy technologies—such as solar and wind—could be significant. Israel’s advancements in clean energy solutions could support Costa Rica’s ambitious goals of achieving 100% renewable energy.

Precision Agriculture

Agriculture is a cornerstone of Costa Rica’s economy, and adopting Israeli innovations in precision agriculture could boost productivity and sustainability. This collaboration may include advanced irrigation systems, biotechnology, and data analytics to optimize crop yields.

Current Trade Situation with Israel

Israel stands out as one of Costa Rica’s vital commercial interests in the Middle East. The importance of this relationship is reflected in the trade data provided by the Foreign Trade Promoter (Procomer). Currently, Costa Rican exports to Israel are predominantly driven by agro-industrial products.

Leading Exports to Israel

At the forefront of these exports are:

  • Gold Coffee: Renowned globally, Costa Rican coffee, particularly its high-quality arabica beans, is a staple in international markets, including Israel.
  • Pineapple: Costa Rica is one of the leading exporters of pineapples, mainly to Europe and North America. Israel represents a growing market for this tropical fruit.
  • Hearts of Palm: This delicacy has seen increased demand, and Costa Rica is well-positioned to supply this product to Israeli consumers.
  • Sugar and Avocado: Both products are popular among Israeli consumers and contribute significantly to the export portfolio.
  • Fruit Juices and Concentrates: These products are also prominently featured in exports, appealing to health-conscious consumers in Israel.
  • Medical Devices and Technological Processing Equipment: The growing demand for advanced medical technology has opened doors for Costa Rican products in Israeli markets.

Import Products from Israel

On the import side, Israel offers a diverse range of products crucial for various sectors within Costa Rica. The import list from Israel prominently includes:

  • Fertilizers: Essential for enhancing agricultural productivity, especially given changing climate conditions and growing food demands.
  • Gas Containers and Herbicides: Crucial for agricultural and industrial applications, supporting local farmers and businesses.
  • Plastic Materials: These are used in numerous applications and are fundamental to manufacturing and packaging.
  • Dental Products: With a growing focus on healthcare, dental product imports support Costa Rica’s burgeoning medical sector.
  • Electrical Materials and Medical Prosthetics: These are vital for Costa Rica’s healthcare system, which is known for its quality and affordability and attracts medical tourism.

Conclusion: A Strategic Partnership Ahead

The reactivation of negotiations for a free trade agreement between Costa Rica and Israel signals a commitment to enhancing bilateral trade. It underscores the importance of strategic partnerships in today’s global economy. As both countries navigate the complexities of international trade, the emphasis on technology, sustainability, and innovation will play a pivotal role in shaping a prosperous future for both nations. The upcoming discussions will likely focus on crafting an agreement that addresses current global challenges while harnessing the unique strengths of both countries to create a more integrated and resilient economic relationship.