To put it in perspective, Costa Rica—with 5.3 million inhabitants—represents just 26% of Chile’s population (20 million), 15% of Peru’s (34 million), 10% of Colombia’s (53 million), and just 0.4% of Mexico’s (131 million), the other members of the Pacific Alliance.
With these proportions, it would emerge as the smallest country in the bloc, which it has been seeking to join for several years and where the four countries already interact as full members.
The Alliance, however, values Costa Rica’s profile in aspects such as export specialization and environmental policies, factors that could make the country a strategic partner within the group.
In recent months, the accession process has gained momentum. This week, a high-level panel was convened with authorities and productive sectors to define the next steps on the road to incorporation.
The Business Council of the Pacific Alliance (CEAP), a segment that brings together the private productive sectors of the member countries, participated. Its president, Mexican businessman Sergio Contreras, spoke about the added value expected with Costa Rica’s arrival and how the country could benefit from some of the policies that have been developed.
“Costa Rica’s potential contribution has comparative diversifications to introduce high-tech products and services, premium agribusiness, and to serve as a logistics bridge to the Alliance,” he summarizes.
What Costa Rica Can Teach
The factors highlighted by CEAP to Costa Rica stem from the productive diversification that has been achieved over the years, particularly in overcoming exclusively agricultural models.
“When a country exports manufactured goods, it is an industrialized country. An industrialized country has a very significant industrial structure that allows it to have a presence in third countries. It is a huge strength for the economy to have an industrialized country and not one that depends on agricultural products,” Contreras maintains.
Added to this is the professionalization of that production
“When you produce manufactured goods and are in foreign markets, you have to have quality. If your exports aren’t high-quality, they won’t buy from you again,” he adds.
He supports this assessment with quality human talent, highlighting critical factors such as greater bilingualism than other countries. He also highlights the experience gained with high-level production in semiconductors and medical devices.
He also points to the principles of sustainability and carbon neutrality. This would allow for specific approaches to markets like Europe, where these indicators are highly valued. “It reinforces the image as a green Pacific Alliance strategy,” Contreras explains.
The strengths and challenges for Costa Rica
Applying the SWOT (Strengths, Weaknesses, Opportunities, and Threats) methodology, Contreras summarizes the assessment with which Costa Rica would join the Pacific Alliance.
Among the positive elements, he highlights:
Productive specialization in advanced areas with a high level of human talent.
It serves as a connection between the Pacific Alliance and all of Central America (approximately 50 million people in total).
Presence of ports in the Pacific and Caribbean.
Leadership in exports
Participation in the OECD
Regarding threats, Contreras points out:
Internal competition for investments
Global economic changes
Risk of a long-term incorporation
A striking factor regarding the challenges and needs to be addressed is that the observations are not new. The country’s own business sectors have alluded to them on occasion, and the OECD has also raised them.
Contreras lists the need to improve infrastructure, modernize logistics, and address costs.
“I’m seeing a very expensive Costa Rica. Very expensive on a day-to-day basis,” he adds.
The Pacific Alliance sees itself in the mirror of the European Union
To support several of the proposals implied by the Pacific Alliance, Contreras insists that the trade aspect should not be seen solely. “It was born as a strategy, since it is not a trade agreement, as many people believe. Rather, it is a profound agreement; it has a lot to do with a much broader liberalization strategy,” he points out.
To explain this further, he gives the example of the European Union, which mandates the free movement of goods, services, people, and capital. This precept, he points out, is also the one suggested when the Alliance was created in 2011.
“What the governments implemented was a strategy that could achieve a real merger of the four countries so that closer ties between Colombia, Peru, Chile, and Mexico could begin to be established,” the business leader adds.
To date, there has been progress in mobility and investment, and the functioning of the Integrated Latin American Market (MILA). The latter integrates the stock exchanges of most of the Alliance’s members. Pacific Alliance. Furthermore, regarding tariff reduction, it started at 92% and is now at 99%. The goal is to consolidate 100% free trade by 2030.
Friends and rivals within the Pacific Alliance?
Despite Costa Rica’s attempts to join the Pacific Alliance for years, some sectors remain reluctant to join. “We must be resilient. We must understand the opportunities that arise rather than the disadvantages that may arise,” Contreras responds. On the contrary, the manager argues that interaction between countries can be leveraged for nearshoring and friendshoring.
Regarding the challenges within the Alliance, he points out that there may be competition for some investments, but that by presenting itself as a bloc, it could also aim to offer the added value of more members.
“Those are the strengths, the opportunities, preferential access to an expanded market of 230 million people. Integration of value chains.” “regional alliances in manufacturing, agribusiness, and services,” he emphasized.
To date, joint exports have been made and doors have been knocked on jointly in key markets such as Asia-Pacific, all opportunities that the Pacific Alliance insists are doors for the country.
“Costa Rica is small, and with us, it can become big. It can also take advantage of all the synergies of what these four largest economies have achieved, but just because it’s small doesn’t mean it should be ignored. It’s getting on a train that will take it to great opportunities,” he concluded.
