On November 3rd, the United States held its presidential elections; The results have kept not only Americans in suspense, but also their trading partners, such as Costa Rica. Why is the United States so important to our country?
Gisela Sánchez, President of the Costa Rican-North American Chamber of Commerce (Amcham), pointed out that the first thing to highlight is the commercial exchange between both nations.
Precisely, the United States is the main commercial partner of Costa Rica: it represents more than half of the country’s exports and imports. Both countries maintain a free trade agreement, approved in the country through a referendum on October 7, 2007.
Exports and imports
Costa Rica exported more than ¢ 4,500 million colones of products to the United States the previous year; The most exported are medical devices, needles and catheters, prostheses for medical use, serum transfusion equipment and fruits such as pineapple and bananas.
On the contrary, imports from the United States exceeded ¢ 6,000 million colones with products such as automotive parts and supplies, renewable energy, franchises, equipment for hotels and restaurants, among others.
Potential in tourism
Costa Rica has the faith that the opening of borders to the whole world will help the recovery of foreign exchange for tourism. Above all, those who visit the country from the United States.
And the numbers show the contribution of the North American country to this commercial activity: in 2019, 43% of international arrivals on Costa Rican soil came from the United States.
According to data from the Costa Rican Tourism Institute (ICT), the seasonality of the US market develops from December to March and between June and July of each year. For this reason, the Minister of Tourism, Gustavo Segura, has insisted that the opening of air borders to the entire United States will collaborate in the reactivation of tourism. The ICT estimates that the reopening to that country will generate 80 thousand jobs and $ 1,500 million in foreign currency by 2021, that is, 2.5 points of the Gross Domestic Product (GDP).
A continued effort
For her part, Sánchez explained that Costa Rica must continue working to facilitate the visit of Americans to the country. Although the PCR test that was requested to travel to Costa Rica has already been eliminated.
The President of Amcham assures that other actions such as a “global entry” system should be applied to facilitate their transit into the country. With this, Americans who have the system could enter the country more easily, avoiding the lines that are often generated at the airport. “We also have to offer social stability, so that tourists decide to come. We also have to put the batteries and offer them good conditions (regarding offers),” said Sánchez.
Another major issue is foreign investment in the country and the presence of US companies in the national territory. In this area, the Association of Free Trade Zones of Costa Rica (Azofras) is another actor that highlighted the importance of the United States for the Costa Rican economy.
According to Azofras, the United States continues to be the main trading partner in terms of direct investment flows; with a 70.2% share from January to June 2020. At a time when the world faces a health crisis due to the Coronavirus pandemic, Carlos Wong, president of Azofras, hopes that the commercial ties between the two countries will further increase.
“Costa Rica has been developing an aggressive commercial policy based on the market economy, where exports represent an important factor of dynamism for our economy. From Azofras we will continue working to encourage these commercial policies”, said Wong.
Likewise, Sánchez assured that Costa Rica must work to maintain an environment conducive to foreign investment and take advantage of the “Return to the Americas Program” promoted by the current administration.
This measure intends that companies with US capital that are outside the American continent return to the United States or Latin America. “We have the opportunity to boost these investments (…), we have to work at this time on macroeconomic stability and the protection of the free zone regime,” she said.