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11 May 2001
Costa Rica: May 2001

The Trade Policy Review Body of the World Trade Organization (WTO) concluded its second review of Costa Rica on 9 and 11 May 2001. The text of the Chairperson's concluding remarks is attached as a summary of the salient points which emerged during the discussion.

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The review enables the TPRB to conduct a collective examination of the full range of trade policies and practices of each WTO member countries at regular periodic intervals to monitor significant trends and developments which may have an impact on the global trading system.

The review is based on two reports which are prepared respectively by the WTO Secretariat and the government under review and which cover all aspects of the country's trade policies, including its domestic laws and regulations, the institutional framework, bilateral, regional and other preferential agreements, the wider economic needs and the external environment. A record of the discussion and the Chairperson's summing-up together with these two reports will be published in due course at the complete trade policy review of Costa Rica and will be available from the WTO Secretariat, Centre William Rappard, 154 rue de Lausanne, 1211 Geneva 21.

Since December 1989, the following reports have been completed: Argentina (1992 and 1999), Australia (1989, 1994 and 1998), Austria (1992), Bahrain (2000) Bangladesh (1992 and 2000), Benin (1997), Bolivia (1993 and 1999), Botswana (1998), Brazil (1992, 1996 and 2000), Burkina Faso (1998), Cameroon (1995), Canada (1990, 1992, 1994, 1996, 1998 and 2000), Chile (1991 and 1997), Colombia (1990 and 1996), Costa Rica (1995 and 2001), Côte d’Ivoire (1995), Cyprus (1997), the Czech Republic (1996), the Dominican Republic (1996), Egypt (1992 and 1999), El Salvador (1996), the European Communities (1991, 1993, 1995, 1997 and 2000), Fiji (1997), Finland (1992), Ghana (1992 and 2001), Guinea (1999), Hong Kong (1990, 1994 and 1998), Hungary (1991 and 1998), Iceland (1994 and 2000), India (1993 and 1998), Indonesia (1991, 1994 and 1998), Israel (1994 and 1999), Jamaica (1998), Japan (1990, 1992, 1995,1998 and 2000), Kenya (1993 and 2000), Korea, Rep. of (1992, 1996 and 2000), Lesotho (1998), Macau, China (1994 and 2001), Madagascar (2001), Malaysia (1993 and 1997), Mali (1998), Mauritius (1995), Mexico (1993 and 1997), Morocco (1989 and 1996), New Zealand (1990 and 1996), Namibia (1998), Nicaragua (1999), Nigeria (1991 and 1998), Norway (1991, 1996 and 2000), Pakistan (1995), Papua New Guinea (1999), Paraguay (1997), Peru (1994 and 2000), the Philippines (1993), Poland (1993), Romania (1992 and 1999), Senegal (1994), Singapore (1992, 1996 and 2000), Slovak Republic (1995), the Solomon Islands (1998), South Africa (1993 and 1998), Sri Lanka(1995), Swaziland (1998), Sweden (1990 and 1994), Switzerland (1991, 1996 and 2000 (jointly with Liechtenstein), Tanzania (2000), Thailand (1991, 1995 and 1999), Togo (1999), Trinidad and Tobago (1998), Tunisia (1994), Turkey (1994 and 1998), the United States (1989, 1992, 1994, 1996 and 1999), Uganda (1995), Uruguay (1992 and 1998), Venezuela (1996), Zambia (1996) and Zimbabwe (1994).


Our discussions over the past two days have allowed us to come to a fuller understanding and appreciation of Costa Rica's trade policies and practices. This has been greatly helped by the openness and frankness of the delegation, led by Vice-Minister Llobet, and I am sure that we are all very grateful for their active participation. Members were all favourably impressed by Costa Rica's good economic performance in recent years. They noted that underlying this performance was Costa Rica's generally liberal trade regime, open investment environment and successful strategy to shift production towards manufacturing, notably into export industries. Trade has also been an important element in this performance with the share of trade to GDP rising from 71% to 97% over the last decade. However, growth of per capita disposable income had not been as impressive as overall growth, suggesting the need to strengthen the linkages between domestic and export-oriented activities. Costa Rica has recognized the problem and is already taking steps in this direction.

Members complimented Costa Rica for its continued strong support, for the multilateral trading system and for its active participation in the work of the WTO. Several Members welcomed Costa Rica's clear support for the launching of a new round of negotiations with a broad agenda. Members took note of Costa Rica's increased participation in preferential arrangements and highlighted the importance of ensuring that such participation is fully consistent with multilateral principles, so as to ensure the complementarity of multilateral and regional liberalization efforts and to avoid the marginalization of third countries.

Members commended Costa Rica for its success in providing a stable economic and institutional environment. However, some recent difficulties to reform and modernize important sectors, such as telecommunications, insurance and energy, raised concerns about Costa Rica's ability to keep up with technological and market developments.

Participants recognized that access to the Costa Rican market is generally liberal. Nevertheless, Members noted the persistence of access barriers in a few but important sectors, particularly in some services areas. Members also raised some concerns about the wide gap between applied and bound tariff rates, relatively high protection in the agricultural sector, price and marketing regulations, and remaining monopolies in telecommunications, insurance and energy distribution services. The Costa Rican delegation noted that legislative initiatives were in course to address some of these issues.

Specific questions were also asked regarding Costa Rica's:

  • strong dependence of exports on a single producer of electronic components;

  • export incentives mechanisms, including after they expire in 2003;

  • schemes to encourage backward linkages between export-oriented activities and the domestic economy;

  • differential treatment of national and imported alcoholic beverages;

  • plans to further upgrade and improve customs procedures and administration;

  • use of labelling and SPS measures;

  • marketing of agricultural products, including sugar and coffee;

  • administration of tariff-quotas and special safeguards on a few agricultural products;

  • plans to liberalize and reform the services sector, and access conditions to professional, air transport and financial services;

  • GATS commitments;

  • possible participation in the GPA; and

  • protection of IPRs.

Members clearly appreciated the comprehensive responses provided by Costa Rica to questions addressed in writing and to the questions raised during the Review. I thank in particular the Costa Rican delegation for its dedication and hard work in providing written answers to the many questions posed by Members.

In conclusion, it is my clear impression that this Body appreciates Costa Rica's commitment to a strong rules-based multilateral trading system. Costa Rica is a prime example of how small WTO economies may benefit from trade liberalization and the multilateral trading system. Generally, Members see the Costa Rican trade and investment regime as open and transparent, but are also aware of remaining barriers. In this respect, several Members believed that liberalization should also extend to those sensitive service areas that to date lag the process of reform. This would bring these sectors — some of which, such as telecommunications are vital for the infrastructure, — in line with policies in other areas. This would complement Costa Rica's otherwise growth supportive policies, to the benefit of both Costa Rica's economy and of the multilateral trading system.