- Category: Business
- Published on Friday, February 10 2012 05:37
- Written by Rod Hughes
- Hits: 913
Trade barriers, transport costs and ignorance of the dynamics of South American markets are causing this country to miss golden opportunities represented by the region, the newspaper La Nacion reported Monday.
Although South American trade last year climbed 15% over the year before, trade actually dropped last year to Brazil, Colombia and, strangely, to Chile. One of the oldest Costa Rican free trade treaties was signed in 2002 with Chile.
Although the closest geographically, that region represents only Costa Rica's sixth largest trade partner, the paper reported, falling behind such far-away places as Asia and even such poor areas as the Caribbean.
Despite representing a promising market of developing economies, the Internationnal Monetary Fund predicted trade would only grow from 3.5-5% this year.Demand for Costa Rican goods increased in countries like Argentina, Ecuador, Venezuela and Peru last year.
But the three countries where trade declined represent the greatest potential, the paper pointed out. Colombia showed its economic clout in the purchase by Aval of the BAC Credomatic and Banco Davivienda's acquisition of the Central American operations of HSBC.
Brazil is considered the economic engine of the region in the medium term, that also landed two spectacular dollar earners, the Olypmics in 2016 and the World Cup soccer championships in 2014. It has, to a large degree, also freed itself from the albatross of dependence on foreign fossil fuels.
Monical Araya, president of the Chamber of Exporters, rejected the thesis that South American will always take a back seat to North America, Europe and Central America when it comes to this country's trade. She notes that some nations in that region are still among the 50 top trade parters here.
On the other hand, many southern countries are direct competitors, producing many of the same products that Costa Rica exports. (See past article on a free trade treaty with Colombia.)
Despite the dip in trade last year, Foreign Trade Minister Anabel Gonzalez points out that trade with Chile increased 16% annually on an average since 2002. Moreover, that trade has favored Costa Rica, with twice as many exports (30%) as imports (14%).
Experts in foreign trade interviewed by La Nacion were all agreed on one point--Costa Rican exporters should lose some of their fears in opening trade with the much larger countries to the south. If they can successfully trade with giant China, South American nations should be a breeze.