Abstract
This chapter stresses the importance to Costa Rica’s economy of its accession to the Pacific Alliance (PA) and analyses market access negotiation challenges. One of the requirements for accession to the PA is for new members to have existing free trade agreements in place with the PA members. We compare the agreements Costa Rica already has with each of the PA countries in order to identify the sensitive products that may present the greatest challenges in the accession process. One of the difficulties with these sensitive products is to determine how the four separate agreements that Costa Rica has negotiated with each Member of the PA can be converted into a single agreement in terms of the tariff schedule and rules of origin. The chapter concludes that with respect to rules of origin, all preferential trade agreements (PTAs) signed by Costa Rica with PA member states – except for the Free Trade Agreement (FTA) with Chile – have diagonal cumulation of origin and therefore the benefits of market cumulation outweigh the challenges posed by sensitive products. In terms of the tariff schedule, sensitive products are identified in current PTAs. However, if Costa Rica becomes a full member of this economic bloc, the country will benefit from increased market access due to the regional cumulation, as well as from many other commitments beyond market access.
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- 1.
As an example: on 23 January 2017, President Trump signed a presidential memorandum to withdraw from the Trans-Pacific Partnership following a promise made during the 2016 presidential campaign (Diamond and Bash 2017). Also, in its National Trade Policy Agenda for 2017, the USA states that the trade policy of the USA will be guided by the principle of expanding trade “in a way that is freer and fairer for all Americans”. In order to do so, the US Administration will focus “on bilateral negotiations rather than multilateral negotiations – and by renegotiating and revising trade deals when our goals [i.e. those of the USA] are not being met”. The USA will also resist “efforts by other countries – or international bodies like the World Trade Organization – to weaken the rights and benefits of, or increase the obligations under, the various trade agreements to which the United States is a party” (USTR 2017).
- 2.
These are as follows: Colombia, Central America, Canada, CARICOM, Chile, China, Dominican Republic-Central America-United States (CAFTA-DR), Mexico, Panama, Dominican Republic, Peru, Singapore, European Union and the European Free Trade Association (EFTA).
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Wong Chan, S., Palma, C. (2019). Market Access Challenges for Costa Rica in the Process of Accession to the Pacific Alliance. In: Sauvé, P., Polanco Lazo, R., Álvarez Zárate, J. (eds) The Pacific Alliance in a World of Preferential Trade Agreements. United Nations University Series on Regionalism, vol 16. Springer, Cham. https://doi.org/10.1007/978-3-319-78464-9_6
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