Costa Rica and The United States Enjoying the Biggest Fruits from CAFTA

Looking back on the previous five years after the passing of the Dominican Republic-Central American Free Trade Agreement (CAFTA-DR), Costa Rica and the United States are enjoying the biggest fruits from the then-controversial free trade agreement, according to a World Bank report presented yesterday at the 2013 Latin American Cities Conferences. Costa Rica accounts for 40 percent of CAFTA’s exports to the United States, far outpacing its Central American neighbors and ranking it 3rd, only behind Mexico and Brazil.

Thanks in part to CAFTA, which was implemented here in January of 2009, Costa Rica has significantly diversified its exports. Considerable growth has occurred in technological exports  including computer processors and medical supplies, in addition to its more traditional goods like coffee, bananas and pineapple. All exports were valued at just under $4.5 billion in 2012, according to statistics from the Foreign Trade Ministry and trade generated between the two countries was worth $60.1 billion in this same period.

Costa Rica's VP, Luis Liberman at the 2013 Latin American Cities Conference (Image: COMEX)

During the conference, hosted by the Americas Society/Council of the Americas in Escazú, World Bank’s Director for Central America Felipe Jaramillo said that CAFTA found “fertile ground” in Costa Rica, celebrating the country’s ability to attract foreign direct investment from the U.S., diversify its exports and increase its competitively. Jaramillo also stated that Costa Rica’s policy of “smart globalization,” investing in its human capital, has allowed it to succeed under the trade agreement.

Despite the effects of the international financial crisis, Costa Rica’s GDP has grown an average of 3.2 percent since the trade pact’s implementation. The estimate for the country’s economic growth is 3.7 percent for 2014. While the United States has maintained an overage GDP of 2.8 percent for the last 5 years. Costa Rica’s stable government, growing economy and openness to foreign business development in this country makes it a perfect atmosphere for those looking to invest or retire outside of the United States.