Costa Rica will suspend tariff benefits for Panamanian products, the country’s foreign trade ministry said on Thursday, marking another step in a bilateral trade dispute that started in 2020 and is the subject of a World Trade Organization (WTO) lawsuit.
Costa Rica suspended tariff benefits for its southern neighbor after Panamanian authorities failed to comply with a 2021 ruling regulating tomato trade between both parties, according to a statement published by the ministry which did not specify the items affected or when the suspension would be enacted.
“I hope they understand … we are ready to go all the way,” Costa Rican Trade Minister Manuel Tovar told lawmakers on Wednesday.”Taxing products that arrive through free trade as a retaliatory measure is an example of what we are willing to do,” he added.Costa Rica and Panama entered a Free Trade Agreement (FTA) in 2008.
Authorities from Panama’s Ministry of Commerce and Industries could not be immediately reached for comment.
Panamanian authorities have previously stated they are confident both sides will find a solution to solve the dispute.
Commerce and Industries Minister Federico Alfaro said in a tweet late on Wednesday that both countries recognize the WTO’s competence to solve the dispute.
Panama is the fifth largest market for Costa Rican products by value, according to government statistics.
Costa Rica’s imports from Panama totaled $221 million and exports amounted to $603 million in 2021.