World Trade Organization |
RESTRICTED |
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WT/TPR/S/180 | |
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(07-1009) |
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Trade Policy Review Body |
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TRADE POLICY REVIEW Report by the Secretariat COSTA RICA |
This report, prepared for the third Trade Policy Review of Costa Rica, has been drawn up by the WTO Secretariat on its own responsibility. The Secretariat has, as required by the Agreement establishing the Trade Policy Review Mechanism (Annex 3 of the Marrakesh Agreement Establishing the World Trade Organization), sought clarification from Costa Rica on its trade policies and practices. Any technical questions arising from this report may be addressed to Mr Mario Berrios (tel. 022 739 63 97), Ms Ulla Kask (tel. 022 739 56 27) or Mr Raymundo Valdés (tel. 022 739 53 46). Document WT/TPR/G/180 contains the policy statement submitted by Costa Rica. |
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SUMMARY OBSERVATIONS vii
(1) Introduction vii
(2) Economic Environment vii
(3) Trade And Investment Policy Framework vii
(4) Market Access For Goods viii
(5) Export measures viii
(6) Other Measures Affecting Trade ix
(7) Sectoral Policies ix
I. Economic environment 1
(1) Overview 1
(2) Macroeconomic Trends 1
(i) Structure of the economy, production and employment 1
(ii) Fiscal policy 4
(iii) Money and exchange rate policy 5
(iv) Balance of payments 8
(3) Trade and Investment Flows 10
(i) Trade in goods 10
(ii) Trade in Services 11
(iii) Foreign investment 11
(4) Outlook 12
II. trade and investment regime 13
(1) Overview 13
(2) General Legal and Institutional Framework 13
(3) Trade Policy Objectives and Formulation 14
(4) Foreign Investment Regime 15
(5) International Relations 16
(i) World Trade Organization 16
(ii) Preferential agreements in force 17
(6) Other Agreements and Arrangements 22
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III. TRADE POLICIES BY measure 23
(1) Overview 23
(2) Measures Affecting Imports 24
(i) Customs procedures 24
(ii) Customs valuation 26
(iii) Rules of origin 27
(iv) Tariffs 28
(v) Other charges affecting imports 34
(vi) Import licensing, restrictions and prohibitions 35
(vii) Anti-dumping, countervailing and safeguard measures 40
(viii) Technical regulations and standards 43
(ix) Sanitary and phytosanitary measures 46
(3) Measures Directly Affecting Exports 49
(i) Registration, documentation and export licences 49
(ii) Export charges and minimum prices 50
(iii) Export prohibitions and other restrictions 50
(iv) Subsidies and other export-related tax benefits 52
(v) Financing, insurance, promotion and other measures 57
(4) Other Measures Affecting Production and Trade 58
(i) Incorporation of companies and their tax regime 58
(ii) Price controls and competition policy 59
(iii) Incentives 62
(iv) State-trading enterprises, State-owned enterprises and privatization 66
(v) Government procurement 67
(vi) Protection of intellectual property 70
IV. trade policies by sector 74
(1) Overview 74
(2) Agriculture 76
(i) Overview 76
(3) Manufacturing 83
(4) Electric Power 85
(5) Services 87
(i) Principal characteristics 87
(ii) Telecommunications 89
(iii) Postal services 91
(iv) Audiovisual services 92
(v) Financial services 92
(vi) Air transport 97
(vii) Maritime transport 100
(viii) Professional services 102
REFERENCES 107
APPENDIX TABLES 111
TABLES
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I. ECONOMIC ENVIRONMENT
I.1 Sectoral structure of GDP and employment, 2001-2005 2
I.2 Basic economic indicators, 2001-2005 3
I.3 Non-financial public sector (NFPS) financial accounts, 2001-2006 5
I.4 Main monetary indicators, 2001-2006 7
I.5 Balance of payments, 2001-2006 9
I.6 Trade in services, 2001-2006 11
I.7 Foreign investment position, 2001-2006 12
III. TRADE POLICIES BY MEASURE
III.1 Summary of MFN tariff, 2006 29
III.2 MFN tariff structure, 2006 30
III.3 Tariff reduction programmes in FTAs signed by Costa Rica 31
III.4 Tariff concessions granted under special customs regimes, 2006 33
III.5 Import requirements for certain goods 36
III.6 Anti-dumping procedures, 2001-2006 42
III.7 Export prohibitions and restrictions 51
III.8 Free Zone Regime incentives 54
III.9
III.10 Penalties relating to competition, 2001-2005 61
III.11 Some tax incentives included in Law No. 7293 63
III.12 Other tax incentives 64
III.13 Principal financial incentives applicable to production and investment 66
III.14 Intellectual property treaties ratified by Costa Rica 70
IV. TRADE POLICIES BY SECTOR
IV.1 Imports by
IV.2 Value added by activities in the manufacturing sector, 2001-2005 84
IV.3 Share of service activities in GDP and employment, 2001 and 2005 88
APPENDIX TABLES
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I. ECONOMIC ENVIRONMENT
AI.1 Merchandise exports by product, 2001-2005 113
AI.2 Merchandise imports by product, 2001-2005 115
AI.3 Merchandise exports by trading partner, 2001-2005 116
AI.4 Merchandise imports by trading partner, 2001-2005 117
II. TRADE AND INVESTMENT REGIME
AII.1 Notifications to the WTO, January 2001 to December 2006 118
III. TRADE POLICIES BY MEASURE
III.1 Overview of
intellectual property rights, 2006 120
IV. TRADE POLICIES BY SECTOR
AIV.1 Products subject to access commitments with tariff quotas, 2005-2006 123
AIV.2 Summary of
(1) Introduction
1. Since its last Trade Policy Review in 2001,
2. Long-standing restrictions remain in place in a few service sectors, with state monopolies present in a number of key services, in which some inefficiencies have arisen over time. A number of these restrictions would be eliminated in the context of the implementation of the
(2) Economic Environment
3.
4. The current account of the balance of payments has been in deficit, equivalent to some 3.5 per cent of GDP during the first three quarters of 2006, caused mainly by a worsening trade balance despite expanding exports. The services balance has been in surplus due principally to tourism receipts. The main trading partner of
(3) Trade And Investment Policy Framework
5.
6. Although Cost Rica formulates its trade policy mostly at a national level, it takes into consideration its participation in the Central American Common Market. At the end of 2006,
7.
(4) Market Access for Goods
8. Since its last Review, Costa Rica has taken measures to modernize its trade regime including by simplifying and computerizing customs procedures and adopting new regulations on customs procedures and valuation. The tariff is
9. In the context of the Central American
free-trade agreements it has in force.
10. Imports receive national treatment in the application of domestic taxes except in certain cases such as the tax of the Institute for Municipal Development, which is levied at 10 per cent on imported beer and at 3 per cent on domestic beer. The tax of the Institute for Agrarian Development is applied at a rate of 5 per cent on carbonated soft drinks from national brands and at 10 per cent on similar products produced in
11. During the period under review,
12.
(5) Export Measures
13.
14.
(6) Other Measures Affecting Trade
15. Costa Rica maintains numerous incentive schemes in addition to exports subsidies, with fiscal incentives and tax exemptions granted under around 200 different laws. At end 2006, the Ministry of Finance was working on a draft law on transparency and rationalization of incentive regimes. A comprehensive evaluation of incentives would lead to greater transparency into their use and help ensure that benefits outweigh costs, which is a crucial consideration in the light of
16.
17. The legal framework for competition policy in
18. Procurement of goods and services by the public sector in
19. There have been no major modifications to the legislation regarding the protection of intellectual property rights, with the adoption of complete regulations on enforcement procedures still pending. Costa Rica grants no protection to new plant varieties but, at end 2006, the Legislative Assembly was discussing a draft law as part of the parallel agenda to the CAFTA-DR.
(7) Sectoral Policies
20. The agriculture, forestry and fishing sector contributed just under 8 per cent of
21. The manufacturing sector contributes about 20 per cent to
22. The services sector accounts for about 60 per cent of GDP and 62 per cent of employment. As noted, the State continues to maintain monopolies on a number of service activities. The efficiency and cost of the services provided by a number of state monopolies is questionable and, thus, the authorities have been taking steps to allow for greater participation by the private sector in some of these services.
23. Costa Rica's list of specific commitments under the GATS is limited, including only 5 of the 12 sectors specified in this Agreement.
24.
25. Costa Rican legislation grants the state-owned National Insurance Institute the monopoly over almost all types of insurance. This has hindered the development of the national insurance market, creating inefficiencies and limiting consumer choice.
26. The state-owned Costa Rican Electricity Institute (ICE) and its subsidiaries maintain the only concessions to operate basic local telephony, long distance calls (national and international), and mobile telephone services as well as value added services, Internet connection and satellite communications. The ICE also holds the only concession for the transmission of electricity and controls most generation, distribution and commercialization of electricity.
27. As part of the parallel agenda for the ratification of the CAFTA-DR, the Legislative Assembly is considering draft legislation to liberalize investment restrictions in insurance and telecommunications. To increase the predictability of
28. In recent decades, maritime port services have faced problems related to the cost of operations and insufficient investment in infrastructure. The ownership of maritime ports must be in the public domain but concessions may be granted to private operators to provide services. In practice, due to the slow pace of granting of concessions, significant delays have occurred in the modernization of port infrastructure. Concessions for coastal shipping are only granted to Costa Rican citizens or to companies established in
29.
there have been difficulties in implementing them. Only Costa Rican nationals may undertake local air transportation services.
30. With the exception of commitments on medical and dental services,