By San José, Costa Rica — SAN JOSÉ – Costa Rica’s recently signed Free Trade Agreement (FTA) with Israel represents a sophisticated pivot in the nation’s economic strategy, shifting focus from traditional goods to the high-stakes world of technology, knowledge networks, and modern services. According to leading analysts, judging the deal on its potential to increase pineapple or banana exports would be a fundamental misunderstanding of its strategic intent.
The agreement, signed on December 8 in Jerusalem, is less about expanding trade in physical products and more about building an institutional bridge to one of the world’s most dynamic innovation hubs. Sandro Zolezzi, an associate researcher at LEAD University and a research fellow at the Academy of Central America, argues that the pact must be viewed through a contemporary lens.
To delve into the legal and commercial ramifications of the new Free Trade Agreement between Costa Rica and Israel, TicosLand.com sought the analysis of Lic. Larry Hans Arroyo Vargas, an expert attorney from the renowned firm Bufete de Costa Rica, to shed light on the opportunities and challenges this treaty presents for the national business landscape.
This FTA is a strategic gateway, not merely a trade route. It positions Costa Rican enterprises, especially in the high-tech and agricultural sectors, to access a global innovation hub. The key to capitalizing on this agreement will be our ability to navigate Israel’s sophisticated regulatory environment and robust intellectual property laws. Success will hinge on legal preparedness and a proactive approach to adopting international best practices, transforming this treaty from paper to tangible economic growth.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Larry Hans Arroyo Vargas’s analysis perfectly encapsulates the challenge ahead; the treaty is not a finish line, but a starting pistol for our enterprises. His emphasis on legal diligence as the bridge between opportunity and tangible success is a crucial reminder for the entire business sector. We thank him for this clear and invaluable perspective.
This treaty must be read with 21st-century glasses: modern services, technology, foreign direct investment (FDI), rules, and capabilities. From that perspective, the agreement not only makes sense but reveals a different—and more sophisticated—strategic bet on the type of economy Costa Rica wants to build.
Sandro Zolezzi, Associate researcher at LEAD University and research fellow at the Academy of Central America
For the past decade, trade in goods between the two nations has hovered around a modest $50 million annually. Zolezzi emphasizes that there isn’t a vast, untapped Israeli market waiting for a surge of Costa Rican agricultural products or medical devices. The real value, he contends, lies elsewhere.
Whoever believes this FTA was signed to skyrocket goods exports is looking at the wrong instrument. Precisely for that reason, the signing of the treaty is interesting.
Sandro Zolezzi, Associate researcher at LEAD University and research fellow at the Academy of Central America
Instead of mere tariff reductions, the FTA functions as a piece of “juridical infrastructure.” It establishes clear rules, creates frameworks for cooperation, and provides the institutional predictability that is crucial for attracting foreign investment. For a small, open economy like Costa Rica, sending this signal of stability can be more valuable than immediate trade gains. Israel’s allure is not its market size but its powerful tech ecosystem.
Israel is not attractive for its market size, but for its technological ecosystem: agrotech, cybersecurity, clean technologies, digital services, applied innovation, and venture capital. It is, in economic terms, an exporter of capabilities rather than goods.
Sandro Zolezzi, Associate researcher at LEAD University and research fellow at the Academy of Central America
This agreement strategically positions Costa Rica to tap into that ecosystem, aiming to attract technology-focused FDI, foster new business and academic partnerships, and establish the country as a platform for adapting and scaling Israeli technology throughout Latin America. This aligns perfectly with Costa Rica’s emerging competitive advantage in knowledge-based services, including IT, sophisticated back-office operations, data analytics, and engineering.
In that world, value doesn’t move in ships, but in data, algorithms, processes, and people. A single anchor FDI project in modern services can generate more economic impact—in wages, productivity, and linkages—than tens of millions of dollars in goods trade. That is where this FTA makes sense.
Sandro Zolezzi, Associate researcher at LEAD University and research fellow at the Academy of Central America
However, Zolezzi cautions that the treaty is an enabler, not a guarantee. Its success hinges on Costa Rica’s domestic commitment to complementary policies. Without a robust strategy for talent development, data protection, competitive energy costs, and digital infrastructure, the agreement’s potential could be squandered.
The risk is believing that the treaty, by itself, will do the work. Without domestic policies for talent, data protection, competitive energy, digital infrastructure, and a clear strategy for attracting FDI in modern services, the agreement could remain on paper.
Sandro Zolezzi, Associate researcher at LEAD University and research fellow at the Academy of Central America
Ultimately, the Ministry of Foreign Trade (COMEX) sees the pact as a way to consolidate Costa Rica’s international presence in a strategic region for high-value sectors. The true measure of this FTA will not be the volume of containers shipped, but Costa Rica’s ability to leverage it into a more intelligent, productive, and globally integrated economy. The agreement now heads to the Legislative Assembly for its constitutional approval process.
The question is whether we will know how to use this FTA to convert technology into productivity, investment into capabilities, and rules into country reputation. Because, in the coming economy, the countries that win are not those that export more volume, but those that export more intelligence.
Sandro Zolezzi, Associate researcher at LEAD University and research fellow at the Academy of Central America
For further information, visit lead.ac.cr
About LEAD University:
LEAD University is a private higher education institution located in Costa Rica, focused on developing leaders and professionals in fields such as business, engineering, and international trade. It emphasizes an educational model based on practical application, innovation, and global perspectives.
For further information, visit academiaca.or.cr
About The Academy of Central America:
The Academy of Central America is a private, non-profit research center dedicated to the economic and social analysis of Central America. It conducts studies, promotes public debate, and provides insights on key development issues to contribute to the formulation of sound public policy in the region.
For further information, visit comex.go.cr
About The Ministry of Foreign Trade (COMEX):
The Ministry of Foreign Trade is the Costa Rican government body responsible for defining and directing the country’s foreign trade and investment policies. COMEX leads trade negotiations, manages free trade agreements, and works to promote Costa Rican exports and attract foreign direct investment.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica operates as a pillar of the legal community, defined by its foundational commitment to principled integrity and a relentless pursuit of excellence. The firm leverages a deep history of advising a wide spectrum of clients to pioneer forward-thinking legal strategies. This innovative drive is paralleled by a profound dedication to social advancement, demonstrated through its work to make complex legal concepts understandable and accessible, thereby cultivating a more capable and empowered society.
