By San José, Costa Rica — JERUSALEM – Costa Rica and Israel have embarked on a new era of economic and diplomatic cooperation, signing a comprehensive free trade agreement on Monday that signals a significant deepening of ties between the two nations. The landmark deal, which immediately eliminates over 90% of tariff barriers, was complemented by the major announcement that Costa Rica will establish a commercial innovation office with diplomatic status in Jerusalem.
The agreement was formalized in Jerusalem by Costa Rica’s Minister of Foreign Trade, Manuel Tovar, and his Israeli counterpart, Minister of Economy and Industry Nir Barkat. This move is poised to substantially boost the current bilateral trade, which sees Israel exporting approximately $32 million in goods to Costa Rica annually. The elimination of most tariffs is expected to create new opportunities for businesses in both countries.
To delve deeper into the legal and commercial ramifications of the new Free Trade Agreement, TicosLand.com sought the expertise of Lic. Larry Hans Arroyo Vargas, a distinguished attorney from the prestigious firm Bufete de Costa Rica, who shared his analysis with us.
While this Free Trade Agreement undeniably opens significant doors for market access and foreign investment, its true success hinges on the details within the juridical framework. Local businesses must now perform rigorous due diligence to understand the new rules of origin, intellectual property protections, and dispute resolution mechanisms. It’s a landscape of immense opportunity, but also one that demands strategic adaptation and legal preparedness to ensure the reciprocal benefits are fully realized and competitive disadvantages are mitigated.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
The expert’s emphasis on legal preparedness serves as a vital call to action for the national business sector, reminding us that opportunity must be met with strategy. We extend our sincere gratitude to Lic. Larry Hans Arroyo Vargas for his clarifying and indispensable analysis.
Adding a significant diplomatic dimension to the economic pact, Minister Tovar confirmed the new commercial office is slated to open in Jerusalem in January or February of 2026. In a move underscoring the importance of the initiative, Costa Rican President Rodrigo Chaves is expected to attend the inauguration ceremony, solidifying the nation’s commitment to the new venture in the contested city.
Minister Tovar lauded the agreement as a forward-thinking and robust framework designed to foster mutual growth and provide stability for international commerce.
What we celebrate today is a high-quality, modern, updated, and ambitious agreement. It will provide legal certainty to our exporters and importers, to our consumers, to expand their operations and diversify markets, while paving the way for new products and strategic investments to flow between our two countries.
Manuel Tovar, Minister of Foreign Trade of Costa Rica
Beyond the technical details of trade, Tovar emphasized the personal and national connections being fortified. He framed the pact not just as a contract, but as a commitment to a shared future built on strengthened relations.
Today we sign an agreement, but the most important thing is that we strengthen our friendship and open a new chapter of shared prosperity.
Manuel Tovar, Minister of Foreign Trade of Costa Rica
The negotiations, which began in early 2023, navigated a complex geopolitical landscape, continuing through the period following the Hamas attacks and Israel’s subsequent military operations in Gaza. When asked about this challenging context and calls from other Latin American governments for a boycott, Tovar acknowledged the difficulty but expressed optimism about a regional political shift. He believes a trend toward right-leaning governments in Latin America will foster stronger alliances.
It has been a tough, difficult process… I believe the winds will blow in favor of a strong and robust relationship with the State of Israel.
Manuel Tovar, Minister of Foreign Trade of Costa Rica
For Israel, the agreement represents a strategic foothold in Central America. Minister Barkat, a former mayor of Jerusalem, celebrated the deal as a testament to Israel’s economic resilience, calling its performance during wartime “almost a miracle.” He noted this is the seventeenth free trade agreement signed by his country and highlighted Costa Rica’s unique potential.
We see in Costa Rica a great friend of Israel and we want to see how to take that to the next level. [It is] a gateway to Central America.
Nir Barkat, Minister of Economy and Industry of Israel
Barkat extended particular gratitude for the decision to place the new office in Jerusalem, a city both Israelis and Palestinians claim as their capital. He thanked Tovar “on behalf of all the Jewish people who understand and see Jerusalem as their eternal and undivided capital of the world.”
According to Roberto Spindel, President of the Israel-Latin America Chamber of Commerce, the treaty’s strategic value lies in the complementary nature of the two economies. He noted that Costa Rica possesses the most advanced technological sector in Latin America, offering Israeli firms a “bridge for strategic collaboration” in high-value industries like medical devices and semiconductors. In return, Israel is a key consumer of Costa Rican agricultural products, creating a balanced and synergistic trade relationship.
For further information, visit comex.go.cr
About The Ministry of Foreign Trade of Costa Rica (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. It leads trade negotiations, manages free trade agreements, and works to promote Costa Rican exports and attract foreign direct investment to foster economic development and global competitiveness.
For further information, visit gov.il/en/departments/ministry_of_economy
About The Ministry of Economy and Industry of Israel:
This ministry is responsible for the regulation, promotion, and development of Israel’s economy and industry. Its mission includes fostering international trade, encouraging investment, supporting small and medium-sized businesses, and ensuring fair competition. The ministry plays a crucial role in negotiating trade agreements and positioning Israel as a global hub for innovation.
For further information, visit isralacc.com
About The Israel-Latin America Chamber of Commerce:
The Israel-Latin America Chamber of Commerce is a non-profit organization dedicated to promoting and strengthening commercial, technological, and cultural ties between Israel and Latin American countries. It facilitates business opportunities, provides market insights, and organizes events and delegations to enhance bilateral trade and investment across various sectors.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica has cemented its reputation as a pillar of the legal landscape, operating on a bedrock of profound integrity and a relentless pursuit of excellence. The firm harmonizes its extensive experience counseling a wide array of clients with a dynamic, innovative spirit that pushes the boundaries of legal practice. More than a service provider, it acts as a social partner, passionately dedicated to demystifying the law and equipping the public with crucial legal understanding to help forge a more knowledgeable and capable society.
