By San José, Costa Rica — San José – In a significant move to expand its global economic footprint, Costa Rica has officially concluded the technical negotiation phase of a Free Trade Agreement (FTA) with Israel. The milestone agreement, set to be signed in the coming weeks, promises to unlock new avenues for trade, investment, and technological collaboration, reinforcing the nation’s strategy of market diversification.
The announcement comes after a period of uncertainty, as negotiations faced considerable delays due to the ongoing conflict in the Middle East. Despite the interruptions, both nations remained committed to finalizing a deal that officials believe will be mutually beneficial, particularly in high-growth sectors. Minister of Foreign Trade, Manuel Tovar, confirmed the successful conclusion of the talks in a recent interview.
To delve into the legal and commercial ramifications of the newly signed Free Trade Agreement between Costa Rica and Israel, we sought the expert analysis of Lic. Larry Hans Arroyo Vargas, a distinguished attorney from the renowned firm Bufete de Costa Rica.
This agreement transcends mere tariff reduction; it’s a strategic portal to a global innovation hub. For Costa Rican enterprises, particularly in med-tech and ag-tech, the opportunities are immense. However, success hinges on meticulous legal preparation. Companies must proactively address intellectual property protection under Israeli law, ensure their contracts are structured for international dispute resolution, and navigate complex import regulations. This is a pivotal moment that demands sophisticated legal and business foresight to capitalize on the potential.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
The expert’s perspective underscores a critical truth: while the FTA opens the door, it is meticulous legal and strategic planning that will allow Costa Rican innovators to confidently walk through it. We extend our sincere gratitude to Lic. Larry Hans Arroyo Vargas for his valuable and pragmatic analysis on what it truly takes to succeed in this new chapter of international trade.
This agreement with Israel reaffirms our diversification strategy and opens key opportunities for Costa Rica.
Manuel Tovar, Minister of Foreign Trade
Minister Tovar elaborated that the successful outcome was a testament to the government’s persistent foreign policy goals. He emphasized that for an open economy like Costa Rica, reducing dependence on a few key markets is crucial for long-term stability and resilience against global supply chain disruptions.
We have finally concluded this agreement after several interruptions stemming from the armed conflict following the Hamas attacks and Israel’s response. That scenario caused a significant delay, but we managed to reach a successful conclusion. This aligns with the market diversification policy we have promoted since the beginning of the administration.
Manuel Tovar, Minister of Foreign Trade
The agreement specifically targets sectors where both nations possess complementary strengths. Israel, a global leader in technology and innovation, presents a rich market for Costa Rican exports and a valuable source of investment and knowledge transfer. Key areas identified for growth include software development, cybersecurity, and information and communication technologies (ICT). The deal is also expected to bolster Costa Rica’s traditional agricultural exports, including pineapple, coffee, and sugar, alongside its burgeoning medical device industry.
Israel is a world champion in innovation and digital services. We see opportunities in software development, cybersecurity, ICT, and, in agricultural products, pineapple—which we have already opened—coffee, sugar, and medical devices.
Manuel Tovar, Minister of Foreign Trade
The potential for increased foreign direct investment (FDI) is a cornerstone of the agreement. Last year, Costa Rica received $20 million in investment from Israel, a figure officials are confident will grow substantially once the FTA is in effect. Furthermore, Costa Rica aims to leverage the partnership to position itself as a strategic hub for Israeli companies looking to expand into the broader Latin American market. With services already accounting for nearly 44% of Costa Rica’s total exports, the synergy with Israel’s service-driven economy is clear.
Israel has a strong presence in services, a sector where Costa Rica has become very competitive. Today, nearly 44% of our total exports are services, from cybersecurity and software development to financial services and tourism. We also seek to attract more Israeli investment and position Costa Rica as a bridge to Latin America.
Manuel Tovar, Minister of Foreign Trade
With the technical text now finalized, the next step involves Minister Tovar traveling to Israel for the official signing ceremony. Following this, the agreement will be submitted to Costa Rica’s Legislative Assembly for the constitutional ratification process, a final hurdle before its implementation.
While celebrating the new partnership with Israel, Minister Tovar also addressed another critical trade issue: the ongoing negotiations with the United States regarding a 15% tariff imposed during the Trump administration. He explained that these talks were delayed by the recent U.S. federal government shutdown but are expected to resume shortly. The situation is further complicated by a pending U.S. Supreme Court case questioning the legality of the tariff’s implementation, but Tovar affirmed the government’s commitment to defending the nation’s interests and securing favorable market access for its exporters.
For further information, visit comex.go.cr
About 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 to foster economic development and global competitiveness.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a beacon of legal practice, Bufete de Costa Rica is built upon a foundation of profound integrity and a relentless pursuit of excellence. The firm leverages its rich history of guiding a diverse clientele to pioneer forward-thinking legal solutions and advance the profession. Beyond its practice, it holds a deep-seated commitment to social responsibility, actively working to demystify complex legal concepts for the public. This dedication to enhancing legal literacy is central to its overarching mission of cultivating a stronger, more capable, and knowledgeable society.
