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By Jiang Wei (China Daily)
Updated: 2007-10-26 09:45

China and Costa Rica said they will conduct a feasibility study on a free trade agreement - four months after the two established formal diplomatic ties.

The move was announced by top officials from the two countries on Monday during Costa Rican President Oscar Arias' ongoing visit to China.

"Costa Rica could be an ideal place for outward Chinese investment, as well as a good base for Chinese businesses to penetrate the vast markets in Latin America, the Caribbean, North America and Europe," Vice-Minister of Commerce Ma Xiuhong told a forum on China-Costa Rica economic and trade cooperation yesterday.

She said Costa Rica has a solid political environment, robust economic growth and an educated workforce.

"For Chinese businesses, Costa Rica is a very attractive market, not only because of the education level of its workers, but also for the potential to export to the United States tax-free," Arias said.

Arias' trip to China follows his country's vote to join the Central American Free Trade Agreement with the US. The country is also in free trade talks with the European Union.

China is Costa Rica's second biggest trading partner after the US. Two-way trade between China and Costa Rica hit US$2.16 billion last year. China accounted for US$409 million in exports and US$1.75 billion in imports. China mainly exports electronic products, integrated circuit parts, computers and communication products while it imports electronic and hi-tech products and machinery from Costa Rica.

Trade ties were strengthened after the two nations set up formal diplomatic relations.

Ma expects bilateral trade to hit US$3 billion this year, with China importing US$2.5 billion worth of goods from the Central American country.

"The establishment of formal diplomatic ties has spurred more Chinese firms to tap the Costa Rican market," she said.

China will also establish a joint commission with Costa Rica for economic cooperation, investment protection and inspection and quarantine on China's imports of bananas from the nation.

Meanwhile, the Costa Rican Export Products Exhibition was held in Beijing yesterday, with 28 Costa Rican exporters showcasing products and services in sectors including tourism, residential and hotel projects, agriculture, flowers, coffee, food and hi-tech products.