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Foreign and Military Affairs

Costa Rica, China draw up free trade pact

(Agencies)
Updated: 2010-02-11 10:58
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SAN JOSE, Costa Rica: Costa Rican and Chinese negotiators reached a free trade agreement on Wednesday, a key part of the Central American nation's drive to extend its web of trade pacts outside the Western Hemisphere.

President Oscar Arias is expected to sign the deal in April and then Costa Rican lawmakers must approve it.

President-elect Laura Chinchilla, who takes over from Arias in early May, will be short of a majority in the single-chamber legislature and will need support from opposition lawmakers to pass the law and make Costa Rica the third Latin American nation to seal a trade deal with China.

One of the two main opposition parties is pro-free trade, but the issue has been a tough sell in the past in Costa Rica, where the CAFTA regional trade accord with the United States narrowly passed in a 2007 referendum.

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The pact will lift duties on 99 percent of Costa Rican exports to China, including its high-quality coffee and other farm products.

"This wasn't an easy negotiation," Costa Rica's chief negotiator Fernando Obando told a news conference. He said China denied Costa Rica's request to include the Central American nation's sugar in the deal.

Under the agreement 90 percent of Chinese imports, including electronics and appliances, will be exempt from tariffs. Chinese-grown coffee is not included in the pact.

Chinchilla, who won a landslide election on Sunday, has said new trade deals will be a priority for her administration, which begins on May 8.

Costa Rica follows Chile and Peru in reaching an agreement with China as it aggressively pursues new trade deals to open its agricultural and tourism-fueled economy to new markets.

Foreign Trade Minister Marco Vinicio Ruiz said on Wednesday that Costa Rica was focused on forging more deals with Asia.

"It's evident that the United States and Europe, which are still our principal markets, are going to (grow) much more slowly than Asia," said Ruiz.

"Over the next 10 years, there's no doubt that Asia will have the importance of Europe and the United States, and that's fundamental for our economy," he told the news conference.

Costa Rica's bilateral trade with China was $1.58 billion in 2008, up from $80.3 million a decade earlier.

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