San José, Costa Rica, since 1956

Canadians Seek New Trade Opportunities

CANADA’S State Minister for New and Emerging Markets, Gar Knutson, visited the country this week accompanied by representatives from more than 20 Canadian companies seeking a closer look at the trade and investment opportunities in Costa Rica and the rest of Central America.

“Prime Minister Paul Martin is committed to forging partnerships with other regions of the world,” Knutson said Wednesday during a luncheon organized by the Canadian Embassy and the Canadian-Costa Rican Chamber of Commerce (CanCham).

“As part of my mandate as Minister of State for New and Emerging Markets, Martin asked me to raise Canada’s profile in expanding and dynamic markets like Central America.

“And this is why I am here today with over 20 Canadian business delegates from small, medium and large companies, which are eager to introduce their goods, services, capital, people and knowledge to markets in Costa Rica and throughout Central America,” he explained.

THE visit was part of “Central American Circuit 2004” – a seven-day Canadian commercial mission to Guatemala, El Salvador, Costa Rica and Panama organized by Canada’s Department of Foreign Relations and International Trade and the Canadian Trade Commissioner Service.

“We have never received a Canadian commercial mission of this size and importance,” said Louise Léger, Canadian Ambassador to Costa Rica.

Knutson highlighted the important role trade plays in the Canadian economy.

“We are here today in the interest of developing trade partnerships,” he explained. “Canada is a trading nation. In 2002, the export of goods and services represented more than 40% of Canada’s gross domestic product (GDP) – a figure that is approximately four times as much as those of the United States and Japan, making Canada the number one exporter in the G7.”

He stressed the role trade has played in strengthening Canada’s relationship with Central America and especially Costa Rica.

“Partnership through trade is what has brought us here today,” Knutson said. “Canada understands the importance of fostering this relationship and is committed to doing so.”

IN recent years, Canada has strived to develop strong permanent trade relations with Costa Rica and the rest of Central America.

“Two-way trade between Canada and Central America reached about $970 million in 2003, of which trade with Costa Rica accounted for more than a third,” Knutson said.

In 2002, Costa Rica and Canada began negotiating a bilateral trade agreement –the first in the Western Hemisphere between a G7 country and a developing country. The free-trade agreement was signed on April 23, 2001, and went into effect on Nov. 1, 2002. Since then, trade and investment between both countries has continued to grow.

“The goal of today’s activity is not just to hold meetings between business leaders from both countries, but to celebrate the free-trade agreement our countries have signed,” Léger explained. “Trade between both countries is growing and so is investment.

The free-trade agreement has been a great success.”

Canada has attempted to recreate its experiment with Costa Rica by negotiating a free-trade agreement with Guatemala, El Salvador, Honduras and Nicaragua.

However, the negotiations, which began on Nov. 21, 2002, fell into a stalemate after a negotiating meeting held last month in the Canadian capital of Ottawa (TT, Feb. 27).

TWO-WAY trade between Costa Rica and Canada grew 61% between 2001 and 2003, increasing from $161.2 million to $259.1 million, according to Costa Rica’s Foreign Trade Vice-Minister Gabriela Llobet.

During 2003 – the first full year after the agreement went into effect – Costa Rica exported $194.1 million to Canada – 23.9% more than during 2002.

Costa Rica maintains a large trade surplus with Canada, which exported $44 million to the country last year (TT, Feb. 27) according to the Foreign Trade Promotion Office (PROCOMER).

Llobet’s numbers were more optimistic than PROCOMER’s. She estimated exports in 2003, including services, totaled $210 million and had grown over the last year by as much as 34.4%.

“This means that for every dollar Canada exports to Costa Rica, Costa Rica exports slightly more than $4 to Canada,” Llobet said.

Agricultural products make up 60% of the country’s exports to Canada. The main agricultural exports to Canada are bananas, pineapples, sugarcane, melons, green coffee beans, heart of palm and flowers (in that order). Top industrial exports are computer integrated circuits, needles, syringes and other medical equipment (in that order). Recently, the country also began exporting jams and mini-vegetables, Llobet said.

Canada’s main exports to Costa Rica are press paper, potassium chloride, paper for sacks and nylon-textured threads, according to PROCOMER.

CANADIAN foreign direct investment (FDI) in Costa Rica has also grown dramatically in the years since the reciprocal protection and promotion of investments agreement both countries signed went into effect on May 25, 1999.

Canada is the country’s third-largest provider of FDI after the United States and Mexico, according to Llobet. Between 1995 and 2003, Canadian companies invested $126 million in the country. Last year, Canadian-based firms invested $16 million.

“Trade is only one aspect of our relationship,” Knutson said. “Canadians are demonstrating they understand the benefits of investing in Costa Rica and throughout the region.”

During his speech, Knutson made a quick recount of the main Canadian firms that have invested here. Among the firms he mentioned were Air Canada, which last December began direct flights between Juan Santamaría International Airport and Toronto (TT, Dec. 5, 2003), the Four Seasons hotel chain, which in January opened a luxury beach resort on the Gulf of Papagayo in the northwest province of Guanacaste (TT, Jan. 23), SNC-Lavalin, the firm that was awarded the concession to build and operate a highway connecting San José to the Pacific shipping port of Caldera (TT, Jan. 23) and Glencairn Gold Corporation, which is funding a gold mining operation in the Central Pacific region of Miramar (TT, Jan. 30).

“Canadian companies are not just good partners, they are responsible partners,” Knutson said. “Promoting corporate social responsibility is an important element of the Canadian government’s approach to promoting international trade and investment. By operating in a socially responsible manner, Canadian companies contribute positively to the communities in which they operate.”

MEMBERS of the mission praised the country.

“Costa Rica is very proactive and one of the strongest countries in the region, in terms of attracting trade and investment,” said Robert Daignault, chairman of the board of Cogenergy, a company specializing in the generation of electricity from the clean disposal of waste products.

Daignault stressed the importance of commercial meetings and business summits.

“These particular missions bring a level of awareness between the commercial sector of both countries of the opportunities available. It’s an opportunity to exchange ideas and information about products, services and technologies that are available,” he said.


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