Costa Rica Demands El Salvador Comply with CAFTA

EspañolCosta Rica’s Ministry of Foreign Trade (COMEX) has filed a claim against El Salvador before an arbitration panel, citing the Salvadoran government’s refusal to comply with provisions of the Central America Free Trade Agreement (CAFTA). According to a Costa Rican press release, El Salvador refused to apply trade preferences to “goods coming from Costa Rica, including those produced under special exportation specifications.” CAFTA consists of the Dominican Republic, all of Central America, and the United States.

According to Costa Rica’s government, El Salvador is interpreting the agreement to mean it is required to “apply preferential tariff treatment to goods originating from the United States, despite the fact that provisions of CAFTA apply to all.”

The statement further explains that the situation has generated legal uncertainty among economic actors and has had a significant commercial impact. According to COMEX, Costa Rican businessmen that export to El Salvador, such as fruit juice producers, are being severely affected by the situation.

Following the mechanism of dispute resolution established by the CAFTA agreement, Costa Rica and El Salvador have carried out bilateral discussions. The two countries held a meeting with the Free Trade Commission in 2013, but were unable to reach an agreement. CAFTA was signed on August 5, 2004, and went into full effect on March 1, 2006, in most of the member countries.

Source: El Faro.

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