Protectionism = Economic Losses


News from Panama / Wednesday, May 12th, 2021

As a result of the blockade that has been in place since July 2020 on the entry of animal products from Costa Rica into the Panamanian market, Costa Rican exports to Panama are reported to have fallen and companies such as Dos Pinos are reporting losses in the millions.

The trade conflict began when Panama informed the National Animal Health Service (SENASA), an agency of Costa Rica’s Ministry of Agriculture and Livestock (MAG), of the decision not to extend export authorization to a list of previously authorized Costa Rican establishments that have been trading in the Panamanian market for many years.

Although the Costa Rican government decided to send on January 11, 2021 a request to open the consultation mechanism to the World Trade Organization (WTO), the trade dispute has not yet been resolved.

After 10 months of trade conflict, Costa Rican sales to Panama have decreased and companies continue to report economic losses.

Data from the Foreign Trade Promoter (Procomer) specify that between 2019 and 2020, Costa Rica’s total exports to Panama decreased by 18%, going from $616 million to $502 million.

The figures detail that between the first quarter of 2020 and the same period of 2021 Costa Rican sales to Panamanian companies also decreased, in this case by 6%, going from $138 million to $130 million.

According to representatives of the Costa Rican Chamber of Exporters (Cadexco), the drop in Costa Rican exports destined for Panama, shows that commercial participation has been lost, which is difficult to recover in markets as competitive as the Panamanian one.

Nacion.com reports that “… the company Dos Pinos assured that its sales dropped by $50 million accumulated in the 10 months since July 1, 2020, during which Panama has maintained the closure to the entry of Costa Rican products, including milk and other goods.

The article adds that “… the Costa Rican economy that needs so much to be reactivated is losing very important foreign currency, such as those generated by the commercial exchange with Panama, Dos Pinos stated in a response.
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