BizCLIR

Although to some extent Costa Rica is still dependent on agricultural production and exports —sugar, bananas, coffee, fruits, flowers, ornamental plants — and on textiles and clothing, the country has been successful in developing a thriving manufacturing sector. Investors benefit from the largely educated workforce, the relative stability of the country, and its democratic tradition. Costa Rica expanded its economy in the late 1990s to include strong technology and tourism sectors. In the late of the 1990s, Costa Rica’s foreign trade showed a clear upward trend, with growth in the trade in goods totaling 7.65 percent between 2000 and 2004, while agricultural exports fell from 68 percent of total exports of goods in 1995 to 23.4 percent in 2004. This major shift in agricultural exports was mainly due to the establishment of Intel Corporation’s US$200 million microprocessor finishing and testing facility, a general increase in industrial exports, and the stagnation in the world price of traditional agricultural exports such as coffee. In the agriculture sector, coffee continues to be the most important export, although the country also exports melons, pineapples, foliage and ornamental plants, among others.

The main destination of Costa Rican exports continues to be the United States. The share of exports of goods to the United States was 42.2 per cent in 2004. In addition, the launch of the free trade agreement between Costa Rica and Mexico coincided with a significant increase in trade between the two countries, representing an increase of Costa Rican exports to Mexico from 0.6 per cent of all goods exported in 1995 to 2.1 per cent in 2003. Modular circuits, palm oil, textiles, and aluminum sheets and wire were the main goods exported to Mexico.

The European Union continues to be the second destination for Costa Rican products, although its relative share has declined perceptibly, falling to just more than 17 percent in 2004. In the European Union, the strongest trading partners with Costa Rica are the Netherlands and the United Kingdom. Both countries have significantly increased their imports, representing 60 percent of Costa Rican exports to the European Union.

However, the products traditionally exported to the European Union, coffee and bananas, have declined in relative importance vis-à-vis modular circuits and other nontraditional goods such as pineapples, ornamental plants and foliage, melons, and prawns.