One of the biggest bummers in Costa Rica is their infamous import tax, a horrendous tax that is applied to so-called luxury items, such as boats, vehicles and electronics. A tax that makes these items VERY expensive. Anyone that has tried to import a vehicle knows how a $10,000 vehicle can quickly become a major investment and/or headache.
However, this week may have changed that. It is no secret that China has been wining and dining Costa Rica politicians for some time now and has forked out mucho dinero for such projects as a Chinatown in San Jose.
In April 2010 Costa Rica signed a free trade agreements with China, before this agreement the US accounted for almost half of Costa Rica imports. China is Costa Rica’s second largest trading partner and for the last five years has been dumping billions into Costa Rica by investments, bonds and aid, including a new soccer stadium.
However, last week (May 31st) lawmakers on passed a final version of Costa Rica’s Free Trade Agreement with China (CFTA). According to Foreign Trade Minister Anabel González this will help improve the lives of Costa Ricans by generating more jobs, consolidating access for products exported to China and expanding options for consumers.
This trade relationship is not new. From 2000-10, Costa Rican exports to China grew by an average of 37% each year, with imports from China increasing by 29% annually. It is very obvious that China wants to be Costa Rica #1 importer.
In 2000, this trade was worth $91 million, by 2010, it amounted to $1.27 billion, a huge increase. Once implemented (sometime in July) Costa Rica’s would see 99.6% of the country’s total exports enter China duty free. China has a nice list of cars (SUVs, sedans, pickup and vans) that may be exported to Costa Rica without the hefty import tax.
And it would allow Tico exporters to sell more than 4,000 products to Chinese consumers, including electronic components, produce, products, and raw materials like leather and canned juices.
So where does it get Costa Rican’s beside maybe the low-cost vehicles?
Well the first major concern is consumer awareness and protection.
- China does very little or nothing to police their exports.
- Costa Rica has little consumer protection laws and publicity for public awareness like the US has when products are deemed bad.
According to the Word Trade Organization (WTO) from January 1995 to June 2010, there were 563 complaints against China for dumping, or selling goods to other countries at unfairly low prices, which has resulted in countless fines. According to Luis Obando, a trade advisor at Costa Rica’s Chamber of Industries.” China is not a partner of trust in trade matters.”
Otherwords, it is no secret that some of the exports of China have spark a bit of outcry and controversy.
- Toxic material in China exported drywall was discovered a few years back that was used in many commercial projects in Costa Rica
- Chinese-manufactured toothpaste branded “Mr. Cool,” contained traces of diethylene glycol, a toxic chemical found in automobile brake fluid and antifreeze, which killed people in Panama when it turned up in cough syrup.
- Costa Rica’s Health Ministry in 2008, banned the sale of “White Rabbit” candies, when it was discovered they had high concentrations of melamine, a toxic compound used to make plastic.
- Melamine was also discovered in many of Chinese exported milk products that poisoned thousands of consumers included baby formula in 2008.
- Much of the pirated and/or counterfeited goods like, CDs, DVDs and pharmaceuticals come from China, and this may open the flood gates for blackmarketed goods in Costa Rica
Many claim, Chinese are not ethical when it comes to making money.
The United States requires labels on products to mark where it came from, but that is not necessary the case in Costa Rica. With most foods, companies are not required to label where ingredients come from, only where the food was packaged or processed.
It is the same old cliché, “Buyer Beware,” will now apply to Tico consumers.
FREE trade agreements do NOT create jobs or growth. Just ask the Mexicans. NAFTA exploited and impoverished and did not create substantial job growth. See the new documentary Thrive! by Foster Gamble (of the Proctor and Gamble family). It explains very well why these things do NOT work.
Faulty Chinese appliances are responsible for 1,000’s of house fires a year according to Consumer Reports. http://abclocal.go.com/ktrk/story?section=news/consumer&id=8529074
Do we have that to look forward to here in CR?
All these things happened first in the U.S.; in fact, many of us are convinced that the U.S. is owned by Chinese bonds and other financial instruments. It is too bad that we consumers are so easily swayed by lower costs. Nothing that is given with one hand doesn’t have the other hand attached. The poisons that are imported to Costa Rica will end up in the landfills, leach in the ground water and cause increased cancers. What is best about Costa Rica will be lost forever. World domination? Can England protect Costa Rica from the Chinese if what is really wanted is to make Costa Rica an extension of China?
Nothing is for free, so was the chinese “gift” of the new stadium.