COMMON DREAMS

Colombia 2015 | DIPLOMACY | GUEST SPEAKER

TBY talks to President Luis Guillermo Solís Rivera, President of Costa Rica, on ramping up bilateral trade and cooperation, the role of the Pacific Alliance, and the value of free trade zones.

Luis Guillermo Solís Rivera
BIOGRAPHY
Luis Guillermo Solís Rivera studied history at the University of Costa Rica, and later on, did his Master’s in Latin American Studies at Tulane University, US. For 30 years he has held academic positions, both in the University of Costa Rica and at the National University, and was a Guest Professor at the Universities of Michigan and Florida (USA). He was an official at the Ministry of Foreign Affairs between 1986 and 1990 and worked closely in the formulation and negotiation of the Peace Process for Central America. He worked for the Latin American Faculty of Social Sciences, the Ibero-American Secretariat and the Foundation of External Services for Peace and Democracy (Fundapem). In the 1990s, he was ambassador of Costa Rica for Central America Affairs and Director of Foreign Policy. He has published over 10 books and dozens of articles for specialized newspapers and magazines.

In 2013, the commercial volume in trade between Colombia and Costa Rica exceeded $350 million, with $277 million in goods and services consumed in the Costa Rican market versus $79 million in Colombia. How can Costa Rica shift the balance of trade following the potential approval of the free trade agreement with Colombia?

The free trade agreement between Colombia and Costa Rica has been endorsed but it is not yet effective, as a chamber of the Colombian parliament has yet to approve it. It is a modern commercial agreement that establishes a legal framework with clear, stable and transparent rules. It provides trust and security to existing commercial and investment relationships. The agreement encourages a favorable environment for the development of new investments from both sides and for an increase in the levels of commerce and cooperation. Additionally, the treaty intends to strengthen the relationship with South American countries, given that Colombia has been the second destination for Costa Rican products exported in the region. The effectiveness of this free trade agreement would improve access the Colombian market and open new commercial opportunities for the current and potential offer of goods and service exports from Costa Rica. Moreover, it is a toll to promote and develop new investments, co-investments, and strategic alliances between productive sectors and, to create greater opportunities for consumers. It is a valuable instrument to open new exporting opportunities. However, the task of promoting exports and of coordinated management for trade maximization will allow the strengthening of the export capacity not only to Colombia, but also with all countries with which we have commercial agreements. Beyond the balance of trade, the main interest is to achieve a more inclusive commercial flow, in which a larger number of small and medium companies participate. In this sense, Colombia is a market with ideal conditions due to its size—comparable to Central America, its geographic proximity, and culture.

What would be Costa Rica's competitive advantage in its contribution to the Pacific Alliance and how would it benefit from becoming a member?

Regional economic integration is an essential element for our countries to progress towards greater economic and social development and better quality of life. In this framework, the Pacific Alliance should be seen as an alternative to propel growth and development, based on increasing the competitiveness of the economies concerned, and a deep integration that transcends the purely commercial aspect. This initiative offers the opportunity to establish strategic partnerships that favor the development of investments, increase real and effective competition, improve productivity and the competitiveness of goods and services, and facilitate commerce between countries, fostering better integration with other regions. Costa Rica has closely followed the Pacific Alliance as it gradually approached the initiative. As with other member countries of the Pacific Alliance, our country offers a pro-business investment environment that we continue to work on in order to improve and strengthen. Proof of this lies in our efforts such as the Moin Container Terminal and the modernization of ground crossings. We have development levels comparable with other member countries of the alliance and share a common vision of the role of commerce and the development of investment, as well as of the importance of cooperation as a catalyst for progress. We coincide in our end goal of promoting a deeper regional integration in order to achieve greater growth and to promote greater proximity to other regions, particularly Asia Pacific.

What could Colombia learn from Costa Rica's industrial reconversion program that would help encourage exports through free trade zones?

Free zones are a great appeal for those who wish to invest in our country. This system offers a series of fiscal benefits and competitive advantages that characterize our country: the talent and value of our workers, political stability and a strategic location. The attraction of direct foreign investment is associated to the promotion and diversification of exports, the search for improving and refining products manufactured in the country. The government offers benefits and incentives to companies and investors that are interested in settling in the country as long as they comply with the legal requisites and obligations.