EXPANDING TRADE OPPORTUNITIES

Costa Rica 2019 | DIPLOMACY | INTERVIEW

Ecuador and Costa Rica lack the economies of scale to compete on a global scale, which is why both countries target niche markets and are further exploring the possibility of trade.

Pablo Campana Sáenz

What is your long-term strategy for Central America, and what role does Costa Rica play in Ecuador's relationship with the region?

Ecuador has agreements with several Central American countries, such as Nicaragua, El Salvador, and Guatemala, as well as a unilateral preferential list granted by Panama in the framework of the Latin American Integration Association (LAIA). These agreements were recently formed and although their value shall be assessed in the coming years, they have proven effective for promoting Ecuador's exports, particularly of products with added value. There is an ongoing negotiation with Honduras, and in order to consolidate our presence in Central America, we are currently exchanging information with the Dominican Republic and Costa Rica to further explore the possibility of expanding trade between us.

Both Costa Rica and Ecuador share the challenge of being vulnerable to the volatility of international markets in the trade of their agro-industrial commodity products. How could the two countries increase collaboration to strengthen value-added production chains?

Costa Rica, as much as Ecuador, does not have the territory that enables the economies of scale necessary to compete price wise, which is the case for the majority of their products. In this light, our targets are specialty markets, and in terms of agricultural products we target gourmet markets. These niches are less sensitive to volatility and therefore to price fluctuations. Combining this approach with appropriate differentiation strategies, such as denominations of origin, sectoral brands, or certification marks, will land one in a small yet highly profitable market.