Caribbean & Central America - April 2016 (ISSN 1741-4458)

Investment promotion agreement with China approved. On 29 March,Costa Rica’s 57-member unicameral legislature approved an agreement to promote and protect investment with Chile.

According to a press release by President Luis Guillermo Solís’s Partido Acción Ciudadana (PAC), the agreement includes a legal framework for bilateral investment which covers areas like promotion and protection of investment; expropriation; compensation for damages and losses; and resolution of differences between parties, among other things.

According to the most recent figures from Costa Rica’s foreign trade ministry, bilateral trade reached US$2.05bn in 2014 (out of Costa Rica’s total trade of US$28.49bn that year). Of the US$2.05bn, which was up 4.1% on 2013, imports accounted for US$1.7bn.

The two countries signed a Free Trade Agreement (FTA) in 2011 after establishing diplomatic relations in June 2007. Costa Rica remains the only country in Central America to have diplomatic relations with mainland China rather than with Taiwan.

The same figures from Costa Rica’s foreign trade ministry show that Chinese foreign direct investment (FDI) in Costa Rica reached US$9.8m in 2014 (out of the total US$2.18bn FDI received by Costa Rica). Chinese FDI in Costa Rica amounted to US$6.1m in 2013 and US$4.8m in 2012.

• FDI

On 31 March,Costa Rica’s central bank (BCCR) published foreign direct investment (FDI) figures for 2015 which showed FDI inflows reached US$2.85bn in 2015, up 3.7% from 2014. However, the figures incorporate a new methodology which revise up the amounts previously registered. For example, the new 2014 figure was US$2.75bn instead of US$2.18bn while the revised 2013 figure was US$3.09bn, up from US$2.68bn.