INTERVIEW WITH
Manuel Tovar Rivera Minister of Foreign Trade of Costa Rica, and President of the Costa Rican Foreign Trade Promoter (PROCOMER)
By Karim LESINA
Costa Rica has gained recognition as a leader in innovation, sustainability, and trade within the global economy. Could you share your perspective on how the country’s strategic vision has evolved to position itself as a key player in the digital economy and foreign trade landscape?
Costa Rica's vision has evolved to focus on innovation, digitalization, and sustainability. Internally, the country has designed public policies that prioritize these areas, while externally, it has aligned its international trade and investment strategy to reflect these priorities. By tapping into its skilled workforce, stable institutions, and commitment to sustainable development, Costa Rica has positioned itself as a hub for services, advanced manufacturing and other digitally enabled industries. This has helped the country maintain global competitiveness, particularly in the face of challenges like economic disruptions, geopolitical tensions, the Covid-19 pandemic, and the climate crisis.
Costa Rica's strategic approach emphasizes that trade, investment, and innovation are essential for global prosperity; and to foster a sustainable and equitable future. This vision not only positions Costa Rica as a leader in these domains but also facilitates collaboration with other nations, crafting human-centered policies to address the interconnected challenges of economic instability, social inequality, and environmental degradation. Ultimately, this strategic vision has led Costa Rica to get closer to like-minded partners and lead initiatives such as the Agreement on Climate Change, Trade and Sustainability (ACCTS) and to express interest in joining trade blocks such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and Pacific Alliance; as well as initiatives that will shape the future of digital trade, such as the DEPA.
Foreign Trade and Regional Integration: What are Costa Rica’s key foreign trade priorities for 2025, and how does the country envision its integration with initiatives like the Pacific Alliance while addressing potential challenges?
Costa Rica´s key foreign trade priorities for 2025 encompass actions that contribute to our strategy to continue expanding our access to world markets and the diversification of sources of foreign direct investment (FDI) in the country. Strengthening commercial ties through trade agreements creates opportunities in new markets and further deepens the diversification and sophistication of Costa Rica's exports of goods and services. Additionally, it facilitates the continued attraction of FDI in knowledge-intensive sectors such as medical devices, semiconductors, the Internet of Things, artificial intelligence, robotics, and R&D, among others.
The country aims to conclude negotiations of the Free Trade Agreement with Israel and promptly complete the negotiations to integrate in the CPTPP and the Pacific Alliance, likely in 2025. Each process will be conducted as usual by the Ministry of Foreign Trade, thus deploying a thorough process of information and consultations with all stakeholders, including all relevant government agencies, domestic producers, importers and exporters, etc. We are also ready to pursue concrete actions to help foster competitiveness of activities that may experience commercial frictions stemming from the deepening of trade liberalization with the Pacific Alliance members.
Attracting and Diversifying Foreign Investment: What factors make Costa Rica attractive to foreign investors, particularly in advanced manufacturing, and how is the government fostering productive linkages with local SMEs and diversifying investments into emerging sectors?
Costa Rica excels in attracting FDI, securing 7.9 times more FDI projects than its GDP suggests. Its success stems from democratic stability, skilled talent, strategic incentives, and a prime location. Over the past 30 years, Costa Rica transitioned from a commodity-based economy to a global hub for advanced manufacturing and tech services, hosting over 500 multinational companies. These companies, particularly in advanced manufacturing, integrate with local firms, boosting participation in global value chains. The semiconductor industry exemplifies this growth. With 25+ years of expertise, it has paved the way for advanced manufacturing. To sustain this momentum, Costa Rica launched a roadmap focusing on talent development, investment incentives, and regulatory improvements.
Costa Rica also simplifies business processes to attract FDI, ensuring legal clarity and streamlined public administration. Public policies like the National Cluster Program (NCP), led by government and academic stakeholders, foster alliances in key sectors like medical devices, aerospace, and cybersecurity, enhancing productivity, innovation, and employment. In addition, PROCOMER's Linkages Program connects multinational corporations with local suppliers through matchmaking and development initiatives. These efforts include financing, certifications, and collaborations to generate added value; and platforms like the “Encadenados” Program further promote partnerships between local companies and multinationals.
As a result of these efforts, the Central Bank of Costa Rica highlights the economic impact of Free Trade Zone companies, which purchase 38% more locally than other firms, demonstrating the effectiveness of these linkages.
Costa Rica’s successful conclusion of negotiations to join the Digital Economy Partnership Agreement (DEPA) marks a significant milestone in its integration into the global digital economy: What immediate and long-term benefits does Costa Rica expect from joining DEPA, and how will emerging technologies transform key sectors of the economy under this framework?
Joining DEPA will offer both immediate and long-term benefits to Costa Rica, particularly in the context of our growing digital economy and services exports. DEPA enhances Costa Rica’s access to global digital markets, simplifying digital trade and making it easier for exporters and importers of digital goods and services to reach global markets. In the long term, DEPA will strengthen Costa Rica's position as a global platform for high-quality digital goods and services and will foster collaboration on emerging technologies such as artificial intelligence and Fintech. Additionally, DEPA's rules endow the environment for FDI with greater legal certainty, particularly for the tech sector, all of which will serve to boost Costa Rica’s competitiveness and support the growth of small and medium-sized enterprises (SMEs). This will transform key sectors, particularly in technology and services, by driving growth, diversification, and international integration. Furthermore, Costa Rica’s connection to the Asia-Pacific region, a global leader in technology, finance, and trade, will open new opportunities for partnerships, knowledge sharing, and market expansion; thus, enhancing the country’s global position.
Export Growth and Emerging Sectors: What factors have driven recent growth in Costa Rica’s export sector, and which emerging industries show the greatest potential for expansion in the coming years?
When it comes to export growth, Costa Rica has a proven track record of embracing trade liberalization and economic integration, upholding international trade rules, being both a competitive and reliable trade partner. Costa Rica holds a robust trade platform comprised by 18 free trade agreements (FTAs) in force with key global economies (6 of the G7 countries) that gives access to 2/3 of the world´s GDP and over 2.5 billion consumers. As a country committed to opening new markets it has shown its ability to thrive in a competitive and liberalized trade landscape, successfully transforming its economy by expanding from agricultural products to advanced medical manufacturing, electronics, tourism, information technology (IT) and sophisticated business support services. This situation has also been fueled by strong FDI attraction policies, a highly qualified and skilled workforce and a focus on our sustainability.
These unique characteristics have propelled the growth of industries such as medical devices and life sciences, information technology and digital services. This strong country proposition has allowed for Costa Rica to seek investment expansion in new sectors such as green and renewable technologies. Additionally, Costa Rica has developed a strategy to strengthen the domestic semiconductor ecosystem and potentially attract new investment in this sector.
Future Competitiveness and Sustainability: How does Costa Rica plan to remain competitive in the global market, addressing challenges such as sustainability, digitalization, and the energy transition, while reaffirming its commitment to fair trade and sustainable development?
In terms of country competitiveness and its relation to sustainability, Costa Rica will continue leading with public policies and efforts that integrate commercial openness with sustainable, digital and fair trade. Meanwhile transforming the economy of the country to a diversified and more resilient one, Costa Rica has been able to increase women’s participation in the workforce, revert deforestation and to this date, have a 60% of forest coverage in the country, and maintain its competitiveness. On the one hand, Costa Rica has included chapters on trade and sustainable development, digital trade, gender and labor rights in its recent FTAs. On the other, it has become our country brand to balance economic growth and environmental sustainability, with 94.9% of our electricity coming from renewable sources, exceeding the OECD average.
Some examples of our recent agreements that speak to the balance of economic, digital and sustainable goals are the Global Trade and Gender Agreement (GTAGA), DEPA and the ACCTS. The latter is a one-of-its kind and forward-looking trade policy tool that establishes binding commitments to eliminate fossil fuel subsidies, reduce tariffs on more than 300 environmental goods, facilitating access to sustainable technologies, facilitating a framework for trade of over 100 environmental services, and promoting high integrity eco-labelling practices. This opens and prioritizes green growth and digitalization, while the country strengthens its position as a sustainable trade partner and diversifies its economy for long-term resilience.
As we look to the future, what is your message to the global community—partners, investors, and allies—about Costa Rica's role and aspirations in shaping a more sustainable, inclusive, and digitally integrated global economy?
Costa Rica’s trajectory and actions speak for what we believe in and what we aim for. It is undeniable that trade and investment policies have played a key role in propelling an outstanding transformation of the Costa Rican economy, and it is important to acknowledge as well that they can play a central role in fostering sustainability and inclusiveness. For example, the ACCTS is an innovative trade policy response to tackle climate change and enhance the prospects to benefit from green growth and investment. In addition, our integration in initiatives such as DEPA and the GTAGA is a strong bet to grant Costa Rica a privileged position in the digital economy and to bolster a more gender-balanced business climate, as means to ensure that new economic opportunities for prosperity leverage digital technologies and reach all groups of society.
Moreover, Costa Rica’s experience shows that even a small country can play a relevant role of constructive leadership in the international community, as long as its vision and aspirations are properly aligned with its core values. A clear example of this lies in that, after completing a successful accession process to the OECD and satisfying all post accession commitments in merely our first 3 years as a member, we went the extra mile and embraced the major challenge of chairing the organization’s 2025 Ministerial Meeting.