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Costa Rica is a dynamic, developing economy whose total population and territorial extension is a bit more than 12% and 0.5% of those of Canada. The country stands out as an important provider to Canada of several products, and opportunities exist for Canadian and Costa Rican businesses alike to further develop their trading relationship.

All of the products Costa Rica exports to Canada are part of more than 350 customs sub-sections (cluster of products) and are currently offered to the Canadian marketplace through more than 130 firms, the majority of which are micro, small and medium sized companies, that have successfully linked to their Canadian counterparts (see chart below).

The strength of this trade relationship is even greater due to the existence of a Free Trade Agreement between both countries, which grants benefits both to Canadians as well as Costa Ricans, thereby stimulating bilateral trade. This treaty was signed on April 23, 2001 in Ottawa and went into effect as of November 7, 2002. It has represented, according to the evaluations carried out by Costa Rican authorities, a significant improvement in and liberalization of new trade opportunities for both nations.

It’s worthwhile asking how such a small country – which is traditionally known for its attributes of peace, democracy and concern for the environment – has been able to so successfully enter this market. The answer is found in the deployment of a series of endeavors that have led Costa Rica to attain a fairly competitive, productive environment based on a highly educated work force, as well as in its constant search for opportunities for its products in external markets, the adjustment and improvement of the products to the tastes, preferences and habits of the consumers, and of course, implementing trade policies and attracting transparent investments (free trade agreements, local treatment of investment matters, among others).

In spite of the many successes reaped in the Canadian market, the task of positioning and strengthening the trade presence with Canada is still a priority, because the domestic exporting base is comprised of more than 4000 products and more than 2000 companies. For that reason, the effort of Costa Rican authorities and businesses to coordinate and create a greater trade volume between the two countries takes on greater importance. One of those efforts is reflected in the physical presence of Costa Rica’s Trade Promotion Office (PROCOMER) in Toronto, whose activities are centered on promoting the exchange of information to increase trade opportunities with Canadian businesses that wish to import products from Costa Rica.

Recent Exchange
The numbers at the close of 2009 indicate that Canadian imports from Costa Rica account CAN$ 358 million. Of that amount, the greatest portion corresponded to products from the agricultural sector but an important portion was centered on the electric and electronic industrial subsector, and in the subsector of precision and medical equipment.

It should be noted that Canadian imports from Costa Rica grew at an average annual rate of 9% during the 2002-2009 period, reflecting the importance of the free trade agreement between the two nations.

Opportunities under scrutiny
The current and potential Costa Rican exportable supply offers Canadian businesses opportunities to import products that reflect growing trends in Canadian lifestyles. For example, the increasing inclination of Canadians to incorporate healthier eating habits in to their life style opens opportunities for agricultural and agro-industrial products, whether they are traditional, certified organic or natural. In this respect, it should be mentioned that Costa Rica is not only a provider of commodities, but rather it has a diversified exporting base of intermediate products which could be clearly incorporated into the Canadian food industry and foodservice chains.

In these sectors, the Canadian importer also has the opportunity to work with small and mid-sized companies which, because of their size, have greater manufacturing flexibility. This becomes especially important when products have to be adapted and modified – from a presentation or packaging standpoint – or even the configuration of each one of them (flavor combinations and other specifications) to the particular preferences of Canadians.

This flexibility is of great importance to commercial success when the composition of the Canadian population is taken into account; since it integrates people of more than 200 different ethnic origins, 11 of which represent more than 1 million inhabitants each. This mixture in itself, promotes an interest in trying out new flavors and products, giving way to niche markets and specialized channels for ethnic products, which can be found in Costa Rica.

The greater and progressive incorporation of women into the labour market and the aging population demands the type of product availability that facilitates consumption (practical) and commonly this can only be conceived and improved from a close relationship with the provider, which should begin during the product conception stage itself. Costa Rican businesses have qualified, competent human resources and the flexible production processes that allow for development customization of products for the Canadian importer.¹

Other trends, such as the increased number of people eating out², represent additional opportunities that can be realized through the products supplied from Costa Rica. For Costa Rican producers that do not have the immediate possibility of positioning their own brands because they are frequently small and mid-sized companies, restaurants and food chains represents a possible niche.

In the service sector, Costa Rica is well positioned to supply specialized medical services (in great demand in Canada, not only because of its high purchasing power, but also because of the obvious interest in the health and the aging of its population), and as well as services in information technology.

There is enormous potential for growth in trade between Canada and Costa Rica, particularly in the products and services associated to health services and entertainment, the differentiated food industry (organic, healthy, ethnic), fresh products and intermediate products or raw materials for the Canadian industry (especially the food industry). Once again, the combination of an exportable supply based on knowledge and the environment unite to advantageously open a path to “green and intelligent” commerce which is increasingly evident and which can be heightened between Costa Rican exporters and Canadian importers.

To learn more about Canada-Costa Rica trade opportunities, be sure to attend any of these upcoming events: CRIW Costa Rica Investment World - April 14-15, 2010, an opportunity for investors to meet with businesses and learn about opportunities in Costa Rica; Buyers Trade Mission, September 2010, an opportunity for Canadian importers to view and learn more about Costa Rican products. For more information on any of these events, or to learn more about opportunities in Costa Rica, please contact Itzamn Huelat at 416-865-3382 or ihuelat@procomer.com.

¹ Specific juice formulas and juice bases, sauces and bases for sauces, development of innovative packaging, etc., are just some examples.

² It is estimated that on an average each Canadian home visits a restaurant, whether for a complete meal or a simple snack, nearly 536 times a year and spends approximately 24.5% of each dollar spent in food outside the home.