Costa Rica looks to Canada to safeguard rules-based trade, democracy in Latin America

Costa Rica is on track to become the first Central American state to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP, a trading bloc of 12 countries across the Pacific Rim, North and South America that will soon include the U.K.

Prime Minister Mark Carney has positioned the bloc as a global alliance that can work alongside the European Union against Chinese and American coercion — part of a strategy he outlined in January in a much-publicized speech at the World Economic Forum in Davos, Switzerland.

Costa Rica, a country of just five million roughly the size of Nova Scotia, is an important partner for Ottawa on initiatives like feminist approaches to economic growth and promoting anticorruption practices.

In 2021, with Canada’s support, Costa Rica became the first Central American country to join the Organization for Economic Co-operation and Development, or OECD, a group of 38 rich democracies. The country is powered almost entirely by renewables and hydroelectricity.

Costa Rica’s move to join the CPTPP bloc might expand trade with Canada in services, investment and government procurement, which were not part of the bilateral agreement both countries signed in 2002.

That could mean more Canadian exports of wheat and sugar to Costa Rica, according to an industry consultation led by Ottawa. It could also lead to a boost in Canadian tourism.

But joining the bloc is also about trying to uphold global rules-based systems, Tovar Rivera said.

U.S. President Donald Trump’s tariffs have hit countries around the world hard — especially those like Costa Rica and Canada which rely on American investment and exports to the U.S. Almost half of Costa Rica’s exports go to the U.S., while the U.S. accounts for more than two-thirds of Canada’s total exports.

Costa Rica has courted Chinese investment with mixed success, with a promised highway expansion and oil refinery facing legal disputes. Beijing has threatened to suspend other projects after Costa Rica sought to bar China’s state-owned telecom Huawei from 5G contracts, citing cybersecurity risks.

Even before Trump returned to office, the World Trade Organization was hamstrung due to the U.S. refusing to allow the appointment of dispute-resolution judges and China’s non-market policies undermining the body’s rules. Both countries are widely blamed for years-long WTO reform processes falling flat.

“There are many sinners who have committed many sins,” said Tovar Rivera. “We will continue to fail to advance the reform of the WTO if we continue doing business as usual.”

He cited Carney’s “very frank” Davos speech about rejecting hegemonic powers acting to undermine institutions like the WTO. Tovar Rivera interpreted this as a call to reform institutions rather than disregard them.

“The rules-based system that we have in place — although it can be certainly improved and needs major reform — it helps secure global peace and security. It helps bring people out of poverty,” he said.

Tovar Rivera argued Canada can shore up multilateralism by promoting rules-based trade and democracy with more partners in Central and South America.

“I would like to see in the near future a Canada-Latin American agenda that we can work on, identifying areas of mutual interest for co-operation, for further engagement, for economic development (and) also security issues,” he said.

Tovar Rivera said this would include addressing a series of regional issues — which happen to be ones Washington has made central to its policies for the Americas.

“We know that there is a reality out there. The big focus of the international discussions will be … the security and resilience of supply chains, how to combat illicit trade, drug trafficking, illegal migration and all those vices that come along with it,” he said.

He said that does not mean abandoning climate change or feminism — values the Trump administration has rejected. “They will continue to be more relevant as time goes by,” he said.

Tovar Rivera also argued countries in Latin America need good governance and economic growth in order to stem migration flows. A richer, more democratic region means fewer asylum claimants fleeing to other countries, including the U.S. and Canada, he said.

He also argued stronger supply chains within the Americas would help limit the risk of powerful countries manipulating economic conditions.

“The most important thing is … how can those that are willing to move forward do so, without others trying to impede or obstruct that advancement,” he said.

The Canadian Council for the Americas made the same point last November in a report that urged Ottawa to seize on the economic and diplomatic potential of South and Central America, largely by using existing relationships and trade deals.

The report said that requires a shift beyond thinking of Latin America as a group of commodity markets, and demands instead a focus on building processing capacity for agricultural goods, selling Canadian expertise in cybersecurity and beefing up policing at Canadian ports used to traffic narcotics.