Panama is Urged by Costa Rica to Move ‘From Good Intentions to Action’ to Resolve the Trade Dispute

Costa Rica recently escalated a long-standing agricultural trade dispute by calling for concrete action from Panama to remove bans on Costa Rican exports. The long-running conflict involves several core issues and countermeasures:

• The Core Dispute: Since 2019 and 2020, Panama has blocked key Costa Rican agricultural products (including meat, dairy, bananas, and strawberries).

• The WTO Ruling: In late 2024, a World Trade Organization (WTO) panel ruled that Panama’s sanitary and phytosanitary restrictions on Costa Rican goods were unjustified. Panama appealed the decision.

• The Recent Escalation: Following declarations by Costa Rica’s newly sworn-in president, Laura Fernández, demanding an end to the “commercial blockade,” Panamanian President José Raúl Mulino abruptly suspended electricity sales to Costa Rica as a retaliatory measure.

• Current Status: Business groups and exporters on both sides are demanding a swift resolution to the stand-off to avoid regional supply shortages. Both countries agreed to a diplomatic truce at the UN and are aiming to establish a joint working agenda covering trade and customs.

Costa Rican Foreign Minister Manuel Tovar pictured above stated that his country is still awaiting a response from Panama to move forward in resolving the trade dispute that has pitted the two nations against each other over restrictions on Costa Rican agricultural products, mainly dairy and meat.  “We haven’t been able to discuss the issue beyond the discussions of the hemispheric challenges we are facing here in the region,” he said.