Israel and Costa Rica to Sign Free Trade Agreement
Israel and Costa Rica will formalize a Free Trade Area (FTA) Agreement on Monday, December 8, 2025, at 11:00 AM. The signing will take place at the Ministry of Economy and Industry in Jerusalem, with Israel’s Minister of Economy and Industry, Nir Barkat, and Costa Rica’s Minister of Foreign Trade, Manuel Tovar Rivera, attending.
Agreement Aims to Boost Exports and Lower Living Costs
Minister Nir Barkat will sign the agreement with Minister Manuel Tovar Rivera as part of Israel’s strategy to expand global trade. The move aims to strengthen Israeli exports, deepen economic ties with a growing Latin American economy, and reduce consumer prices in Israel through major tariff cuts.
Barkat described Costa Rica as a “natural trade partner,” noting its OECD membership and strong support for open markets. He added that the FTA will open new business opportunities, diversify export destinations, and support economic growth in both countries.
Strategic Step in Israel’s Expanding Trade Policy
The agreement follows Israel’s recent decision to begin FTA negotiations with India and comes one week before the arrival of Germany’s Minister for Economic Affairs and Energy. Together, these initiatives highlight the Foreign Trade Administration’s growing role in shaping Israel’s international economic policy.
Significant Benefits for Israeli Exporters
The new FTA gives Israeli companies a clear advantage in the Costa Rican market, where only about 2.5% of tariff lines currently receive exemptions. Once the agreement takes effect, 99% of Israel’s main export products to Costa Rica will receive tariff relief and improved access.
At the same time, Israeli consumers will see lower prices on Costa Rican imports such as tropical fruits, nuts, honey, vegetables, and industrial raw materials. Increased competition and a wider product range are expected to support efforts to lower the cost of living.
Key Elements of the Agreement
1. Major Tariff Reductions
-
Over 90% of tariffs will be eliminated immediately.
-
About 95% of traded products will benefit from the agreement.
-
Lower import costs are expected to reduce prices on food, raw materials, and industrial equipment.
2. Simplified Trade Procedures
The agreement introduces:
-
A “Declaration of Origin” instead of a Certificate of Origin
-
Recognition of software as part of manufacturing
-
Flexible rules of cumulation
-
Updated mechanisms to support modern global supply chains
These changes will shorten processing times and increase the competitiveness of Israeli industries.
3. New Framework for Trade in Services
For the first time, Israel and Costa Rica will regulate services trade. The agreement allows:
-
Remote service delivery
-
Secure and open digital trade
-
Recognition of electronic signatures
-
Equal access for Israeli service suppliers
4. Complementary Economic Strengths
Israel’s leadership in technology, agri-tech, and industrial equipment matches well with Costa Rica’s strong agricultural and manufacturing sectors. This combination provides a strong foundation for expanded cooperation.
Negotiation Process and Future Potential
The Foreign Trade Administration led the negotiations with support from several government ministries and regulatory bodies. After two intensive negotiation rounds and numerous professional meetings, the sides reached a final agreement.
Israeli exports to Costa Rica currently average around $32 million annually. Officials expect this figure to rise once the agreement opens additional markets and export fields.
Costa Rica holds 18 trade agreements with major global blocs—including the EU, US, China, and South Korea. Aligning with these frameworks places Israel in a stronger position compared to other exporting countries.
The agreement will undergo a formal ratification process before entering into force.
Official Statement
Roi Fisher, Director of the Foreign Trade System, called the agreement an important achievement for Israeli industry. He noted that exporters will gain access to a market with high tariffs, giving them a clear competitive edge. Fisher emphasized that Israel and Costa Rica complement each other in technology, agriculture, and manufacturing, creating meaningful opportunities for both sides.
NEWS DESK
PRESS UPDATE