WTO creates panel to resolve trade dispute between Costa Rica and Panama

RIO DE JANEIRO, BRAZIL – The World Trade Organization (WTO) agreed today to form an arbitration panel to resolve the dispute between Costa Rica and Panama over the latter’s restrictions on imports of Costa Rican agricultural products.

The organization’s Dispute Settlement Body decided today to form this panel in response to Costa Rica’s second request after Panama blocked the first request at the August 30 meeting.

Costa Rica argues that in the past two years, Panama has banned “without scientific basis” the importation of certain Costa Rican imports, including dairy products, meat, sausages, fish, and fruits such as strawberries and pineapples or bananas.

San José emphasizes the “long and prosperous” commercial relationship between the two neighboring countries and argues that the prohibitions are not justified because the phytosanitary status of their products has not changed during this time.

According to sources close to the WTO, Panama maintains that the dispute has its origin in Costa Rica’s failure to renew the necessary procedures to continue exporting its products and regrets that San José has taken the trade dispute to the WTO.

The dispute settlement process before the WTO began last January with a request for bilateral consultations, which always give way to a third-party dispute settlement panel if an agreement cannot be negotiated.

If the WTO were to participate in the dispute, the Appellate Body, the body’s final instance, would ultimately be responsible for ruling on the case. Still, it has been paralyzed for almost two years due to the refusal of the United States to approve the appointment of new judges to the Appellate Body.