Costa Rica:

Costa Rica is open to foreign trade which represents approximately 66% of the country’s GDP. Costa Rica
has several trade agreements with several countries in different continents. Costa Rica is a member of
CARICOM and has several trade agreements with numerous countries, including the EU, Peru, China,
Singapore, and the countries in Central America. However, the main trade partners of Costa Rica are
United States, China, Guatemala, Mexico, the Netherlands, Belgium, Panama, and Germany. The
country is also in process of becoming a full member of the Pacific Alliance. The government's main
priority involving trade, however, is to become an OECD member. Over the course of time, Costa Rica
has employed free trade policies with various large economies. It has been beneficial for Costa Rica as
given indicated in table below:

After getting into free trade agreements with various large economies around the globe, Costa Rica has
witnessed a decline in trade deficit as exports are rising along the years. Imports have also declined a
little from 2018 -2019. Costa Rica mainly exports medical instruments and appliances, fruits, orthopedic
appliances, food preparations and coffee. The main imports of the country are petroleum oils,
medicaments, and motor vehicles, electrical apparatus for line telephony, and instruments and
appliances used in medical, surgical, dental or veterinary sciences. During 2020 exports saw a decrease
by 15.5% during COVID which is expected to rise in 2021 by approximately 7.1%, while the volume of
imports decreased by 7.3% and is expected to rise in 2021 by 5.6%.
Due to free trade, there are no significant trade barriers affecting the entry of most goods and services
into Costa Rica. Customs duties are relatively low, and in general do not exceed 15% - with the exception
of dairy products, livestock and agricultural products. Costa Rica confirmed the Central American Free
Trade Agreement (CAFTA-DR) with the United States in 2009. This international alliance wiped out the
vast majority of the taxes for non-agricultural imports and has made both trade and investment in the
area more appealing to U.S. companies. The leftover taxes on essentially all U.S. horticultural items were
to be wiped off by 2020. Current issues incorporate Costa Rica's tenacious fiscal deficit, smothering
administration, the significant expense of energy, the condition of essential foundation and the effect of
the worldwide COVID 19 pandemic. Plans are set up for significant redesigns including rail, ports, air
terminals, roadways and water frameworks. The World Bank's "Simplicity of Doing Business 2020"
positioned Costa Rica 74 out of 190 nations worldwide as far as conditions for opening and operating
business. In 2019, exports of goods was USD 11.8 billion, while imports equaled USD 16.1 billion, coming
about on an import/export imbalance of USD 3.8 billion. Concerning the services trade, the imports
added up to USD 4.1 billion and the exports to USD 9.4 billion, accordingly Costa Rica was a net exporter
in 2019. The trade deficit is because of the way that an enormous extent of exports rely upon imported
contributions, as well as the dependence on imports of consumer goods. As indicated by gauges, Costa
Rica ought to keep an import/export imbalance over the medium-term.
Chile:
Chile has a very open economy, highly dependent on international trade, which represented 56.8% of
the country's GDP in 2019, a slight decrease compared to 2018 (World Bank). It usually exports goods
such as copper, fish fillets and other fish meat, wine, and fruits for e.g. apricots and peaches. On the
other hand, its importing goods are petroleum oil, motor cars, petroleum gas and automatic data
processing machines.

Over the course of history, Chile has been employing free trade policies with many large economies
which has resulted fruitful for the Chilean economy as indicated by the table given below.

Main Customers (% of exports) – 2019 Main Suppliers (% of Imports) - 2019

China -32.4% China – 23.8%

United States – 13.6% United States – 19.3%

Japan – 9.1% Brazil – 8.1%

South Korea - 6.7% Germany 4.0%

Brazil – 4.5% Japan – 3.5%

Chile has witnessed a positive trade balance due to trade agreement with countries like China, United
States, Japan, and other big economies. With the help of free trade, it has experienced a great increase
in its exports which can be indicated by the graph below.
Chile has tried many different anti-protectionism policies over the years. During the 1960’s, Chile was
one the most protectionist country in the world and due to that it had a very stagnant growth, with no
major increase in its trade balance. This was caused because economy wasn’t taking complete
advantage of its resources and wasn’t engaging in trade efficiently. Consumers were left with limited
choices produced by local producers, this also caused a reduction in their trade balance. Chilean export
goods became expensive and less market competitive due to high tariffs and duties. This approach kept
Chile behind other countries in terms of trade and resulted in adverse relationship with other countries.
Although recently Chile has experienced a great increase in its trade balance after adopting free trade
policy. Chilean copper and metal are in great demand in global market which has significantly increase
its export recently.

References:
https://www.nordeatrade.com/en

https://www.trade.gov/

https://www.thecentralamericangroup.com/costa-rican-free-trade-agreements/