Israel and Costa Rica Sign Free Trade Agreement, Slashing Tariffs and Opening New Markets

Israel and Costa Rica signed a comprehensive free trade agreement in Jerusalem on Monday, introducing wide-ranging tariff cuts and updated trade rules designed to expand exports and reduce costs for consumers.

The agreement was finalized by Israeli Economy and Industry Minister Nir Barkat and Costa Rican Foreign Trade Minister Manuel Tovar Rivera. Once ratified, it will immediately eliminate tariffs on more than 90% of trade lines and provide preferential treatment to roughly 95% of goods exchanged between the two countries.

Israeli consumers are expected to benefit from lower import prices on food products, agricultural goods, and industrial inputs such as raw materials and equipment sourced from Costa Rica. Key imports will include produce, nuts, honey, and vegetables, while Israeli exporters are set to gain easier access to a high-tariff Latin American market.

The pact also modernizes customs processes. It allows for Declarations of Origin in place of Certificates of Origin, recognizes software as part of production, and includes flexible rules of origin tailored to contemporary global supply chains. These steps aim to reduce bureaucracy, cut processing times, and enhance the global competitiveness of Israeli companies.

"This is a significant achievement for Israeli industry," said Roi Fisher, head of Israel’s foreign trade system. Barkat echoed the sentiment, calling Costa Rica a “natural partner” and emphasizing the potential for growth in both trade volume and sectoral cooperation.

For the first time, the agreement also regulates trade in services between the two countries. It introduces standards for digital commerce, the mutual recognition of electronic signatures, remote service delivery, and equal treatment for Israeli service providers—measures that open new commercial pathways in the digital economy.

Negotiated by Israel’s Foreign Trade Administration with coordination from multiple government ministries, the deal was concluded after two rounds of talks and extensive consultations.

Currently, Israeli exports to Costa Rica stand at approximately $32 million per year, but officials anticipate a substantial increase once the agreement takes effect. Israel will also join the ranks of nations benefiting from Costa Rica’s existing network of 18 free trade agreements. Share this article or subscribe to our newsletter for updates.