On January 9, 2020, the British deputies finally approved an agreement to implement the exit of the United Kingdom as a member of the European Union (BREXIT). More than three years after the referendum that marked a milestone in the history of the European community, the UK is ready to end a forty-seven-year regional integration. The separation and departure will not be immediate. The Agreement provides for a transition period until December 31, 2020, during which the United Kingdom will continue to apply and benefit from European regulations, without participating in institutions or decision making. This transition can be extended once and by mutual agreement, until December 2022.
Impact on Costa Rica
The UK is one of our main international trading partners. Since 2013, commercial relations have been governed by the Association Agreement between Central America and the European Union (AACUE), which seeks preferential access to markets. As a result of this solid trading platform, and national efforts, by 2018, exports to the United Kingdom reached 10%, making it our third most-active trading partner within the European community.
Thus, for Costa Rica, it is essential to ensure the stability and strengthening of political-economic relations with a strategic partner to which we export more than 150 products.
What’s next?
The Exit Agreement adopted in London on January 9 must be approved by the House of Lords and subsequently signed by Queen Elizabeth II, which is expected no later than January 31, 2020. Once signed, a corresponding transition period will begin, during which Costa Rica’s commercial relations with the UK will continue to be governed by the AACUE. After the transition period, the AACUE would cease to regulate our commercial exchange. Fortunately, and thanks to the efforts of the Government of the Republic and the Legislative Assembly, at the end of 2019 the country signed and ratified an agreement that gives continuity to our relations, once the BREXIT has been finalized: the Association Agreement between Central America and the United Kingdom (AACRU). The AACRU not only ensures the preferential access of Costa Rican exports to the United Kingdom but in general, provides a platform to guarantee the continuity of commercial conditions and access.
Thus, both the European Community and Costa Rica are at the door of starting a new relationship with the UK. In our case, fortunately, we have an instrument that will ensure a smooth transition, without major disruption in the conditions of our international trade. As for the European Union, without a doubt, this is not the end of the relationship between the two, but the beginning of negotiations under new political-commercial rules, which are yet to be outlined.