Such PTAs, most notably those with the US, China and the EU, will boost the share of total exports benefiting from preferential access in the destination markets from 24% to over 83%. Along this path of trade liberalization, the country has placed a strong emphasis on the attraction of Foreign Direct Investment (FDI) in high-tech manufacturing and services activities, producing a substantial transformation in the structure of its exports and inserting a fair share of the economy into Global Value Chains (GVCs) . As a result, about 43% of the country’s total exports are related to GVCs, with an average of 36% of such exported value being added domestically. Labor and capital employed by GVC-participating firms account for about 40% of the domestic contribution to exports, while locally-provided services and supplies account for almost one sixth and one tenth, respectively. In turn, the relative importance of different services is quite variable across the GVCs identified.

No: ERSD-2011-09

Author:
Francisco Monge-Ariño — Ministry of Foreign Trade of Costa Rica

Manuscript date: January 2011

Key Words:

Global value chains, Costa Rica

JEL classification numbers:

F13, F14
  

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