Israel Signs Free Trade Agreement With Costa Rica

More than 90 percent of tariff lines will be dropped immediately, and roughly 95 percent of goods traded between the countries will qualify for preferential treatment.

By Shula Rosen

Israel and Costa Rica finalized a free trade agreement in Jerusalem on Monday, laying out broad tariff cuts and new market access meant to accelerate Israeli exports while lowering import costs for consumers.

The signing by Economy and Industry Minister Nir Barkat and Costa Rica’s Foreign Trade Minister Manuel Tovar Rivera marks Israel’s latest effort to widen its global trade footprint amid a series of new economic initiatives.

Officials said the accord will eliminate most tariffs the moment it takes effect.

More than 90 percent of tariff lines will be dropped immediately, and roughly 95 percent of goods traded between the countries will qualify for preferential treatment.

Israeli importers are expected to see reduced prices on food items, raw materials, and industrial equipment arriving from Costa Rica, including produce, nuts, honey, vegetables, and inputs used in manufacturing.

The agreement also introduces updated trade procedures, such as accepting a Declaration of Origin rather than a Certificate of Origin, recognizing software as part of the production process, and incorporating flexible rules to reflect modern supply chains.

Regulators said these changes are designed to simplify paperwork, shorten processing times, and sharpen the competitiveness of Israeli industry.

Barkat described Costa Rica as a natural commercial partner with a strong record of open trade.

He said the pact is expected to widen opportunities for Israeli exporters, strengthen cooperation with a developing Latin American economy, and help reduce domestic costs through tariff cuts. Roi Fisher, who heads the foreign trade system at the ministry, called the signing “a significant achievement for Israeli industry” and said preferred access to a high-tariff market gives exporters a meaningful advantage.

The agreement regulates trade in services between the two countries for the first time, opening channels for remote service delivery, digital commerce, recognition of electronic signatures, and equal treatment for Israeli providers. Negotiations were coordinated by Israel’s Foreign Trade Administration alongside several government ministries and agencies, concluding after two rounds of talks and extensive professional consultations.

Israel currently exports about $32 million annually to Costa Rica, though officials expect that figure to grow as new sectors enter the market. Once ratified by both governments, the agreement will enter into force and place Israel on equal footing with other countries that already benefit from Costa Rica’s 18 existing trade pacts.