Costa Rica Officially Recognizes Vietnam’s Market Economy Status

Costa Rica has officially recognized Vietnam’s market economy status, becoming the 73rd country to do so, shortly after the United States declined to grant similar recognition. Several major economies, including Australia, Canada, the UK, Japan, South Korea, and New Zealand, have already classified Vietnam as a market economy.

In contrast, the U.S. Department of Commerce decided last Friday to continue categorizing Vietnam as a non-market economy, a decision that disappointed Vietnamese officials. This decision came nearly a year after the two countries upgraded their relationship to a comprehensive strategic partnership, the highest level in Vietnam’s diplomatic framework.

On Monday, Costa Rican Minister of Foreign Trade Manuel Tovar Rivera presented a diplomatic note confirming this recognition to Vietnam’s Ministry of Industry and Trade (MoIT). MoIT Minister Nguyen Hong Dien stated that this acknowledgment highlights Vietnam’s significant progress in integrating into the global economy and will enhance economic and trade relations between the two nations.

According to the MoIT, Costa Rica’s recognition is a favorable development, as Vietnam has been urging numerous trade partners to acknowledge its market economy status. This recognition is expected to offer better protection for Vietnamese exporters in antidumping and countervailing cases.

Costa Rica, a member of both the World Trade Organization (WTO) and the Organization for Economic Cooperation and Development (OECD), follows legal regulations that include investigating and applying trade defense measures. As of December 31, 2023, Costa Rica had initiated 12 antidumping investigations on imports from various countries, including Brazil, Chile, Mexico, the U.S., Nicaragua, El Salvador, Venezuela, and Guatemala, according to WTO statistics cited by the MoIT.

During a meeting in Hanoi on Monday, the MoIT’s Trade Promotion Department and Costa Rica’s trade promotion agency PROCOMER signed a memorandum of understanding in the presence of their respective trade ministers.

Vietnamese customs data indicates that trade between Vietnam and Costa Rica amounted to $169.5 million in 2023, an 8.5% decrease from 2022. Vietnam exported $124.4 million worth of goods to Costa Rica and imported $45.2 million in return. In the first half of 2024, bilateral trade surged by 18.1% year-on-year to $99.95 million, with Vietnamese exports increasing by 20.9% to $76.8 million.

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