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Canada, Costa Rica Strengthen Tax, Trade Relationship

by Mike Godfrey, Tax-News.com, Washington

15 August 2011


Canada and Costa Rica's economic relations have been strengthened with the signature of two key new deals and the launch of talks to modernize an existing free trade agreement (FTA).

Canada's Prime Minister Stephen Harper announced on August 11 the inking of an air transportation agreement (ATA) and a tax information exchange agreement (TIEA) between the two countries, along with the opening of negotiations on the FTA. The announcements were made during a working visit with President Laura Chinchilla in San José, Costa Rica.

According to the Canadian government, these deals will have far-reaching benefits for both countries. The FTA negotiations will aim at modernizing the existing treaty, accelerating the elimination of tariffs for agricultural and industrial goods, increasing market access and broadening the agreement to cover other areas, such as cross-border trade in services, including financial services.

The ATA will provide airlines with flexibility in terms of routes, frequency of service and pricing, which it is hoped will promote travel, trade and economic growth in each country. In addition, the agreement marks another step towards the successful implementation of Canada's Blue Sky Policy with countries in Central America.

Finally, the TIEA will create a legal framework to facilitate the exchange of relevant tax information. In turn, this will help both countries to enforce domestic tax laws and protect the integrity of their tax systems.

Commenting on the deals, Harper said:“Canada and Costa Rica enjoy excellent bilateral relations... By removing trade barriers, facilitating air travel between our countries and working together to combat tax evasion, the measures announced today (August 11) will lead to new opportunities and stronger economies for both Canadians and Costa Ricans.”

TAGS: transport treaty | tax | free trade agreement (FTA) | tax information exchange agreement (TIEA) | tax avoidance | law | aviation | financial services | tariffs | trade treaty | agreements | Canada | Costa Rica | trade | services

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