Dairy Trade Conflict Between Panama and Costa Rica Awaits WTO Decision

The longstanding trade conflict between Panama and Costa Rica has reached a critical point following Panama's decision to appeal a WTO ruling. This ruling, issued in December 2024, was in favor of Costa Rica, but Panama continues to impose restrictions on Costa Rican dairy and meat products. The restrictions affect 26 Costa Rican processing plants and are justified by Panama as a measure to protect sanitary sovereignty and ensure commercial reciprocity.

The dispute intensified in June 2020 when Panama disabled the Costa Rican plants, citing health protocol discrepancies such as the handling of brucellosis and raw cheese processing. These measures were rooted in historical tensions beginning in 2011, when Costa Rica halted Panamanian poultry exports.

Panama's new government, led by President José Raúl Mulino, insists on a technical stance, advocating for equal rules for both nations. Costa Rica, under President Laura Fernández, urges Panama to remove protectionist barriers and comply with WTO standards to restore trade flows.

The Costa Rican National Chamber of Milk Producers strongly opposes Panama's appeal, arguing it perpetuates unjustified protectionism. As the WTO deliberates, the regional dairy market remains fragmented, impacting Costa Rica's industry, which had heavily relied on the Panamanian market.