5G disagreements cause tension over Costa Rica-China trade agreement

Photo: Wikimedia Commons

China has warned Costa Rica that its decree for the development of 5G technology could violate bilateral agreements established in the Free Trade Agreement (FTA) between the two countries, which has been in force since 2011. The Chinese embassy in San Jose issued a statement expressing concern over the ban on the participation of Chinese companies in projects considered sensitive by the United States, referring to President Rodrigo Chaves, who issued the decree in August.

The exclusion of companies from certain countries, especially China, is considered contrary to market rules and the principle of fair competition, according to the Chinese embassy. It warned that this would seriously affect the confidence of Chinese companies in the business climate and legal guarantees in Costa Rica. China rejected Chaves’ decision to exclude Huawei as its mother country is not yet a signatory of the Budapest Agreement, which surrounds issues of cybersecurity.

The announcement follows a communiqué from the European Union and European embassies in favor of the decree on January 30. Meanwhile, some critics suggested a possible geopolitical influence, especially after statements by Laura Richardson, head of the State Department, about alleged Chinese interests in investments and possible military actions in the region.

Chaves defended the legality of the decree, alleging supposed economic interests behind the criticism in favor of China. Despite the Chinese warning, the Constitutional Chamber of Costa Rica overruled a claim filed by Huawei, arguing discrimination. The magistrates pointed out that this was not the appropriate mechanism for such a claim.

The Chinese embassy urged the Costa Rican government to maintain an objective and impartial position and to implement its statement to support the investment of more Chinese companies. The situation reflects the complex intersection between economic, geopolitical and security considerations in the development of key technologies such as 5G in an increasingly tense international context.