Ministry of Commerce said on Tuesday it has signed a Memorandum of Understanding with Costa Rica, in which the two sides will start free trade area negotiations in January.

Chinese Commerce Minister Chen Deming and Costa Rican Minister of Foreign Trade Marco Vinicio Ruiz reached the agreement on November 17.

China is the second largest trade partner of Costa Rica. Costa Rica is the second largest trade partner of China from Central America.

According to China Customs, bilateral trade between the two countries reached $2.87 billion in 2007. China's imports from Costa Rica hit $2.3 billion, up 32 percent, and its exports gained 39 percent to $570 million.