Costa Rican President Laura Fernandez escalated pressure Wednesday during celebrations marking National Farmers Day, sharply criticizing what she described as Panama’s agricultural trade blockade. File Photo by Jeffrey Arguedas/EPA

May 21 (UPI) -- Trade relations between Costa Rica and Panama entered a critical phase after negotiations failed to resolve a prolonged dispute over agricultural products, raising concerns about disruptions to regional supply chains.

Costa Rican President Laura Fernández escalated pressure Wednesday during celebrations marking National Farmers Day, sharply criticizing what she described as Panama's agricultural trade blockade.

Fernández said her government would not accept unjustified multimillion-dollar losses for key agricultural sectors. She contended that Panama's measures constitute "a blockade with no legal basis," particularly after Costa Rica prevailed in a dispute before the World Trade Organization.

According to local media reports, including La Nación and El Observador, Fernández ordered the activation of international diplomatic channels to denounce what her administration called "bad faith" actions by Panama. Costa Rica is seeking to pressure its neighbor into lifting restrictions on dairy products, meat, pineapples, bananas and strawberries.