Investors should be aware of the tools available for exporting with tariff benefits to Cuba, Mexico and the European Union.
A statement from the Agency for Promotion of Exports and Investments in El Salvador – PROESA reads:
Three new tools to increase the flow of trade and investment
Three instruments will soon enter into force that will foster growth in trade between El Salvador, Cuba, Méxio and the European Union. These have conditions which investors need to know about in order to export with tariff benefits.
In Guatemala it is estimated that the return to power of the Partido Revolucionario Institucional (PRI), which has a more protectionist philosophy than the current government, will not generate any changes in trade between the two countries.
While at present Mexico is ruled by a political party with liberal tendencies and one conducive to the country's openness to international trade, the next one, emerging from the recent elections, has traditionally had a more protectionist stance.
Representatives of the Mexican Guatemalan Chamber of Commerce (Camex) are urging the passage by Congress of the Free Trade Agreement signed in November 2011.
Arturo Soto, president of Camex said that the entry into force of the FTA, which will lower tariffs on 98% of exported products, will generate an increase in bilateral trade, adding that "it is time to get it approved."
Administrative delays in implementing the FTA with Mexico have cost the country a $7 million sugar sale.
In early May, Mexican authorities announced that the country would buy, from any source, 250,000 tons of sugar in order to meet domestic demand. If the Free Trade Agreement between both countries had been in full force, El Salvador would have received 8% or about 20,000 tons, as stipulated in the treaty.
Nicaraguan products such as leather, footwear, yogurt and other dairy products, and spices, are potential business opportunities under the unified Central America-Mexico trade agreement.
"There is a large niche in the Mexican market which is an opportunity for Nicaragua to place more and more products, to diversify their offering," said Rodrigo Melendez, manager of the economic and commercial section at the Mexican Embassy in Managua, reported LaPrensa.com.ni.
The Legislative Assembly of El Salvador has received the text of the FTA with Mexico and the trade agreement with Cuba for ratification.
From the press release by El Salvador’s Legislative Assembly:
The Ministers and members of the Board of the Legislative Assembly, today received from the Minister of Foreign Affairs, Hugo Martinez, and the Minister of Economy, Hector Dada Hirezi, the texts of the Partial Agreement with the Republic of Cuba and the Unified Free Trade Agreement (FTA) between Central America and Mexico.
Central American countries will be able to access the Regional Integration Committee of Supplies, to supply raw materials for the development of Mexican goods, especially textiles.
After three years of negotiations, the Unified Free Trade Agreement between Mexico and Central America was signed on November 22nd 2011.
The treaty unifies standards in areas such as trade in goods, investment, services, intellectual property and resolution of disputes, for El Salvador, Guatemala, Costa Rica, Nicaragua and Honduras in their trade relations with Mexico.
The business sector expects to achieve a 15% increase in trade between the two countries next year.
Nicaragua's private sector is awaiting the ratification of the unified Free Trade Agreement (FTA) between Central America and Mexico, which was signed last week and will be ratified by the presidents of the countries involved on 4th and 5th of December.
Until now Mexico has had a separate bilateral treaty with Costa Rica, Nicaragua and the Northern Triangle consisting of El Salvador, Guatemala and Honduras.
The Unified Free Trade Agreement (FTA) will be signed today, November 22 in San Salvador, said El Salvador’s finance minister.
"The agreement provides a common legal framework for the conduct of trade in goods and services between parties, as well as the establishment of investment in the region, he said in his announcement", reported Prensa Latina.
Costa Rica will export sugar duty free when supply in the Mexican market is insufficient.
A press release from the Costa Rican Ministry of Foreign Trade announced that, “On October 20, 2011, in the city of San Salvador, technical negotiations for the Free Trade Agreement between Mexico and Central America were finalized.”
Regarding the Rules of Origin and the Committee and Sugar quotas, the press release states that:
Access for sugar and the rules of origin for textile goods are delaying the negotiations for unification of the FTAs between Mexico and the region.
Before the 17th of October, the planned date for signing the agreement, negotiations in these areas must be concluded.
The Costa Rican Minister of Foreign Commerce (Comex), Anabel Gonzalez said ... that the general framework of rules or the convergence of three FTA’s between the isthmus and Mexico is finalised, except for ... very specific issues regarding the three products.
In this round of negotiations a common legal framework to regulate trade between Central America and Mexico has been agreed upon.
A press release from the Costa Rican Ministry of Foreign Trade reads:
Yesterday (28 September) in Guatemala, a meeting of Deputy Ministers of Central American Economy and Trade and the Under Secretary of Economy of Mexico took place, in which important agreements were reached regarding the rules of the FTA and pending issues were discussed in order secure the signing of the agreement in October. This meeting was held as a follow-up to the seventh round of negotiations held in Mexico last week.