Central America and the Redesign of World Trade

The strong dynamic of the global trade agenda forces Central America to consolidate its integration in order to participate in the changes that are shaping the global commercial order.

Friday, June 13, 2014


The relaunching of the global trade agenda that the President of the United States is promoting in his second term, should be a warning for Central American countries, which despite reaching trade agreements with both the U.S. with the European Union, have sat on their laurels and have failed to complete the tasks needed to make the best use of these agreements, especially with regard to common customs and tariff policies.

An article by Peter Hakim in Infolatam reviews the changes in trade between the Americas and the rest of the world, especially China, and how the mega trade agreements currently being negotiated by the USA - the Trans-Pacific Partnership (TPP) Strategic Agreement, currently involving three Latin American countries (Chile, Mexico and Peru) and 12 countries in Asia (including Japan and Korea, but not China or India) and the Transatlantic Trade and Investment Partnership.TTIP) - will produce more changes in global trade, including having enough importance to overshadow the influence of the World Trade Organization, the current governing body.

"... If the TPP and TTIP negotiations are successful, the resulting agreements will most likely remodel the guidelines, rules and practices of international trade. The economic importance and scope of the nations participating in principle means that these agreements will have an impact around the world, both in the economies of the member states as well as non-members. The main exporters to the United States or the European Union, including commercial giants such as China, Mexico and Brazil, for example, could lose competitiveness in both these markets and elsewhere, unless their policies conform to the conditions of the new contracts. Even those countries that have signed free trade agreements with the U.S. and Europe will face new competition. "

"... The countries of Central America, whose economies are closely integrated with the U.S. economy and enjoy free trade agreements with the European Union, for example, are alarmed at the prospect of exports, which are rapidly growing, of apparel at low cost from Asia to the U.S. markets and Europe, Mexico and Canada, and have expressed their frustration at being excluded from the US-EU trade negotiations, which could have a significant impact on their own trade and investment flows. "

More on this topic

U.S. - Central America and Obama's Visit

April 2013

Since the entry into force in 2006 of the DR-CAFTA, the tip in favor of the U.S. in the trade balance has multiplied by 5.

"The Central America to which President Barack Obama is coming to visit on on Friday is a region that maintains multiple communication vessels with the United States, including a growing trade relationship which in 2012 amounted to $40 billion, although very much in favor of the American power," reported Prensa.com.

U.S. FTAs with Colombia and Panama Have a Long Way to Go

May 2010

In the U.S., the political situation is not favorable for approving these Free Trade Agreements, despite Barack’s Obama goodwill.

This was affirmed by State Secretary Hillary Clinton, while meeting with regional leaders at the 40th Conference of the Americas Council. She did reinstate her country’s commitment to free trade.

Chile helps Costa Rica with China FTA

October 2008

Chilean experts are giving support to Costa Rican authorities to prepare for the FTA that the Government plans to begin negotiating with China in less than six months.

During the visit of Chilean president, Michelle Bachelet, cooperation mechanism in place were reaffirmed, such as support for trade negotiations, said the Costa Rica minister of Foreign Trade, Marco Vinicio Ruiz.

Costa Rica aims for FTA negotiations with China and Mercosur

July 2008

The Costa Rican government looks forward to start negotiations in 2009 for Free Trade Agreements with China and Mercosur

The FTA with Mercosur with be in conjunction with the other Central American countries, stated on Wednesday, from Brasilia, the International Trade minister Marco Vinicio Ruiz.

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