The competitiveness of the economies of the isthmus is being impaired by the inefficiency of the bureaucracy in the management of customs offices in the region.
The bureaucracy at customs offices has become a serious problem for the Central American region. Among other things it generates increases in the costs of exporting because of the procedures that must be paid for, loss of perishable goods and delays in production in processes that have to wait for raw materials.
Regional unions are threatening a general strike in the Salvadoran border to protest at the rate of $18 per inspection at customs offices in that country.
S21.com.gt reports: "The new provision of the General Customs of El Salvador will take effect on 6 January, in light of this, carriers of the remaining five countries in the region have announced a general strike on the Salvadoran border if this legislation goes ahead. "
Costa Rican customs offices do not have enough staff to handle the flow of cargo from Panama to the rest of Central America.
While on the Panamanian side there are about 25 people to process documents from carriers, on the Costa Rican side there are only 5 staff members to carry out these duties.
The situation occurs at a time when "the international freight activity going from Paso Canoas to Central America has increased by 50 % ... ", reported Prensa.com. In recent days up to 150 trucks have accumulated, waiting their turn to pass through.
The heavy bureaucracy present in Central American governments is obstructing the transport of goods, adding to regional trade costs.
In Guatemala, for example, the inefficiency in resolving issues and easily implementing procedures is self evident, as currently there are open files against 36,000 carriers, "something that no one can update, because of how cumbersome it would be to update this documentation , but the worst thing is that many of these records were wrongly documented because they correspond to breaches by vehicles which later went out of circulation ... " noted an editorial published by Prensalibre.com.
Preparations are being made for a single form that will streamline customs trade ahead of the entry into force of the Association Agreement between Central America and the European Union.
According to the president of the Superior Council of Private Enterprise (Cosep), Joseph Adam Aguerri, already working on this issue are the Central American Integration System (SICA), and the Secretariat of Central American Economic Integration (SIEC). They are working "on a unified customs document that aims to concentrate all imports and exports," added Aguerri.
There is a requirement to avoid duplicate collection of customs duties levied on imports in order to meet the provisions of the trade pact with the European Union.
Advances made in the past two years in the Central American customs offices are still not sufficient, and related costs amount to 38% of logistics costs.
The best advances have been made in customs processes relating to merchandise transported between Central American countries.
The Intra-regional trade sector is excited about a project to develop an Integrated Control Center at the border crossing between Panama and Costa Rica.
Panama and Costa Rica have agreed to develop a design for an Integrated Control Center (ICC) in the common border of Paso Canoas.
Instead of being reduced, bureaucracy at the Central American borders is becoming increasingly burdensome, complicating and making intra regional trade more expensive.
Constant delays which increase transportation costs, lack of progress in the streamlining of customs procedures and a perceived stagnation of the customs and economic integration project are the most pressing problems observed by business associations in Central America.
Central American representatives have approved various technical regulations for the regional customs union.
Among the regulations adopted are those relating to labeling and product registration.
Also under discussion in the meeting, was the process of Panama’s incorporation into the Central American Economic Integration Secretariat (SIEC), a requirement that Panama needs to meet in order to take part of the Association Agreement with the European Union.
The cost of customs procedures adds up to 40% to the price of products traded between countries in the region.
The isthmus is the natural destination for the region’s export producers and a large part of the countries’ economic development depends on the 40 million people that inhabit Central America, forming a unified marketplace.
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