A key factor in economies´competitiveness is the unrestricted movement of the available human and material resources, and this is where the customs integration of Honduras, Guatemala and El Salvador falls very short.
EDITORIAL
Jorge Cobas González Director of CentralAmericaData.COM
While authorities have reactivated the process for binational customs liberalization, entrepreneurs have pointed to constraints on issues related to bureaucracy, corruption, and infrastructure at border crossing points.
The governments of Guatemala and El Salvador have resumed work in Technical Groups to liberalize binational border posts. In a statement, they reported that dialogue has been revived over customs, sanitary and phytosanitary issues, migration, security, and legal and tax issues.
Despite the corruption scandals that tarnished the policy in Guatemala and Honduras, Honduran businessmen say the project of to unify the border posts at the end of the year is still moving forward.
Amid strikes, marches and demonstrations which have taken place in Guatemala and Honduras, working groups composed of representatives of the private sector in both countries and the government have not stopped working, as reported entrepreneurs like Maria Antonia Rivera, from the Chamber of Commerce and Industries of Cortés.
Money in the pocket for every grandstanding politician and every wannabe business consultant, logistics in Central America is a much talked about theme on which no action is actually taken.
EDITORIAL
Logistics is vital for sustainable economic development, and it is perhaps the area of business management that has made the greatest strides in the last 50 years.
The first stage of the pilot program, which began on June 1, consists of transferring the post of El Florido Guatemala, to Honduran offices in Agua Caliente.
The second phase, scheduled for December, "... involves the installation of "peripheral posts", with which border points will be removed and turned into only crossing and control points, trade will through peripheral positions. " This will be possible once the congresses of both countries ratify the Enabling Protocol.
The agreement between the two governments states that as of December 15, 2015 customs offices at common borders will suspend their tax functions and allow the free movement of goods and people.
From a statement issued by the Government of Guatemala:
64 years after having started the process of Central American integration, the presidents of Guatemala, Otto Pérez Molina, and Honduras, Juan Orlando Hernandez, signed a historic agreement for a customs union between the two nations today, from which it is expected that economic growth of 15% will be produced in the short term. The agreement aims to eliminate the three land crossings on the borders of the two countries.
Both governments announced that they have signed an agreement to unify customs in order to expedite the transport of vehicles and people, with effect from 1 June.
With this agreement, it is expected that the border between the two nations will be fully liberated for both freight and passengers in December. Immigration procedures will be carried out online or in an office to be located near the border area.
Now is the time to fulfill the clear mandate of the Presidents of the Central American Integration System for the establishment of a Customs Union in Central America.
From a statement issued by the Federation of Chambers of Commerce of Central America (FECAMCO):
In order to expedite intraregional trade it is necessary for customs offices dealing with cargo freight, to be open all hours, just as immigration customs offices are.
A study commissioned by the Federation of Chambers of Commerce of Central America (Fecamco) concluded that there are 87 barriers to trade in the region, one of the major ones being operations of the systems at customs offices at borders, followed by bureaucratic requirements and lack of adequate infrastructure.
Governments in the region should accelerate and make concrete a real customs union that decisively contributes to economic development by facilitating trade in goods and services as well as flows of capital.
While Central American government officials in regional authorities speak of integration, in reality central governments are doing little or nothing to achieve it, when not they are not in the process of obstructing it.
The main issue of concern is the slow pace of intraregional trade, which in particularly is hindered by customs offices in the isthmus.
The quarterly meeting of the executive directors and presidents of the Federation of Chambers and Industry Associations of Central America (Fecaica) showed the concern of the sector over measures such as the charging at offices in El Salvador of an $18 fee for the service of scanning the cargo passing through.
It is time for the organizations dedicated to integration to be held to account, and the countless meetings and bombastic statements to be brought back down to earth.
" ... trading successfully requires a lot of work, it means risking assets, paying salaries, burning the candle at both ends in order to fulfill an order, it means having to throw away products because consumers dont like them anymore or because another one came in from abroad that pushed yours aside. Every extra dollar caused by difficulties at Central American borders pushes companies towards not being able to compete, towards disappearing. "
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.
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