Finally the geopolitical reality has been imposed and the Canal country has been formally integrated into the community of Central America nations.
It was "a great achievement" and one "longed for for many years by all Central American countries", this was Panama's accession to SIECA, an organ of the Central American Integration System (SICA), said Anabel Gonzalez, Costa Rican Foreign Trade Minister.
With the formal integration of the canal country into SIECA, what was a geopolitical contradiction has been corrected, because Panama always should have been part of Central America.
From a press release from the Central American Economic Integration Secretariat (SIECA):
The Secretariat of the Central American Economic Integration (SIECA) congratulates the brotherly people of the Republic of Panama for joining the Central American Economic Integration Subsystem by means of the deposit of the Incorporation Protocol made on Monday May 6 this year.
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).
The Union of Central American Bi-National Chambers of Commerce, Industry and Mexican Investment has been formally established.
Ucabicimex is "formed by the Chamber of Industry and Commerce of Costa Rica - Mexico (Cicomex), the Salvadoran - Mexican Trade (Chamber Casalmex), the Guatemalan - Mexican Chamber of Commerce and Industry (CAMEX), the Honduras - Mexico Enterprise Chamber ( CEHM), the Mexico - Costa Rica Enterprise Chamber (Camexcr), the Mexico - El Salvador Enterprise Chamber (Camexsal), the Mexico - Nicaraguan Enterprise Chamber (Camenic) and the Mexico - Panama Chamber of Commerce (Camexpa) ", reported Nacion.com.
Differences in customs processes between Central American countries to date are preventing them from trading as a block, in this case, with the EU.
According to the manager of the Integration and Trade Sector at the Inter-American Development Bank (IDB), Antoni Estevadeordal, trade agreements themselves are not a guarantee of success."It is not enough to have a policy of openness.
In the past 20 years intraregional trade grew at a rate of 12% per year, indicating an opportunity to deepen integration by finally fully adopting the customs union.
However, experts believe that Central America still faces challenges, specifically in customs matters.
"Exports to Central America have grown over the past 20 years at a rate of 50% more than exports to the rest of the world." "...at an average of 12% annually, and our exports to the world have grown at an average of 8% annually. This underlines the importance of intraregional trade dynamics in this space of Central American integration," said Hugo Beteta, CEO of the subregional site of the Economic Commission for Latin America and the Caribbean (ECLAC) in Mexico.
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.
The Federation of Chambers of Commerce of Central America has met in Managua, to discuss proposals and initiatives to overcome barriers of various kinds to trade on the isthmus.
"The president of the Chamber of Commerce of Nicaragua (CACONIC), Mario Gonzalez, said that employers are looking for strategies to strongly influence their respective governments with the aim of stopping them from blocking regional trade, including the closure of the borders, for political reasons or non-tariff related barriers," reported La Prensa in its online edition.
The customs offices of Guatemala, Nicaragua, Honduras and El Salvador have been interconnected using the Integrated Foreign Trade System (SICEX by its initials in Spanish) since June.
The system aids export companies in reducing time and costs, by digitalizing the process of customs authorisation.
According to an article in Elmundo.com.sv, "When we speak of a customs interconnection, what this means is that an export transaction can be automatically generated in El Salvador, registered in the national customs system, and simultaneously, registered at the offices of another Central American country" said Cornelius Deras, head of the Center for Import and Export Procedures (CIEX El Salvador).
Regional trade grew 6% in the first 6 months of the year compared to the same period of 2009.
According to information from the Central American Economic Integration Department (SIECA), between January and June of this year, trade reached $ 2,844 million, $ 165 million higher than the same period of 2009.
"In the first half of 2009, sales among Central American countries reached U.S. $ 2,679.5 million" Prensalibre.com stated in their article.
The World Bank funds will be implemented through the program "Trade Facilitation and Regional Integration."
The technical assistance program to be developed in two years, aims to support regional efforts to facilitate trade and free movement of goods. The funds will be implemented in coordination with the Central American Economic Integration Secretary (SIECA).
Improvements to infrastructure, consolidation of regional integration and increasing its competiveness are a few of the challenges faced by Central America.
The world economic crisis was felt by the region with a 29% drop in exports and 13% less imports, according to data from Central American central banks.
Journalist Leonel Díaz Zeceña analyzes the issues in his article for Prensa Libre and reports comments from businesses and analysts.
Honduras was the worst-hit (-26.15%), while Nicaragua the least (-16.06%).
Data from Sieca shows that Central America exported 10% less to the rest of the world in 2009 than in 2008. Imports fell even more, 24.3% when compared to 2008.
In El Salvador, trade with the rest of the world contracted 20.18%, in Costa Rica 18.9% and in Guatemala 17.99%.