Currently, transporting goods by sea between Central American countries can increase freight costs by at least 60% compared to the land option, which represents an obstacle to changing the way goods are transferred in the region.
As a result of the closure of the Penas Blancas customs crossing, on the border between Costa Rica and Nicaragua, some businessmen in the region had to resort to the sea route in order to deliver their orders.
Since January 1, 2020, Nicaraguan authorities have been charging $25 for the electronic processing of the Single Central American Transit Declaration, a cost that exceeds by 233% what was paid until the end of 2019.
Until December 31 last year, the General Directorate of Customs Services (DGA) charged $7.5 for the Single Central American Declaration in Transit (DUCA), but with the new provision of the authorities, the cost increased by $17.5 for 2020.
The costs incurred by businessmen in Nicaragua, because of excessive procedures and low efficiency of foreign trade systems is 25% additional to the value of the goods, while in El Salvador and Costa Rica, amounts to 18% and 16%, respectively.
A study by the Economic Commission for Latin America and the Caribbean (ECLAC) specifies that the costs paid by businessmen in Nicaragua, because of excessive procedures and low efficiency of foreign trade systems is 25.3% additional to the value of the goods, followed by El Salvador with 18.3%, Costa Rica with 16.3%, Honduras with 15.8%, Guatemala with 14% and Panama with 9%.
In the South American country a rule has been published that establishes that costs and expenses incurred during transportation of goods by air must be borne by the importers.
From a statement issued by the Foreign Trade Promotion Office of Costa Rica (PROCOMER):
On October 11, the Ministry of Transport and Communications (MTC) of Peru issued a rule that the costs and expenses incurred during transportation of goods by air will be borne by the importers.
Entrepreneurs from the logistics sector in Guatemala argue that the increase from 30% to 60% on import charges which came into effect on October 16th will reduce competitiviness.
The new tariff schedule includes a $38 payment per inspection using scanners, among other costs incurred in handling cargo, which in the end will result in price increases for the consumer.
Central American countries need to implement a series of improvements in customs procedures in order to meet the requirements of the agreement for the facilitation of international trade.
Within two years, as part of the commitments made in the 2001 Doha Round of the Bali Agreement, signed in 2013 by 160 nations belonging to the World Trade Organization (WTO), including Central America, governments will have to harmonize their customs systems ensuring trade facilitation. However, to date institutional progress on issues established by the Agreement such as simplification, harmonization and automation of procedures for international trade have not happened, particularly in relation to the requirements and formalities for import, export and transit of border freight.
The term of the decree allowing the border areas of Mexico to import goods at a significantly lower charge than in the rest of the country has been extended for three years.
According to the Mexican Finance Minister, Luis Videgaray, the decree was scheduled to end on Decemnber31 December, however, the term has been extended for another three years.
Another decision taken by the Mexican government is to close customs checkpoints on the border areas. "We will start gradually, but from today (Thursday) we are taking action to eliminate various Customs checkpoints located in states bordering the United States and Guatemala, though not exactly on the borders," said President Enrique Peña Nieto.
The World Trade Organization aims to reduce by half the costs added to products as they pass through customs offices.
An article in Elfinancierocr.com reports that "... all WTO members recognize that progress can be made in cutting costs associated with inefficiencies in order to make trade more efficient."
"... The idea is that the WTO reaches agreements related to this and other issues at the Ninth Ministerial Conference to be held in Bali, Indonesia, from 3 to 6 December. "