Unless intra-regional trade in chemical contents and residues, micronutrients and food preparations is regulated in a balanced manner, trade relations in Central America could face obstacles in the future.
Trade between Central American countries is essential, since a considerable proportion of foreign sales by local companies are destined for other markets in the region.
In the first six months of 2020, trade of paints and varnishes between Central American countries amounted to $43 million, an amount that is 30% lower than that recorded in the same period of 2019.
Figures from the Trade Intelligence Unit of CentralAmericaData: [GRAFICA caption="Click to interact with the graphic"]
Due to the tropical storms Eta and Iota, severe damage has been reported to the road network in Central American countries, and some border posts in Guatemala, Honduras and El Salvador have been suspended.
Since November 17, operations were suspended at the El Corinto, El Florido and Aguas Calientes border posts. These areas, shared by Guatemala and Honduras, are not operational, according to the Guatemalan Superintendence of Tax Administration (SAT).
The protests in Costa Rica, which affect vehicle circulation in the country and border crossings, will have a short-term impact on intraregional trade and cargo transport costs.
In order to access the $1.75 billion credit that it intends to request from the International Monetary Fund (IMF), the Costa Rican government proposed to tax financial transactions, raise the tax on the profits of companies and individuals, and increase the tax on real estate.
As of October 1st, Guatemala and Honduras will begin operating three Peripheral Customs Offices, areas that will simplify procedures and allow free community mobility between both countries.
Guatemalan and Honduran taxpayers who make definitive imports to each State Party will be the ones to benefit from the implementation of this type of customs, since the goods imported under this modality will enjoy free mobility.
After the Panamanian government agreed to ban the entry of animal products from Costa Rica, Panamanian businessmen supported the measure and asked to discuss the export and import requirements, since they claim that their agricultural products are prevented from accessing the Costa Rican market.
The trade dispute began when on July 10 Panama informed the National Animal Health Service (SENASA) of the Costa Rican Ministry of Agriculture and Livestock (MAG) of the decision not to extend export authorization to a list of previously authorized Costa Rican establishments that have been exporting to Panama for many years.
Following Panama's blockade of the entry of animal products from Costa Rica, arguing that the permits have expired, Costa Rican authorities decided to notify the World Trade Organization of the dispute.
On July 10, Panama informed the National Animal Health Service (SENASA) of Costa Rica's Ministry of Agriculture and Livestock (MAG) of the decision not to extend export permits to a list of previously authorized Costa Rican establishments that have been exporting to Panama for many years.
Because Costa Rica has imposed several restrictions on the movement of goods entering its territory, the Guatemalan government announced that it will apply reciprocal measures to Costa Rican transporters from June 9.
From three to five days, the time that Costa Rican carriers have available to stay in Nicaraguan territory, to unload goods or for regional transit, was increased.
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.
After several days of tension generated by the restrictions imposed by Costa Rica on the transport of cargo from neighboring countries, Central American authorities reached an agreement and opened the way at the border of Penas Blancas.
After Costa Rica imposed several restrictions on the movement of cargo entering its territory, the Panamanian government limited the permit for Costa Rican carriers to remain in the country to 72 hours.
The transit of goods in the region is becoming more complicated every day, since it is argued that the propagation of the covid-19 is being mitigated.
After the Costa Rican government decided to impose several restrictions on heavy transport units entering its territory, the Honduran government decided to grant Costa Rican pilots only 72 hours in the country.
In order to mitigate the spread of the covid-19, the government decided that as of May 18, only transporters that make direct transit from border to border will enter Costa Rican territory, whose units must be subject to police surveillance.
On 15 May, President Carlos Alvarado issued two decrees aimed at keeping the number of foreign transporters in the country as low as possible, reported the Costa Rican presidency.