Central America's trade dynamics in 2013 showed a slight cooling off mainly due to weak growth in external demand from trading partners out of the region.
From the executive summary of the Central America Annual Foreign Trade Report by SIECA:
In 2013 world trade in goods and services registered a moderate recovery, having experienced annual growth of 3.0% which is slightly higher than the trade growth in 2008 prior to the global economic crisis. Signs of recovery in the global commercial activity have been confirmed by the relative improvement in macroeconomic conditions in the advanced economies. In the commercial context described, Central America experienced a real growth of the economy equivalent to 4.1% in 2013, showing a slight slowdown compared to that observed in 2012, the year in which the regional economy grew by 5.2% annually.
On June 27, business leaders from the region will present their proposals to the presidents for improving and eliminating barriers to intraregional trade.
In the meeting with the presidents from the region scheduled for June 27 in the Dominican Republic, guilds that make up the Federation of Private Entities of Central America, Panama and the Dominican Republic (FEDEPRICAP), will describe once again the obstacles that currently limit the competitiveness of Central American companies.
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.
"We cannot continue to be a region where trade is moving at 15 kph when developed countries have cargo moving at 60 kph."
Employers believe that border points and customs offices in Central America are limiting their work and reducing their competitiviness despite the fact that they have been selling products to each other for over a decade.
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.
The Federation of Chambers and Associations of Exporters of Central America have joined their voices with those of businesses to oppose the tax for Attention to Victims of Traffic Accidents.
The Federation of Chambers and Associations of Exporters of Central America (Fecaxca) believes that the tax affects the competitiveness of a regional market in the process of development.
The regional freight sector has agreed to purchase insurance to protect accident victims.
Prensalibre.com.gt reports that "The government of El Salvador and cargo transport unions in Central America, agreed yesterday in "supporting" a legal reform which alleviates them from the payment of a tax on those who already pay insurance to cover against any accidents, an official said. "
There are too many entities in the field of integration and they do not seem to be working with the speed they should.
The President of FECAMCO (Federation of Chambers of Commerce of Central America), Mario Gonzalez, believes that together with the customs union, key to boosting development in the region, there are other factors to consider, such as legal certainty, investment in technical education and physical security of persons and property. "...to an investor it is not not attractive to come and invest in a single country, but coming to invest in a region with 40 million inhabitants is extremely attractive."
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.
The Federation of Chambers and Industry Associations of Central America and the Dominican Republic are demanding that governments provide efficient management and eliminate obstacles to the movement of goods.
At the last meeting held in Panama the Chambers of Industry urged their governments to have greater efficiency in customs procedures for trade in goods in Latin America.
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.
A Central American Economic Integration Situation Report details legal and institutional frameworks, trade of goods and the Central American Customs Unification process.
The report by the Central American Economic Integration Secretariat among other things refers to:
LEGAL AND INSTITUTIONAL FRAMEWORKS
-General Treaty of Central American Economic Integration.
El Salvador and Guatemala have agreed to accelerate the integration process between the customs offices of both countries, once again returning to the negotiation process.
Guatemala and El Salvador have decided to accelerate the process towards the Customs Union, and in order to achieve this their economic ministers will meet once a month.
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.
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