Although Juan Orlando Hernández has now been declared as the winner of the elections and blockades and demonstrations have decreased, difficulties in transporting merchandise to and from Puerto Cortés, as well as land borders, remain.
As a result of the difficulties faced by entrepreneurs when transporting goods to and from Honduras, companies in neighboring countries are looking for alternatives to expedite shipments, especially those of perishable products.
The Hernández administration has denounced the fact that Guatemalan authorities are imposing non-tariff barriers on the entry of chicken from Honduras.
The head of the Ministry of Agriculture and Livestock of Honduras, Jacobo Paz, announced that since they have not been able to resolve the problem with their counterparts in Guatemala, they will submit the case to the Council of the Minister of Economic Integration (Comieco).
Negotiations have started to incorporate El Salvador into the Customs Union that is already functioning, albeit partially and with some setbacks, between Guatemala and Honduras.
Internal taxes, customs procedures, migration, tariffs and sanitary and phytosanitary permits are some of the issues to be addressed in the first round of negotiations between the Salvadoran government and its Guatemalan and Honduran counterparts.
Between January and August 2017 exports totaled $3,851 million, 6% more than in the same period in 2016, mainly explained by sugar exports.
From a statement issued by the Central Reserve Bank:
El Salvador's exports amounted to US $3,850.6 million up to August 2017, growing at a rate of 5.7% (US $208.5 million more) compared to the same month in the previous year, the Central Reserve Bank reported.In August alone, exports grew by 8.6%.
Businesses have reported difficulties when using the system that generates the invoice and the Central American single statement form and state that the three integrated customs offices are not working.
Integration of customs systems in Honduras and Guatemala started three months ago, but not in the agile way that the companies that trade in the region had hoped for.
In 2016 intraregional trade in hydraulic cement totaled $59 million, 18% less than in 2015, and the main exporter is still Costa Rica.
Figures from the information system on the the Hydraulic Cement Market in Central America, compiled by the Business Intelligence Unit at CentralAmericaData : [GRAFICA caption = "Click to interact with the graph"]
In 2016 Central American countries imported $881 million worth of food preparation ingredients, 12% more than in 2015.
Figures from the information system on thethe Food Preparation Ingredients Market in Central America, compiled by the Business Intelligence Unit atCentralAmericaData: [GRAFICA caption = "Click to interact with the graph"]
With the new intermediate custom post built in Sonsonate, El Salvador, the idea is to relieve traffic of heavy transport moving through the border of La Hachadura.
Construction of the new intermediate customs facility has already started at Metalío, and it is expected to be ready to start operations within three months.
Guatemalan businessmen are demanding stricter laws to combat the illegal entry of goods from Mexico, which are now being sold in El Salvador and Honduras.
Food and beverage companies say that in the municipality of Acajutla, El Salvador, it is possible to buy oil, flour and crackers that were illegally smuggled in from Mexico, first passing through Guatemalan territory, and eventually being sold on Salvadoran soil.
A free virtual seminar has been organized for July 4, on the topic of implementation of the Central American Single Declaration.
A free webinar organized by the Secretariat for Economic Integration (SIECA) entitled "Implementation of the Central American Single Declaration (DUCA)", and will be held online on July 4, from 9 am to 11 am.
The customs union between Guatemala and Honduras favors small companies in particular, as they do not have to deal with the costly and slow procedures for export and passage through customs offices.
Although it does not yet cover the entire tariff universe, the effective customs union between Honduras and Guatemala will facilitate trade between both countries and this will have a positive impact on the development of both economies.
With the entry into force of the Customs Union today, Guatemalan exporters plan to raise the growth rate of exports to the neighboring country from 0.6% to 1.6%.
From a statement issued by Agexport:
Guatemala, June 26, 2017.A 25% reduction in transportation and logistics costs, 75% bilateral free trade, speeding up of commercial procedures through electronic platforms, and use of the Central American Single Invoice and Statement (Fyduca) as an export document and invoice at the same time, are examples of the practical and concrete benefits that will be provided as of today as a result of the Guatemala - Honduras Customs Union which will comply with the tax payment process that corresponds to the merchandise.
The Morales administration has announced that they will be formalizing the crossing between Ingenieros, Quiché, and Nueva Orizaba, Chiapas, in order to facilitate cross-border trade in that area.
As part of this project, Foreign Minister Carlos Raúl Morales explained that a 19 kilometer road to Playa Grande is also planned.
In the view of Fitch Ratings, the likelihood of the trade agreement being renegotiated is low, but the region faces challenges "if US protectionism gains traction over the next few years."
From a statement issued by Fitch Ratings:
Fitch Ratings - New York - (May 16, 2017): While Central America and the Dominican Republic could benefit from the expected economic acceleration in the United States, these countries could also face challenges if US protectionism were to gain traction in the coming years, says Fitch Ratings.
The Salvadoran business sector is opposed to the decision of President Sánchez Cerén to veto reforms to the customs simplification law, which established concrete measures to streamline foreign trade procedures.
From a statement issued by the Inter-Trade Commission for Trade Facilitation (CIFACIL):
The Trade Facilitation Commission (CIFACIL), which groups together seven production unions from El Salvador, deplores the decision of the President of the Republic, Salvador Sánchez Cerén, to veto the reforms to the Customs Simplification Law, which were aimed at advancing the adoption of concrete measures to facilitate trade and which will help overcome the stagnation of foreign trade by our country.