Countries and regions
The EU and the Central American region concluded a new Association Agreement, signed on 29 June 2012. The Association Agreement relies on three complementary and equally important pillars, namely political dialoque, cooperation, and trade which reinforce each other and their effects. These are the right tools to support economic growth, democracy and political stability in Central America.
The trade pillar of the Association Agreement has been provisionally applied since 1st August 2013 with Honduras, Nicaragua and Panama, since 1st October 2013 with Costa Rica and El Salvador, and since 1 December with Guatemala.
In trade flow in goods between the EU and Central America has increase significantly, by 15% in average between 2008 and 2012, up to EUR 14,9 billion.
The EU's share in Central American trade has remained largely stable at 11.3% in 2012. Historically the bulk of most Central America countries trade is with the USA and Latin America, and it is only recently that the region has actively sought to increase its trade with Europe and Asia.
- EU imports from Central America are dominated by office and machinery and transport equipment (59.6%) and agricultural products (30.1% in 2012).
- The most important exports from the EU to Central America are machinery and transport equipment (47.2%) and chemicals (21.5% in 2012).
EU-Central America (6) "trade in goods" statistics
|Year||EU imports||EU exports||Balance|
EU and Central America
Benefits of the Agreement:
- Elimination of most import tariffs. EU exporters expected to save €87 million annually in lower customs duties
- improved access to government procurement, services and investment markets
- better conditions for trade through new disciplines on non-tariff barriers to market access, competition, and intellectual property rights
- a more predictable environment for trade with a mediation mechanism for non-tariff barriers and a bilateral dispute settlement mechanism
- strengthening regional integration, for example by setting up a single import duty for the whole region and using a single administrative document for customs
- support for sustainable development, including the consultation of civil society stakeholders
The EU and Central America has maintained close and comprehensive relations for decades, reaching back to the EU’s support to the regions successful peace process in the 1980s.
The EU’s central trade policy objective for Central America are to increase bilateral trade and use it to strengthen the process of regional integration between the region's countries. In practical terms this means the creation of a customs union and economic integration in Central America. The EU has supported this process through its trade agreement and its trade-related technical cooperation programs.
This new agreement aims at fostering sustainable development and deepening their process of regional integration. This closer economic integration between the countries of the Central American region is important for attracting investment to the region and helping local businesses develop the strength in their regional market to compete internationally.
The trade part of the Association Agreement will replace the unilateral preferential access to its market which was granted to Central America under the EU’s General Scheme of Preferences.
Trading with Central America
- The EU is present on the ground in Central America (+ Delegations in Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama)
- Trade relations are part of the EU's overall political and economic relations with Central America
- Central America is one of the most integrated regions of the world, progressing towards a customs union and with elaborated potential integration mechanisms.