Brussels, 01/08/2013 (Agence Europe) - The trade strand of the association agreement concluded with the six countries of Central America will apply as of 1 August with Honduras, Nicaragua and Panama.
The free-trade agreement planned as part of the association agreement signed in June 2012 between the EU and Central America (Costa Rica, Guatemala, Honduras, Nicaragua, Panama and El Salvador) entered into force on 1 August between the EU on one side, and Honduras, Nicaragua and Panama on the other.
The trade section of the association agreement provides for the opening of the partners' markets in goods, public procurement, services and investment. The agreement also provides for the creation of institutions to examine issues linked to trade, and a mechanism for regulating trade disputes, and it contains arrangements on the protection of human rights and the respect of commitments on social and environmental standards.
The benefits of the agreement should be clearly more tangible for the countries of Central America due to their relative size - with Central America's GDP representing less than 1% of Europe's GDP. Once the agreement has entered into force in the whole region, the countries of the area that mainly export agricultural and fisheries products (coffee, bananas, pineapple, sugar, seafood) to the EU and some industrial goods (microchips, medical and optical chips) should record annual growth of over €2.5 billion.
The EU - exports from which to the Central American market largely comprise pharmaceutical products, cars and machinery - is Central America's second largest trading partner. In 2012, the trade in goods between the two regions stood at €14 billion (including €1.4 billion with Honduras, €1.2 billion with Panama, and €0.4 billion with Nicaragua).
The association agreement with Central America aims to strengthen economic integration between the six countries of the region and promote sustainable development. Although it also includes political dialogue and a chapter on cooperation, only the part on trade provisionally applies while awaiting the end of the ratification process by the 28 EU member states.
In a press release, European Commissioner for Trade Karel De Gucht says he hopes that the free-trade agreement will also soon be applied with Costa Rica, Guatemala and El Salvador. (EH/transl.fl)