Economy & Business - June 2024

REGION | Full entry into effect of Central America-European Union (EU) Association Agreement. On 1 May the Association Agreement which was signed in June 2012 by the European Union (EU) and the Central American states (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama) took effect. The European Parliament gave its consent on 11 December 2012, and on 17 January 2024 the ratification procedures of the agreement by member states were finalised. On 12 April the European Council then adopted a decision to conclude it, paving the way for the agreement to take effect on 1 May. According to the EU, the agreement aims to “strengthen and consolidate the relations between the parties through an association based on three mutually reinforcing and fundamental parts: political dialogue, cooperation and trade”. The trade pillar of the agreement has been provisionally applied however since 1 August 2013 with Honduras, Nicaragua, and Panama, since 1 October 2013 with Costa Rica and El Salvador, and since 1 December 2013 with Guatemala. Among other things, under the agreement the EU removed tariffs for 73% of its agricultural tariff lines which correspond to around 64% of agricultural imports from Central America. Central America removed tariffs on 67% of its agricultural tariff lines, covering around 62% of agricultural imports from the EU. The Association Agreement also eliminates almost all tariffs on manufactured products and fisheries. The trade flow between the EU and Central America amounted to €22bn (US$23.8bn) in 2023 on figures from the EU statistics agency (Eurostat).

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