National and regional authorities, international officials, and representatives of the private sector discussed in Antigua the progress made and the future of regional trade
ANTIGUA GUATEMALA, 10 November 2022 ¨C Trade authorities in the countries of Central America, officials from international organizations, and representatives of the private sector met today in Antigua Guatemala, to assess the progress made in the region in terms of commercial trade and to analyze possible reforms in the context of the event ¡°Trade Facilitation: the reactivation route.¡±
Organized jointly by the World Bank, the Central American Economic Integration Secretariat [Secretar¨ªa de Integraci¨®n Econ¨®mica Centroamericana, SIECA], and the pro tempore presidency of the Council of Ministers of Economic Integration [Consejo de Ministros de Integraci¨®n Econ¨®mica, COMIECO], the event addressed the issue of how to deepen the integration of the region¡¯s markets in goods and services and also had forums for the exchange of ideas and proposals with the private sector.
¡°The event allows us to assess the achievements in regional economic facilitation, announce priority initiatives in areas such as air freight cost reduction, express shipments and advance declarations, and begin the preparation of a new roadmap for the integration of regional markets," said Francisco Lima, Secretary General of SIECA.
¡°Central American economies have made substantial progress in trade facilitation and have signed an average of 9.5 trade agreements, almost twice as many as the Latin American and Caribbean region. However, they have great opportunities to further reduce the costs and times for intraregional and extraregional trade,¡± said Carlos Felipe Jaramillo, World Bank Vice-President for Latin America and the Caribbean. ¡°Ä¾¹ÏÓ°Ôº has been providing support through trade facilitation analysis and advice, which we regard as a key priority in order for the countries of the region to boost their economic recovery and return to the path of inclusive and sustainable economic growth."
The region has made progress in areas such as the Customs Union, for which the World Bank has provided technical assistance through the World Trade Organization's (WTO) Trade Facilitation Agreement (TFA) Implementation Support Program, along with other cooperating partners, but still faces challenges in terms of infrastructure and efficiency at border crossings. On average, a truck transporting cargo from the Mexico-Guatemala border through Central America to Panama moves at a speed of 18.5 km/h (11.5 mph). According to the "Clearance Times" study done by SIECA and Central American customs authorities, with the support of the World Customs Organization and the European Union, the average border crossing time, excluding waiting lines, is 9 hours.
Despite the achievements in trade facilitation in the region, there are areas where improvements can be made, such as the slowness of border procedures, low connectivity and adoption of technology, infrastructure problems, and non-standardized schedules at border posts, among others.
A recent World Bank study estimates that full implementation by Central American countries of their commitments in the WTO Trade Facilitation Agreement could reduce trade costs by 15.5 percent in the region, increasing intra-regional trade by 61 percent. In addition, extending the implementation of this Agreement to include Mexico would increase trade between Central America and Mexico by 130 percent and Central American GDP by 6.7 percent by 2030.
According to the same study, a 10 percent decrease in intraregional transportation costs could increase intraregional trade by 5 percent and the region's GDP by 0.3 percent by 2030. Increasing the reduction in transportation costs between Central America and Mexico would further increase Central American GDP by 0.4 percent by 2030.
Learn more about the work of the World Bank in Latin America and the Caribbean: www.worldbank.org/lac
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