Central American nations meet, sign agreement with EU
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Meeting in Tegucigalpa, Honduras, the presidents of the Central American countries and Panama signed an Accord of Association (AdA) with the European Union on June 29 at a meeting of the Central American Integration System (SICA). The presidents emphasized the benefits that they expected from the lowering of trade barriers between the two regions. EU trade commissioner Karel de Gucht said, “The negotiation of this accord has taken much time and effort as well as resources, but this is not the end of the process.

 

Before it can go into effect, it will have to be approved on both sides by our legislatures.” He told a meeting of business people that the AdA is expected to increase the Gross Domestic Product of Central America by €2.5 billion yearly (approx. US$3.164 billion). Previous Free Trade Agreements have shown, however, that an increase in GDP does not translate into an improved standard of living in countries that adhere to neoliberal economic prescriptions. Indeed, populations displaced by cheaper foreign production are usually much worse off.

 

 

The presidents agreed to incorporate Panama into the Secretariat for Central American Economic Integration (SIECA) and include that country in the agreement with the EU. Nicaragua had demanded that, in order to participate, Panama had to submit to all the conditions required of the other countries and, because it was incorporated into the talks later, will thus begin its participation later. The trade portion of the AdA will not go into force until 2013 at the earliest, depending on when the European Parliament and the legislatures of the Central American countries ratify the agreement. The agreement between the EU and each country will go into effect at the time each ratification takes place.

 

Mario Amador, president of the Nicaraguan Chamber of Industry, said that Nicaragua could benefit in spite of the economic problems of Europe. He noted that Nicaragua produced food and said, “You can stop buying clothes but you can’t stop eating.” Trade Minister Orlando Solorzano said, “We have the great advantage that this crisis is financial and our capacity is in agro-industry. What we need to do is produce food of higher quality. We are already exporting to that market and we have 37 plants certified, but we need to certify more.” In 2011, Central America exported US$4.2 billion to the EU. On the day the agreement goes into force 91% of Central American products will enter the EU tariff free and 69% of European industrial exports and fish will enter Central America freely. Some sensitive products such as tuna fish, textiles and plastic will be protected longer.

 

At the beginning of the meeting, President Daniel Ortega took over the office of president of SICA for a one-year term. The 36 point declaration emitted at the end of the meeting, which was the 39th SICA summit, noted that “it is necessary to deepen [Central American] integration in order to maximize the social and economic development of the region.” The presidents also agreed that social programs “demand more attention” from governments because they “are directed at achieving higher and better levels” of wellbeing for their countries’ populations. Civil society groups that organized forums at the event noted that the greatest challenge to the tranquility of the region was drug trafficking because Central America, as a result of its geography, is the channel through which the drugs pass from their source in the south to the consumers in the north.

 

(La Prensa, June 29; El Nuevo Diario, June 29; Radio La Primerisima, June 29; Informe Pastran, June 29, July 2)