San José, Costa Rica, since 1956

Mexico-Central America free-trade negotiations advance


The second round of negotiations for a single Mexico-Central America Free Trade Agreement – as opposed to the series of agreements now in force – began Monday in El Salvador and will end on Wednesday, the Mexican Economy Secretariat announced.
“One of the benefits expected from signing this treaty is supporting small and medium businesses in the region, because it will reduce transaction costs,” the secretariat said in a statement.
The purpose of the single free-trade agreement is to meld into a single instrument the three separate free-trade agreements Mexico has signed with Central America: one with the nations of the Northern Triangle (Guatemala, Honduras and El Salvador), one with Nicaragua and another with Costa Rica.
Negotiations are expected to end in 2012, the statement added.
The new treaty “will expand the free-trade area and will allow economic players to have a single set of trade rules,” which will “facilitate and encourage the flow of trade and investment between the six participating countries,” the secretariat said.
Currently, “many provisions” must be adhered to for those who wish to benefit from the three existing treaties, the secretariat acknowledged.
Central America represents a market of 38 million people and “Mexico is the source of only 8 percent” of the region’s total imports, which indicates “there is room to increase exports of Mexican products and services” to the region, detailed the secretariat.
Total Mexican investment in the five Central American countries is about $5 billion.

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