El Salvador Free Trade Agreement

The Central American Group: According to my studies, there would be future Salvadoran free trade agreements with other countries. What is it? What should companies that want to do business in El Salvador do to use them? Worse still, CAFTA has contributed to the economic instability in the region. Development organizations have warned against CAFTA`s very thin passage that the agreement could lead to the ouster of family farmers, who make up a significant part of the workforce in Central America, by forcing them to compete directly with the heavily subsidized U.S. agricultural industry. Agricultural imports from the United States have doubled in Honduras, El Salvador and Guatemala since the agreement came into force, while countries` agricultural balance with the United States has declined, reflecting farmers` movements. The Dominican Republic-Central America Free Trade Agreement (CAFTA-DR) is the first free trade agreement between the United States and a group of small developing countries: our Central American neighbors, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic. CAFTA-DR promotes stronger trade and investment relations, prosperity and stability throughout the region and along our southern border. The free trade agreement between the Asian nation and El Salvador will enter into force on January 1 next year and the value exchanged between the two economies is expected to increase in the future. Johanna Hill: You can contact us via our website.

The address is www.catradeconsulting.com. You will find our email address and other contact information if you need us. Johanna Hill: I think it`s important to know the region and how The Salvadoran free trade agreements will affect the industry or certain products of investors. It is also important to look at the rules of origin to see if the quotas are applicable or if you have favourable market access that other competitors do not have. Suppose you have Asian competitors and you want to reach the U.S. market we have very favorable conditions. This is not only due to Salvadoran free trade agreements, but also to the proximity of the market. But sometimes the devil is in the details. I would recommend doing some research on what a particular product is in the various trade agreements. I would then say that our governments in general in Central America, and particularly in El Salvador, are very keen to establish close relationships with the various investors. We want to have a clear understanding of their needs so that we can contribute to the smooth running of their investments.

The Central American Group: What advice would you give to companies that want to engage in trade with Central America? Central American Group: It`s very interesting. Given the scale and scope of Salvadoran free trade agreements and limited agreements, how can foreign investors benefit from these agreements? Johanna Hill: I think there are two major benefits for investment and exports from Central America. The first is proximity to major markets. We are very close to Mexico and the United States, as well as the northern part of South America. As I said earlier, we have free trade agreements with countries in the region.

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