SUBREGIONAL/OFFICES

A New Perspective on the Trade in Goods and Services in Central America

Photo: culpix/Flickr

The dynamic integration of Central American countries and the Dominican Republic has generated greater trade in goods and services, as well as the resulting benefits for the population of market opportunities for small and medium-sized enterprises (SMEs). The document Trade in goods and services in Central America: a new perspective (in Spanish only), produced by the ECLAC Subregional headquarters in Mexico, analyses different challenges for the subregion and formulates actions and strategies to help countries prioritize subregional integration and promote SME participation.

The indicators analysed in the study point to the buoyancy of intraregional trade and the resulting benefits for the region. First, the study highlights the large number of Central American enterprises that are interrelated in direct or indirect production chains. Another important aspect covered is the diversification of intraregional trade, which is rapidly expanding into the service sectors. Lastly, a thriving intraregional trade performance depends on added value, level of intensity, technology and the share it represents in the global competitiveness and trade of the subregion.

The study is divided into four chapters. The first chapter analyses the subregion's most striking social and economic characteristics, and reveals that one of the main challenges is to reduce the number of people living in poverty. The second chapter describes the economic integration process, with an emphasis on progress in terms of trade and forming the Customs Union.

The Central American market is dominated by trade in low- and medium-technology products: 31% of intraregional exports fit this description. Exports based on natural resources account for 29% of internal trade, followed by medium-technology products.

The third chapter studies the international trade of the subregion's countries, and finds that trade liberalization and the strengthening of Central American integration have helped to increase intraregional and extraregional trade. Between 2001 and 2011, merchandise exports from countries of the Central American Common Market (CACM) went from 10.184 billion dollars to 27.57 billion dollars (which represents an average annual growth rate of 10.5%). However, the greater proportion represented by imports means that all countries have international merchandise trade deficits.

The fourth chapter considers the growing importance of the worldwide trade in services, detailing the development, characteristics and trends of services in the subregion and the share and progress of such trade in Central American countries.

Lastly, micro-, small and medium-sized enterprises (MSMEs) continue to provide a considerable source of employment in the subregion's countries and account for a large proportion of GDP. MSMEs represent the most common type of enterprise, and they are therefore essential for strengthening integration in the subregion. Despite the fact that MSMEs do not usually export, when they do so, it is usually to neighbouring countries in the subregion (which underscores how important regional integration is to them). Furthermore, the main customers of SMEs are other businesses, which are usually part of national and regional production chains.

The document was produced by the ECLAC Subregional headquarters in Mexico, with the support of the General Secretariat of the Central American Integration System (SG-SICA), the Secretariat for Central American Economic Integration (SIECA), the Centre for the Promotion of Micro-, Small- and Medium-sized Enterprises of Central America (CENPROMYPE) and the Spanish Agency for International Development Cooperation (AECID).

 


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  Between 2001 and 2011, merchandise exports from countries of the Central American Common Market (CACM) went from 10.184 billion dollars to 27.57 billion dollars (which represents an average annual growth rate of 10.5%).
 
  Micro-, small and medium-sized enterprises (MSMEs) continue to provide a considerable source of employment in the subregion's countries and account for a large proportion of GDP.