Central American Ambassadors Say Trade Facilitation a Priority to Increase CAFTA Use
Central American ambassadors and the Secretariat for Central American Economic Integration asked an audience to rediscover the region as a source of trusted supply chain partners and a way to achieve quicker deliveries with a lower carbon footprint.
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In 2020, the U.S. imported $23.7 billion in goods from the Central America Free Trade Agreement nations (including the Dominican Republic) and exported $27.5 billion in goods to the region; those import numbers are down from six or seven years ago, when imports from CAFTA-DR countries were about $28 billion to $30 billion.
El Salvadoran Ambassador Milena Mayorga said that apparel, medical supplies and light manufacturing are integrated across the Central American countries, and that the area's strategic location can help American businesses. It's in the Central time zone, and has access to both the Atlantic and Pacific. “Generating opportunities will have a positive effect on migration,” she said during the nearshoring webinar March 16 hosted by the World Trade Center Washington, D.C.
Costa Rica's Ambassador Fernando Llorca Castro said that he recognizes that the state of roads, ports and digital infrastructure is still a challenge. But he said the countries are working to standardize their customs rules and implement single window filing.
Guatemala's Ambassador Alfonso Jose Quinonez agreed, saying trade facilitation is the key to more prosperity. He said one change in customs processes planned in his country will reduce the time to clear goods from hours to seven minutes. “And we know time is money,” he said.
Llorca said that it's not just that risk would be less working with Central American countries, because they're trusted, but also there's less opportunity cost with shorter transportation times. He said by using closer factories, you're “making your production more sustainable with a lower carbon footprint.”
Nicaragua's Ambassador Francisco Campbell Hooker said that the region wants to move beyond the idea that its cheap labor is the No. 1 reason to attract foreign investments. He said that Nicaragua is increasing renewable energy projects, and working to advance skilled labor. He said they need to “address the root cause of poverty and insecurity that for so long as afflicted the people of the region.”
All the countries represented said they'd prefer more trade, not aid, to provide opportunities, and therefore make migration less attractive.