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EU Signs FTA With Central America

by Ulrika Lomas,, Brussels

20 May 2010

European Union member states and nations of Central America concluded an ‘Association Agreement’ at a joint summit on May 19, 2010. The agreement removes tax barriers to trade between the two parties, facilitating increased economic activity between the two blocs.

The European Commission said the signing of the agreement was as a result of an intensive negotiation process, which resulted in an agreement on May 18. The conclusion of the agreement was hurried through having been championed by Spain, which is presiding over EU policy until the presidency is transferred in June. The six Central American countries party to the agreement, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama, engaged in talks with the EU in 2007.

The agreement stipulates 100% market access for industrial products on both sides, and allows capped exports of milk and cheese to the Central American market from Europe, and export quotas for bananas, beef and rice to the European bloc. European vehicles are also to be given tariff-free access to Central America over a transitional period of 10 years.

Speaking at the joint summit, Spanish Prime Minister, José Luis Rodríguez Zapatero said that by liberalizing bilateral trade between the two blocs, exports could be increased by around EUR5bn annually. He further noted that the agreement represented a further move towards freer trade, and the rejection of protectionism.

TAGS: tax | business | European Commission | free trade agreement (FTA) | Nicaragua | export duty | tariffs | Costa Rica | Guatemala | Spain | import duty | trade | European Union (EU) | El Salvador | Honduras | Panama | Europe

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