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EU Trade Deal With Costa Rica, El Salvador Now Operational

by Ulrika Lomas, Tax-News.com, Brussels

02 October 2013


The Central American economies could benefit to the tune of EUR2.5bn (USD3.4bn) a year once an Association Agreement with the European Union (EU) is fully in force.

The European Commission made the claim as it was announced that the Agreement's trade pillar would enter into force in Costa Rica and El Salvador from October 1. The EU and Honduras, Nicaragua, and Panama have been applying the Agreement since August 1. Guatemala is finalizing procedures to allow for provisional application soon.

The agreement is based on three pillars – trade, political dialogue, and development co-operation. At present, only the trade pillar can apply, as the Commission awaits ratification of the Agreement by all 28 EU member states.

EU Trade Commissioner Karel De Gucht said of the deal: "This is the first true region-to-region Association Agreement signed by the EU. I am pleased Costa Rica and El Salvador can now benefit from the trade deal, which is an important step towards our goal of applying the agreement to the whole region. We are looking forward to Guatemala joining very soon. The agreement will be a major stimulus for the economic integration of Central America. Now it's up to companies on both sides to take full advantage of the many opportunities the deal offers."

The EU is the second largest trading partner for Costa Rica and El Salvador.

The Commission describes the trade portion of the Agreement as ambitious, and says that it will open up new markets and simplify rules. The aim is to boost trade and investment in both regions.

The Agreement also sets out rules for public procurement, the protection of intellectual property, and the removal of technical barriers to trade. It introduces a system of consultation at a number of levels, to allow for an open dialogue on specific trade concerns, and contains a bilateral dispute settlement mechanism.

TAGS: tax | investment | European Commission | Nicaragua | intellectual property | trade treaty | agreements | Costa Rica | Guatemala | trade | European Union (EU) | El Salvador | Honduras | Panama | Europe | Central America

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