Honduras Free Trade Agreements

The Canada-Honduras Free Trade Agreement is a free trade agreement between Canada and Honduras that came into force on October 1, 2014. [1] From 2000 to 2010, Canada was in multilateral talks with Honduras, Guatemala, El Salvador and Nicaragua (together the Four or CA4s of Central America) for a free trade agreement between Canada and Central America. In the absence of an agreement between Canada and CA4 after twelve rounds of negotiations, Canada and Honduras began separate bilateral negotiations in 2010. The final agreement was signed on 5 November 2013 by the trade ministers of both countries, as well as by cooperation agreements on environmental protection and workers` rights. [1] The Republic of Honduras is a low-income middle-income country facing major challenges, with more than two-thirds of the country`s population living in poverty and about 46% in extreme poverty. Honduras ranked 78th out of 132 countries that measure institutions, policies and services to facilitate trade in countries as part of the Enabling Trade Index (WEF) (WEF) (2012). The Honduran trade regime is very open. Globally, the country`s exports face very good access to foreign markets. In return, the country is open to imports; However, the poor business environment (particularly cumbersome and cumbersome administrative constraints) and poor performance in essential commercial services, which enable infrastructure services, are significantly hampering foreign trade activities.

The implementation of many free trade agreements in recent years has led to some modernization and liberalization of the country`s trade and investment systems. Honduras` trading system is relatively open, with an average tariff rate of about 6% in 2012 (relatively stable at this rate for more than 10 years), a modest application of non-tariff barriers and without recourse to emergency measures. Agricultural products are subject to an average tariff of 10.5%, while the average tariff for non-agricultural products was 5.0%. Dairy products are covered by a relatively high average tariff of 22.5%, and some animal products are subject to a high maximum tariff of 165%. Honduras not only has free trade agreements with Colombia, Mexico, Chile, Taiwan and Panama, but also participates in the Common Market of the Americas (CACM), which includes Guatemala, El Salvador, Nicaragua and Costa Rica. As a member of the CMAC, Honduras applies a common external tariff (CET) for most items with a maximum rate of 15%, with a few exceptions. The CMAC also concluded free trade agreements with the United States and the Dominican Republic (CAFTA-DR) in 2004 and concluded a free trade agreement with the EU in 2011. The implementation of these free trade agreements has led to the modernization and liberalization of the country`s trade and investment systems. (WTO, 2012). Canadian Prime Minister Stephen Harper`s visit to the city of San Pedro Sula for the signing of the first formal agreement in 2011 was the first time since the 2009 coup that a foreign leader visited Honduras.

[2] Harper was criticized for starting negotiations with the government of Honduran President Pepe Lobo, with Canadian observers saying Lobo`s country was “a near-impoverished dictatorship”[3] and criticizing Canada`s lack of response to human rights concerns in the country. [2] For more information on these negotiations, please see additional information. Bertelsmann Foundation, 2012, Honduras Country Profile With regard to health and plant health measures (SPS), the lack of capacity to meet different standards has hampered the development of exports.

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