EU-Central America agreement celebrates 10th anniversary

At the annual Association Committee, the EU, Costa Rica, El Salvador, Honduras, Guatemala, Nicaragua and Panama agreed to further deepen the agreement by protecting eleven new geographical indications from Central America directly under the agreement, reflecting the interest of the parties to protect local knowledge and high-quality food products and to boost rural development. The parties also agreed to modernise their common rules to simplify customs rules and procedures.

Recognising this long standing and fruitful trade relationship between the EU and Central America, Executive Vice-President, Valdis Dombrovskis, said: “The Association Agreement has delivered good results for both sides. Beyond its clear trade and economic benefits for small and medium companies, the Agreement has consolidated our relationship based on trust, cooperation and dialogue. This cooperation will also serve to share best practices, for example on reinforcing business models that encourage sustainable growth and the transition towards a green and circular economy, with low carbon emissions and efficient use of resources.”

The Agreement has allowed the EU and Central America to take their trading relationship to the next level, with trade between them almost fully liberalised. Since the Agreement was signed in 2012, total trade has increased from 8.7 billion Euros in 2012 to an all-time high of 12.9 billion Euros in 2021, an increase of 67%. EU exports to Central America have increased by 20%. Higher value-added products in particular have benefited: mechanical and electrical machinery has been the most important category of EU exports, with annual exports surpassing 1.1 billion Euros throughout the period. Pharmaceutical products have also shown important growth, with EU exports increasing by over 90%.

Central American exports to the EU also grew substantially with an 86% increase. Central America is an important supplier of climate-specific, agricultural goods that are in high demand in Europe. The main categories are agricultural products, such as bananas, coffee and sugar, imports of which have gone from 2.8 billion Euros in 2012 to 4 billion Euros in 2021- a growth of 44%. In speciality coffees, Honduras alone is now the 2^nd biggest supplier of organic coffee to the EU. Industrial products have also grown significantly since the Agreement was signed; for example, EU imports of optical and medical devices from Central America have gone from 189 million Euros in 2012 to 1.1 billion Euros in 2021- an increase of nearly 600%.

Trade has proven resilient and cooperation and dialogue under the Association Agreement between the parties remain strong. For example, two key conferences on sustainable food and pesticide management took place in October 2021 and March 2022 while a conference on the implementation of ILO conventions is planned to take place in the region after the summer.

For more information

Minutes of the Association Committee and subcommittee

The EU protects 11 new geographical indications from Central America

EU-Central America Trade

EU-Central America Association Agreement- Text