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Common Central American Market (MCCA)

He Common Central American Market (MCCA) It is made up of Guatemala, El Salvador, Honduras, Nicaragua, and Costa Rica. It is governed by the General Central American Economic Integration Treaty of 1960 and its modifying protocols. [ 2 ] ​

The Economic Commission for Latin America and the Caribbean (ECLAC), created in 1948 within the United Nations Organization System (UN), encouraged the regional integration of Ibero -American countries. Under its influence the Central American Common Market emerged (MCCA)

Common market importance [ To edit ]

In 1960 it is the year of creation of the MCCA, until 2014. The regional trade of goods has shown a very dynamic behavior; In the period 1960-2014, regional trade grew at an average annual rate of 11.1%, from 30 million dollars in 1960 to 9,031 million in 2014. This growth was higher than that shown by exports to exports to destination To other markets in the world, which grew in the same period at an average annual rate of 7.6%, from 410 million dollars in 1960 to 21,209 million dollars in 2014.

This dynamism was interrupted only in the five -year period from 1981 to 1985, the product of the world crisis of the year 1980 and the political crises and civil wars of some Central American countries such as Nicaragua and El Salvador. As well as in 2009 for the international financial crisis that affected world trade.

The regional trade growth rate has also suffered a slowdown for some years, with growth rates of 3.5 percent in 2011, 0.9 percent in 2012. However, the growth of 5.6 percent in 2013 shows signs of recovery of regional exports.

Commercial relations with third parties [ To edit ]

The commercial block formed by the United States, Mexico and Canada, members of the North American Free Trade Agreement (NAFTA) is the main commercial partner of the MCCA. For 2014, 36.6 percent of all exports in the region were sold to these markets, especially to the United States, the main buyer over high margin. The same goes for imports, since this block comes 45.3 percent of all Central American imports.

The economic blocks of South America Andean and Mercosur community maintain a little participation within the Central American trade with 1.1 percent of all exports in the region and 5.0 percent of all imports.

The Caribbean Community (CARICOM) has a participation in relatively low commercial exchange. It represents 1.5 percent of exports and 0.4% of imports from Central America.

The economic bloc formed by the countries of the European Union maintains an important participation within the commercial exchange of the region, when buying 13.4 percent of all Central American exports and selling 7.8 percent of all imports. The EU also plays an important role through cooperation projects. Through the Association Agreement between Central America and the European Union (AACUE) also plays an important role as cooperative and through technical assistance. The AACUE was signed on June 29, 2012 at the Summit of the Central American Integration System (SICA), in Tegucigalpa, Honduras. [ 3 ] ​

For its part, the commercial block of the Asian Southeast Nations Association (ASEAN), maintains an important commercial relationship with Central American countries, buying 2,230 percent of exports and selling 1.9 percent of all imports.

Despite date of 1960, it was not until the mid -1980s that the MCCA became a large economic entity. All this was completed with various agreements with other international organizations, among which the agreement signed in 1985 with the European Economic Community can be highlighted and that an import tariff was completed. Likewise, in 1987 the constitutive treaty of the Central American Parliament was signed and in 1990 a new payment system was established.

In 1990, Central American presidents agreed to restructure, strengthen and revive the integration process, as well as their agencies. In April 1993, a free trade agreement was reached that has aimed the exchange of most products, capital liberalization and free mobility of people.

The reform agreed in July 1997 also contemplates the strengthening of the Central American Parliament, the reform of the Central American Court of Justice and the unification of the Secretariats in a single General Secretariat.

Commercial regime [ To edit ]

There is free trade among all countries (harmonized up to a current 96% of the total products), in accordance with the provisions of Chapter II of the General Central American Economic Integration Treaty, with the only exception of a list of products included in the Annex A of said treaty.

The goods of this annex, which do not enjoy free trade and that are subject to special commercial regimes, are the following:

With restriction in the five countries:

  • Without toast coffee: subject to the payment of import tariff rights
  • Cane sugar: subject to import control

With bilateral restrictions:

  • Tostado Café: Costa Rica with El Salvador, Guatemala, Honduras and Nicaragua. Subject to the payment of import tariff rights.
  • Ethyl alcohol, whether denatured or not: El Salvador with Honduras and Costa Rica. Subject to Import Control
  • Oil derivatives: Honduras and El Salvador. Subject to the payment of import tariff rights.
  • Distilled alcoholic beverages: Honduras and El Salvador. Subject to the payment of import tariff rights.

Institutionality [ To edit ]

1. General Treaty of Central American Economic Integration:

Subscribed on December 13, 1960, it is the legal instrument established by the Central American Common Market (MCCA), made up of Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua from the improvement of a free trade zone and the adoption of a uniform Central American tariff. Also in this instrument the commitment to constitute a customs union between its territories is reflected.

2. Tegucigalpa protocol to the ODECA letter (Tegucigalpa protocol):

Subscribed on December 13, 1991 by Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama. Through this protocol, the Central American Integration System (SICA) is constituted as the institutional framework of the region, composed of the original Member States of ODECA (Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua), incorporating Panama as a member state as a member state . In December of the year 2000, the Belize government adheres to the SICA as Member State and in December 2003 it is done by the Dominican Republic as associated status.

The SICA has as a fundamental objective, the realization of the integration of Central America, to constitute it as a region of peace, freedom, democracy and development.

3. Protocol to the General Treaty of Central American Economic Integration (Guatemala Protocol):

Subscribed on October 29, 1993, it establishes and consolidates the economic integration subsystem, adapting it to the new institutional framework of the SICA and the current needs of the countries of the region. The basic objective of the economic integration subsystem is to achieve the equitable and sustainable economic and social development of the Central American countries, which translates into well -being of their peoples and the growth of all member countries, through a process that allows the transformation and modernization of Its productive, social and technological structures, raises competitiveness and achieves an efficient and dynamic reintegration from Central America in the international economy.

Through this instrument, the States parties undertake to achieve voluntarily, gradual, complementary and progressive, the Central American Economic Union whose advances must respond to the needs of the countries that make up the region.

They are part of the economic integration subsystem, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama, whose incorporation was completed in May 2013.

The institutional organization of the economic integration subsystem is as follows:

Organs:

a) The Council of Economic Integration Ministers.

b) The Intersectoral Council of Ministers of Economic Integration.

c) The Sector Council of Ministers of Economic Integration.

d) The Executive Committee for Economic Integration.

Technical – Administrative Organs:

a) The Secretariat of Central American Economic Integration (SIECA).

b) The Secretariat of the Central American Agricultural Council (Dryc).

c) The Secretariat of the Central American Monetary Council (SCMCA)

d) The Secretariat of Central American Tourist Integration (SITCA).

Institutions:

a) The Central American Bank for Economic Integration (BCIE).

b) The Central American Institute of Public Administration (ICAP).

c) The Central American Institute for Industrial Research and Technology (ICAITI)

The advisory body is the Advisory Committee on Economic Integration (CCIE).

4. Central American Tariff and Customs Regime Agreement:

Signed in Guatemala City in December 1984. A new Central American tariff and customs regime is established through this agreement to respond to the needs of the reactivation and restructuring of the economic integration process, as well as those of its economic development and social.

The regime consists of:

a) The Central American import tariff, formed by the items with the tariff rights that appear in Annex “A” of the agreement;

b) the Central American uniform code and its regulations;

c) The decisions and other common tariff and customs provisions that derive from the agreement.

They are regime organs:

a) The Central American Tariff and Customs Council, composed of the Ministers of Economic Integration;

b) The Technical Committees: Tariff Policy Committee and Customs Committee; and

c) The Secretariat.

5. Treaty on investment and trade of services:

Signed by the presidents of Central America in the city of San Salvador, Republic of El Salvador on March 24, 2002. Modified by the protocol of February 22, 2007 and the protocol of July 27, 2011.

Among the main objectives pursued by said treaty are to establish a legal framework for the liberalization of services and for investment between the parties, in consistency with the General Central American Economic Integration Treaty, the General Agreement on the Commerce of Services ( A.G.C.S) which is part of the WTO agreement, as well as other bilateral and multilateral instruments of integration and cooperation. This framework will promote the interests of the parties, on the basis of reciprocal advantages and the achievement of a global balance of rights and obligations between the parties. It also seeks to stimulate the expansion and diversification of the trade of services and investment between the parties.

The protocol to the treaty of February 22, 2007, has been ratified by the republics of El Salvador, Guatemala and Honduras, being pending Costa Rica and Nicaragua. The July 27, 2011 protocol is in the process of ratification by the five countries.

References [ To edit ]

See also [ To edit ]

external links [ To edit ]