Cafta : Challenges and Opportunities in the Agricultural and Agro-Industrial Sectors
2003
Monge-González, Ricardo | Loría-Sagot, Miguel | González-Vega, Claudio
A Central America Free Trade Area (CAFTA) has been under negotiation since January 2003. A World Bank report, Opportunities and Challenges for the Agricultural and Agroindustrial Sectors of Central America from a Free Trade Agreement with the United States of America, examines how a FTA between the US and CA countries might affect the agricultural and agroindustrial sectors of Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. Two main questions are addressed: (i) how to guarantee better US market access for CA's agricultural and agro-industrial exports, and (ii) how to promote greater openness to imports from the US of food products that are "sensitive" in each CAdomestic market. The authors analyze the structure of agricultural and agro-industrial exports and patterns of revealed comparative advantages in Central America (CA), and tariff and non-tariff barriers (NTBs) these exports face in the US. The report suggests that the CAFTA negotiations consider (i) lessons from Mexico's entry into NAFTA, (ii) existing protectionism in the US, and (iii) specific features of each CA country. It recommends domestic policy reforms to improve the competitiveness of CA producers of sensitive and new export goods.
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