The free trade agreements signed by the European Union with Colombia, Honduras, Nicaragua and Panama have come into effect as of August 1. Analysts say the deals will boost investments, foster regional integration and help companies in Europe, Central America and the Andean region to save millions of dollars in trade tariffs.
“The door is still open for other Andean countries – Ecuador and Bolivia – to enter into the partnership,” said the EU, the second largest trading partner of the Andean region after the US, in a press release.
The trade agreements will open up markets for goods, public procurement, services and investment on both sides which will contribute to creating a stable business and investment environment based on predictable and enforceable trade rules, says an EU statement.
In 2012, the total trade flows in goods amounted to €14 billion ($18 billion), including almost €1.4 billion ( $1.8 billion) worth of trade with Honduras, €1.2 billion ($1.5 billion) with Panama and €0.4 billion ($0.5 billion) with Nicaragua.
The EU says the free trade agreements will help Central America’s economy grow by over $3.3 billion annually in the coming decade. The Central American countries export mostly agricultural and fish products to Europe, while the EU mainly exports pharmaceutical products, petroleum, cars and machinery.
The volume of trade between the EU and Colombia rose to $18 billion in 2012. EU Trade Commissioner Karel De Gucht said the agreements would open a new chapter in their business relationship and are evidence of the EU‘s interest and commitment toward the Central American countries.
Other countries, including Guatemala, El Salvador and Costa Rica, are also likely to sign similar agreements with the EU in the coming weeks.