Associated Press | Aug. 9, 2007
Colombia Inks Central America Trade Pact
By FERNANDO VERGARA Associated Press Writer
MEDELLIN, Colombia - Colombia signed a free trade agreement Thursday with Guatemala, Honduras and El Salvador that could double exports to the Central American countries in five years.
The agreement was signed by the four nations’ presidents in the northwestern city of Medellin, considered Colombia’s industrial heartland.
The accord "makes economic, social and political sense," Colombian President Alvaro Uribe said in a speech after signing the agreement. "Colombia sees this becoming a bridge between Central and South America."
The agreement, set to take effect next year, will eliminate tariffs and taxes on 75 percent of industrial products and 72 percent of agricultural products over the next 10 years on goods traded between Colombia and the three Central American countries.
Trade between Colombia and the three nations reached $275 million in 2006, with Colombia alone exporting $250 million in goods to the Central American nations.
Camilo Acevedo, president of the Colombian-Central American Chamber of Commerce, said Colombian exports to the Central American nations could reach $500 million in the next five years under the trade agreement.
Several Colombian companies are considering building textile factories in Guatemala, Honduras and El Salvador to take advantage of free trade agreements those nations have with the United States. Guatemala, Honduras and El Salvador, along with the Dominican Republic and Costa Rica, signed a free trade agreement with the United States in 2005.
Colombia has negotiated a free trade pact with the United States, but the Democrat-controlled Congress is holding off on ratification until stricter labor standards are implemented.