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TRADE-CENTRAL AMERICA:
Integration Bogged Down Up to Its Axles

José Eduardo Mora


SAN JOSE, (IPS) - Integration is one of the most pressing challenges facing the seven nations of Central America, but the governments in the region merely declare their good intentions while showing a clear lack of political will to pull the process out of the current stagnation, say experts.

The Council of Ministers for Central American Economic Integration (COMIECO), made up of the economy ministers from the seven countries, does not plan to complete negotiations on the customs union -- which involves 93 percent of products traded in the region, but excludes the most sensitive sectors, like sugar and steel -- until December.


 

 

The next summit, to be held in late August in El Salvador -- at a still unspecified date -- looks like it will offer the best chance to discuss concrete reforms of bodies like the Central American Parliament (PARLACEN), created in 1987, and the Central American Integration System (SICA) and the Central American Court of Justice (CACJ), both established in 1991.

Efforts towards integration among Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama have been at a standstill since 1998, when hurricane Mitch devastated a large part of the region and forced the governments to concentrate on their own national agendas to the detriment of regional issues, Luis Guillermo Sol¡s, with the Foundation for Peace and Democracy, told IPS.

Francisco Garc¡a, of the Guatemala-based Central American Institute of Political Studies (INCEP), and Nicaraguan sociologist and economist Cirilo Otero also agreed that a review of the Central American integration process is urgently needed at a time when the world is ruled by large alliances and trade blocs.

"This process directly depends on the political will of the governments and of the sectors that could help promote integration. At present I think political will is weak, with the presidents saying one thing in their speeches while failing to take the decisions that should back up their statements,'' said Sol¡s.

Otero expressed little optimism regarding the outlook for Central American integration, adding that, as a final complication to relations, the free trade agreement negotiated with the United States by five of the nations "only rubbed more salt in the wound."

Guatemala, Honduras, Nicaragua and El Salvador signed a free trade deal with Washington in December 2003. But the fifth country involved in the talks, Costa Rica, only did so a month later, highlighting the important differences among the Central American nations on sensitive issues like textile, sugar and chicken quotas.

Furthermore, the treaty has not yet been ratified by the respective parliaments.

Thus, once again, "each country showed their interest in stressing their individuality," despite the fact that according to the shared rhetoric, the countries engaged in the negotiations on a regional basis, said Otero.

In Sol¡s's view, meanwhile, the San Salvador summit -- where integration mechanisms are to be reviewed following pressure from Guatemala and El Salvador -- must adopt firm decisions, because otherwise the indecision which has characterised the process since 1998 will only continue.

"If the best use is not made of the meeting, I think it will be difficult for the issue of integration to be taken up seriously again. The summit cannot end with another content-free reform. The system cannot stand it any longer," he said.

Sol¡s argued that the governments and business and civil sectors must increase awareness of the overwhelming importance of integration for the region, as this is the way forward.

He underscored the contribution of the European Union (EU), which has been the leading partner for Central America in building a regional bloc, earmarking some 60 million euros to that effect over the next few years.

But "despite the enormous contribution from the EU -- which is the most perfect integration experience ever -- if there is no internal interest in each one of our countries, only minimal advances will be made," said Sol¡s.

Civil society must demand more from the governments with respect to regional unity, because even sectors like business will reap great benefits, he added.

"In the case of Costa Rica, for example, Nicaragua is its second biggest trade partner," while the United States takes 54 percent of its exports.

Meanwhile, Garc¡a pointed out that Central America is still lagging in the global trend towards the formation of large trade blocs, like the EU, the North American Free Trade Agreement (NAFTA - Canada, Mexico and the United States), the Southern Common Market (MERCOSUR - Argentina, Brazil, Paraguay and Uruguay) and regional groupings in Asia.

"There is a quest to concentrate production and capital and Central America cannot isolate itself from that tendency," said the Guatemalan analyst.

He added that the institutions charged with strengthening integration, like SICA and the CSJ -- in which only El Salvador, Guatemala, Honduras and Nicaragua participate fully -- and especially PARLACEN, are in need of profound change.

"For instance, the resolutions of the Central American Parliament are not binding, whereby the national congresses take no notice of them. That would be a good place to start, in order for the institution to have a raison d'etre," he argued.

Sol¡s said something similar, stating that while PARLACEN receives large contributions from the governments, its decisions "have no impact." Accusations of drug trafficking and corruption levelled at PARLACEN members some months ago further tarnished its already battered image.

PARLACEN is currently made up of El Salvador, Guatemala, Honduras and Nicaragua. Costa Rica, which is listed as a member, has repeatedly refused to appoint any parliamentary deputies.

As a result, one of the proposals suggested for the San Salvador summit is to significantly reduce the size of the regional parliament, and some propose that each nation's representatives should be deputies from their national parliaments.

For his part, Garc¡a believes that reform of the key integration institutions needs to be accompanied by advances towards a customs union, which would represent a revolution in intra-regional trade.

From Otero's point of view, each country is seeking to use its individual strengths to its own advantage, which bogs down integration efforts -- an issue that has not yet been raised as a point of concern.

"Efforts by the presidents are still very weak and it is clear that this is a political issue," he said.

Otero added that the shadow that the United States has historically cast over the region is a negative element, unlike what is happening with the EU, which is providing more constructive pro-integration support.

Moreover, he criticised SICA "for not calling on civil society to express its views with respect to integration."

"It basically concerns itself with the bureaucratic actors in the process and excludes social agents, who play a decisive role," he said.

For all three analysts, the current state of Central American integration to some extent reflects what has historically occurred in the region.

The first attempt at union in the isthmus came in 1824 with the creation of the Central American Federation, and since then a great many agreements have been reached, all marked by complete failure on the integration front.


 

 
   

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