Central American Exports grow by 86% in 10 years after the signing of the Association Agreement with the EU

Among the prominent Central American exports to the EU are coffee and bananas. The beginning of June 2022 marked the tenth anniversary of the signing of the treaty.

Central American exports to the EU have increased

Central American exports to the European Union (EU) grew by 86% during the first decade in which the Association Agreement (AA) was in force. This figure was reported by the General Directorate of Trade of the regional bloc.

According to this office, Central America is an essential supplier to the European Union of specific agricultural products. In this category, coffee, bananas, and sugar stand out. The combined total of these exported commodities went from 2.8 billion euros in 2012 to 4 billion euros (about US $4.2 billion at current exchange rates) in 2021, which represented a growth of 44%.

As for specialty coffees, Honduras has become the second largest supplier of this class of products to the European bloc. Furthermore, the sale of industrial products from Central America has also increased exponentially: European Union imports of medical devices and optics went from 189 million euros in 2012 to 1.1 billion euros in 2021 (approximately US $1.15 billion). This figure represents an impressive increase of 600%.

“The Association Agreement between Central America and the European Union has produced positive results for both parties. Beyond the clear commercial and economic benefits enjoyed by small and medium-sized companies, the Agreement has consolidated the relationship between the two regions in a way that is based on trust, cooperation, and dialogue,” commented Valdis Dombrovskis, EU Executive Vice President and Trade Commissioner.

The official added that the cooperation generated by the Association Agreement that has boosted Central American exports “will enable the signatories to share best practices. For example, this includes reinforcing successful business models that promote sustainable growth and the transition towards a green and circular economy that produces low carbon emissions and efficient use of resources”.

Medical Devices dominate exports from Costa Rica to the EU

Last February, the trade section for Central America of the EU highlighted that Costa Rica’s exports have probably been the “most robust.”  In this area, there has been more diversification” because, beyond traditional products, such as bananas and coffee, Costa Rican manufacturers have boosted the sale of medical devices and other medical products.”

After Costa Rica, Guatemala is the second country that has taken the most advantage of the Agreement to boost Central American exports to date. As of this writing, a third producer of Central American exports, El Salvador still has much room for improvement in reaping the full advantage and benefits of the accord.

Exports to Central America from the EU

On the other hand, EU exports to Central America have increased by 20% over the last ten years. The category that has benefited the most is mechanical and electrical machines produced by European Union members. These products’ annual exports from the EU have exceeded 1.1 billion euros throughout the ten years since trade representatives from the two regions signed the Association Agreement. In addition, the sale of pharmaceutical products manufactured in European nations also grew by more than 90%.

Overall, total trade between the two regions rose from 8.7 billion euros in 2012 to an all-time high of 12.9 billion euros in 2021 ( US $13.5 billion approximately). This figure represents an aggregate increase of 67%.

“The Association Agreement has allowed the EU and Central America to take their commercial relationship to the next level, with trade between the two trading blocs almost completely liberalized,” the EU representative said in a statement published on the occasion of the tenth anniversary of the signing of the accord.