MercoPress. South Atlantic News Agency

US-Central America free trade market

United States and five Central American countries signed last Friday a free trade association, CAFTA, which once it becomes effective, following Congressional approvals, will liberate 80% of bilateral trade that in 2003 reached 23 billion US dollars.

The document was signed in the Americas Room of the Organization of American States, OAS, in Washington by US Trade Representative Robert Zoellick and negotiators Mario Arana from Nicaragua, Marcio Cuevas from Guatemala; Norman Garcia from Honduras, Miguel Lacayo, El Salvador and Alberto Trejos, Panama.

In the same OAS room in the seventies former president Jimmy Carter and Panama's former strongman Omar Torrijos signed the Panama Canal agreement and Ronald Reagan in the eighties launched his Caribbean Basin Initiative. Just two years ago President George W. Bush invited Central American countries to jointly explore free markets.

"Cafta is essential for the new economy that will consolidate development in Central America", said US Representative Robert Zoellick.

Mr. Trejos from Costa Rica indicated it was a "good agreement, in line with our objectives to promote growth and generate new economic opportunities".

EL Salvador Economy Minister Lacayo said the agreement helps to look into the "future with optimism" and "improves transparency and the rule of the law in the region".

Mr. Cuevas from Guatemala stressed that he hoped the agreement "will open the doors to progress and generate the economic activity we need, particularly helping rural areas, the most depressed".

Mr. García from Honduras was rejoiced with the event and certain "that trade integration will boost our economies".

"We're setting the foundations for a new Nicaragua", said the country's Minister of Industry.

However OAS Under-Secretary General Luigi Einaudi cautioned that the accord was not a panacea but a strong tool for prosperity that can be reached "if the necessary reforms to improve Central America's open market competitiveness are made possible".

During the signing ceremony there were some street protesting by environmentalists and labour groups, but the most acid criticism was from The Washington Post that described the agreement as "hypocritical" since it will further open the region for US exports while banning a sugar free market with Central America.

If, as all indicates sometime in the next two months Dominican Republic also joins Cafta, the region will become the second US trade partner of the Americas behind Mexico totalling an annual exchange of over 30 billion US dollars.