CAFTA-DR liberalizes bilateral trade between the United States and the region and promotes regional integration. It also obliges Central American countries to implement the necessary reforms to mitigate systemic problems in areas such as customs administration, protection of intellectual property rights, services, investment, financial services, market access and government procurement, as well as sanitary and phytosanitary barriers and other non-tariff barriers to trade. As a broad-based agreement, the free trade agreement covers trade in goods, trade in services, investment, competition, protection of intellectual property rights, government procurement, trade and sustainable development, and cooperation. In the area of trade in goods, EFTA will abolish all customs duties on industrial products from the entry into force of the Agreement, while the Central American States will do so after a transitional period. The agreement provides for the possibility for other Central American states to join the free trade agreement. The trade pillar of the Association Agreement has been provisionally applied with Honduras, Nicaragua and Panama since 1 August 2013, with Costa Rica and El Salvador since 1 October 2013 and with Guatemala since 1 December. The trade part of the Association Agreement will replace the unilateral preferential market access granted to Central America under the EU`s Generalised System of Preferences. The participants concluded the conference with an agreement on the establishment of the Court of Justice of Central America (Corte de Justicia Centroamericana). The Court would remain in force ten years after final ratification, and the communication would be made through the Government of Costa Rica. It was composed of five judges, one from each Member State. The court heard ten cases, five of which were brought by individuals (and declared inadmissible) and three of them were initiated by the court. The court operated from its headquarters in Costa Rica until April 1918; Despite efforts that began in March 1917 (when Nicaragua submitted a notice of termination of the agreement), it was later dissolved.

Central America introduced a common timetable for external tariffs in 1998. Six Central American countries signed a revised Protocol on Economic Integration and Macroeconomic Coordination in October 1993. The Integration Protocol allows Central American countries to move at different speeds towards more open trade. The main objective of the EU`s trade policy for Central America is to increase bilateral trade and thus strengthen the process of regional integration between the countries of the region. In practice, this means the creation of a customs union and economic integration in Central America. The EU has supported this process through its trade agreement and trade-related technical cooperation programmes. The Dominican Republic-Central America Free Trade Agreement (CAFTA-DR) is the first free trade agreement between the United States and a group of small developing countries: our Central American neighbors, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic. CaFTA-DR promotes stronger trade and investment relations, prosperity and stability throughout the region and along our southern border. Parlacen was born as a parliamentary body that imitated the Federal Republic of Central America, with Costa Rica as an observer. It evolved from the Contadora Group, a project launched in the 1980s to deal with civil wars in El Salvador, Guatemala and Nicaragua. Although the Contadora Group was dissolved in 1986, the concept of Central American integration is implicitly mentioned in the constitutions of several countries.

The Esquipulas Peace Agreement (among other things) agreed to the creation of a Central American parliament composed of 20 to 22 directly elected representatives from each country. Costa Rica has not ratified the agreement and is not represented in parlacen. The parlacen is considered a white elephant by some (including former Honduran President Ricardo Maduro). [10] The provisions on the protection of intellectual property rights (Chapter 6 and Annex XIX) concern, inter alia, trademarks, copyrights, patents and geographical indications and contain provisions on the enforcement of intellectual property rights and cooperation between the parties. They are based on the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and offer a high level of protection, taking into account the principles of most-favoured-nation treatment and national treatment. The Parties recognize that economic development, social development and environmental protection are interdependent. Chapter 9 reaffirms their commitment to multilateral environmental and labour agreements and principles and commits themselves to maintaining their level of protection. Trade in forest products is governed by a separate provision.

Arbitration shall not apply to this Chapter. The agreement contains detailed provisions on trade facilitation (Annex VII) which, inter alia, open the possibility of preliminary rulings and restrict the possibility of new fees and charges. The EU and the Central American region concluded a new Association Agreement on 29 June 2012. The Association Agreement is based on three complementary and equally important pillars, namely political dialogue, cooperation and trade, which are mutually reinforcing and have their impact. They are the right tools to support economic growth, democracy and political stability in Central America. Guatemala, El Salvador and Honduras made the fastest progress between them towards the elimination of trade barriers. In February 2015, the presidents of Guatemala and Honduras signed a general framework agreement establishing a customs union between the two countries. In 1991, the integration programme was advanced with the creation of SICA, which provided a legal framework for the settlement of disputes between Member States. SICA includes seven Central American countries and the Dominican Republic, which is part of the Caribbean. Central America has several supranational institutions, such as the Central American Parliament, the Central American Bank for Economic Integration and the Central American Common Market. The Central American trading bloc is governed by the General Treaty on Economic Integration (Guatemala Protocol), signed on 29 October 1993.

The CACM abolished tariffs on most products in all member countries, unified external tariffs, and increased trade within its members. The Bank has five non-regional members: Argentina, Colombia, Mexico, the Republic of China and Spain. This new agreement aims to promote sustainable development and deepen the process of regional integration. This closer economic integration between the countries of the Central American region is important to attract investment to the region and help local companies develop the strength of their regional market to compete internationally. For trade statistics of the EFTA-Central American countries, please consult this page. The Chapter on Trade in Services (Chapter 4) closely follows the concept of the WTO General Agreement on Trade in Services (GATS). .