Bright Spots in Trade: Central America
If you have been reading recent global economic news, you will see headline after headline about negative trade growth. But there are a few bright spots and one such spot is Central America.
According to the World Bank – Central America is poised for an expansion of 3.8 percent.
What has helped Central America have been the same factors that have hurt much of the rest of Latin America, which is projected to experience slower growth rates. Central American economies are very much tied to the U.S. economy and have little in the form of trade or dependency on China. The strong U.S. market has been a positive boon for the region. In the case of Panama – the expanded Panama Canal and the significant investments it has made in logistics and trade infrastructure have proven to be significant catalysts. They currently boast a 2.5 percent unemployment rate.
There are new recent developments and initiatives which are positioning Central America for even stronger growth. Early this month, South Korea and Central America (Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica and Panama) concluded their 5th round of trade talks and expect to accelerate their negotiations to finalize the agreement sooner than later. South Korea is the 4th largest economy in Asia and has been increasing its trade and investment with Latin American in the past few years.
Honduras has also been taking steps to improve their economy. They have received recognition from both the International Monetary Fund and the World Bank for their positive steps toward reform and growth. Honduras has recently launched the “Honduras 20/20” National Development Plan to generate 600,000 jobs during a five-year period (2016 – 2020), by promoting four key sectors where Honduras has a strong competitive advantage: tourism, textiles, intermediate manufacturing and business process outsourcing (BPOs).
Central America is one of Florida’s most important trading partners. Honduras is Florida’s 9th ranked merchandise trade partner and Costa Rica (7), Panama (8) and Honduras (9) are leading export destinations for Florida merchandise exports. Florida’s merchandise exports to Panama have grown 13 percent year to date.