Central American Common Market Research Articles

Treatment of Cultural Services in Central American Countries’ Preferential Trade Agreements

Cultural products (including goods and services) encompass visual, performing and literary arts, as well as newspapers, magazines, books, films, video and music recordings, radio and television, either in traditional or digital format. To the extent that they reflect the cultural identities of states, their treatment in international trade has been debated as to whether, or the extent to which, they should be exempted from trade obligations. The proliferation of preferential trade agreements and of digital platforms has rendered the debate ever more salient. The article summarizes the provisions on cultural services in Central American countries’ preferential trade agreements and discusses the scope of these provisions, in light of the cultural policy measures involved and states’ ability to pursue cultural policies. The countries considered are those belonging to the Central American Common Market, namely Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama. These countries share some characteristics which make them worth considering in regard to the trade and culture debate. They also vary widely with respect to the number and scope of their commitments and/or exceptions relating to culture within the preferential trade agreements to which they are parties. In turn, such significant variations are primarily attributable to the importance each Central American country attaches to the protection of its cultural sector.

THE «FOOTBALL WAR»: THE SALVADOR-HONDURAS CONFLICT OF 1969

In the article investigated the causes and course of the conflict between El Salvador and Honduras in 1969, as well as the consequences of the conflict on integration processes in the region. It was noted that the cause of the Salvador-Honduran conflict was in the problems of land reform in Honduras and demographic problems in Salvador; also, in territorial disputes that lasted between the two countries; as well as the uneven development of Salvador and Honduras. In addition, the press of both countries contributed to the aggravation of the crisis, and violence against Salvadorans in Honduras and against Hondurans in Salvador during football matches. In 1969, relations between the two countries deteriorated due to the forced deportation of Salvadorans from Honduras, whom the Honduran government had agreed two years earlier to accept in their country and provide them with land to cultivate. The problem of the deportation of Salvadorans, which was difficult to integrate into Salvador’s economic life due to limited land resources and Salvador’s population overpopulation, posed a number of challenges for the Salvador government. Consequently, the deportations of Salvadorans from Honduras, territorial disputes between the two countries, and Honduras’ economic backwardness from Salvador provoked conflict. The article states that the conflict between Salvador and Honduras resulted according to various sources from 2 to 6 thousand killed civilian and military casualties on both sides; significant number of Salvadorans (according to various sources, from 60 to 130 thousand refugee) who were forcibly deported from Honduras or fled for fear of their future; Honduras and Salvador have suffered significant industrial and social damage as a result of the bombing. However, Honduras suffered more losses, as most of the hostilities took place in Honduran lands; the social situation in Salvador has deteriorated, and the government has been unable to address the economic and social needs of Salvadorans deported from Honduras; Honduras has officially closed its border with El Salvador, thus hindering the circulation of Salvador’ products in Honduras. Thus, the Central American Common Market terminated its regional economic cooperation project; under the rule of both Salvador and Honduras, the political participation of the military was strengthened.

ÍNDICE DE INTEGRACIÓN INSTITUCIONAL DEL MERCADO COMÚN CENTROAMERICANO (MCCA-RD)

El objetivo de este artículo fue evaluar la hipótesis de que la integración institucional interacciona con la integración económica regional a través de la elaboración del Índice de Integración Institucional para el caso del Mercado Común Centroamericano (MCCA) e sus resultados fueron comparados para los casos de la Unión Europea (EU) y el MERCOSUR estimados por Dorrucci. Posteriormente, fue aplicado un modelo de Vectores Autoregresivos (VAR) para ese índice incorporando variables como el ingreso per-cápita, términos de comercio y apertura comercial. Los resultados sugieren que una mayor integración institucional trae un nivel más alto de nivel de integración económica y vice-versa.

The effects of integration agreements in Western Hemisphere trade, 1970–2014

The paper analyzes the effects of four regional integration agreements (Common Market of the South [MERCOSUR], Andean Community [ANCOM], Central American Common Market [CACM] and North America Free Trade Agreement [NAFTA]) on bilateral trade in 19 countries from the Western Hemisphere for the period 1970–2014. For this purpose we estimate different gravity models to control for trade creation and diversion, export diversification and intra-industry trade using OLS log-linearized gravity model and Poisson pseudo-maximum-likelihood panel data estimators that allow controlling for zero-value trade flows. We find trade creation for ANCOM, MERCOSUR and CACM and trade diversion for NAFTA and MERCOSUR countries. Export diversification negatively affects bilateral trade in all American agreements, while intra-industry trade has contributed to trade expansion in ANCOM and the opposite for NAFTA, MERCOSUR and CACM. Global supply chains may help us explain these results. Finally, we find anticipatory effects on trade several years before the signing of the agreements, but only NAFTA countries seem to be natural trading partners in the region while the rest of Latin American regional agreements have not resulted in a comprehensive, profound and consolidated common market.

The European Union and the Central American Common Market Signs an Association Agreement: Pragmatism versus Values?

This article discusses the association agreement between the European Union and Central America signed in 2010.The importance of this agreement is crucial in international relations since it is the first successful association agreement between two regional groups that include trade, political dialogue and development aid. The central argument of this article sustains that the agreement was possible thanks to the efforts of the Spanish diplomatic team. However, this was not sufficient and the efforts of Central American countries were absolutely essential. The main events that influenced the agreement are analysed in order to find the reasons behind the agreement: the Spanish presidency; the bananas conflict between the EU, the US and Central American countries; and the political conflict in Honduras.

An analysis of Central America and Eastern Europe Revealed Comparative Advantages

The present study applies the revealed comparative advantages through the Balassa Index to determine the comparative advantages, disadvantages, and intra-product commerce tendencies between Central America and Eastern Europe with the purpose of determining the possibility of a free trade agreement for Central America. The approach of the study is through the connection between the European Economic Union and the Central American Common market, which shares a common background and relates them to research of Bela Balassa (1965) to determine how commerce between Central America and Eastern Europe has performed and the possibilities of growth that this commerce has through a free trade agreement. The study demonstrates the importance of analyzing competitive advantages. This paper presents the difference in competitive advantage between Eastern Europe and Central American establishing the benefits when negotiating a free trade agreement between both economic blocks. Therefore, analyzing and negotiating between products of competitive advantages may lead to a more sustainable economic growth.

ECOWAS Monetary Union Agenda and Regional Integration Policies: Applicable Theories, Supervision and Challenges

The idea of Regional integration can be traceable to the evolvement of the international trade relations in the post-war period, linked regionalism, while regionalism itself can be understood through two different historical perspectives. The first occurred in 1951 and1957 with European Coal and Steel Community (1951) and the second with European Economic Community. This two served as forerunners of the European Union. Thus, in the developing world, especially in Latin America and Africa, there was adoption of import-substituting regional integration as the means to effect inward-looking growth. Most of the developing country schemes initiated at this time eventually became moribund or even collapsed, while the growing momentum of multilateral liberalization in the 1970s and 1980s contributed to the decline in the importance attached to regionalism, while the second is traceable to the second half of the 1980s. Thus, under the impetus of the European cooperation, the 1960s wave of regionalism reached Africa with the founding of the Central African Customs Union in 1964, Latin America via the Central American Common Market in 1960 and the Andean Pact in 1969. In Asia, ASEAN was launched in 1967. However, the idea of regional integration in West Africa (even though accompanied with some form of politics) is aimed at bringing economic unity in trade, commerce and development. It is also aimed at limiting or even eliminating all trade barriers in the region and promoting socio-economic development of member states. ECOWAS as a sub-regional organisation was launched through the Treaty of Lagos in 1975, with the primary goals of promoting regional trade, economic cooperation and self-reliance in the sub-region. To accelerate integration, a revised ECOWAS Treaty was signed in 1993. Its aspirations are basically channelled towards a common market and a single currency among member states. This essay tend look at ECOWAS regional integration and single currency agenda and assess its successes, and supervision, challenges and applicable theories for continued achievement.

Economic Integration In The Americas: 1975-1992

<span>Latin American countries renewed their interest in regional trading blocs during the 1980s. According to Salgado, this renewed interest took the form of two phases: 1984-87, and from 1986 on. This paper uses a gravity equation to examine Latin American and Caribbean trade flows to ascertain the effectiveness of the Central American Common Market, Andean Pack and Latin American Integration Association, and to identify the factors affecting Latin American integration. Geographic distances are adjusted for the level of infrastructure development in an attempt to better proxy economic distance. A Chow Test is used to test for Salgados two phases.</span>

'A major lobbying effort to change and unify the excise structure in six Central American countries': How British American Tobacco influenced tax and tariff rates in the Central American Common Market

BackgroundTransnational tobacco companies (TTCs) may respond to processes of regional trade integration both by acting politically to influence policy and by reorganising their own operations. The Central American Common Market (CACM) was reinvigorated in the 1990s, reflecting processes of regional trade liberalisation in Latin America and globally. This study aimed to ascertain how British American Tobacco (BAT), which dominated the markets of the CACM, sought to influence policy towards it by member country governments and how the CACM process impacted upon BAT's operations.MethodsThe study analysed internal tobacco industry documents released as a result of litigation in the US and available from the online Legacy Tobacco Documents Library at http://legacy.library.ucsf.edu/. Documents were retrieved by searching the BAT collection using key terms in an iterative process. Analysis was based on an interpretive approach involving a process of attempting to understand the meanings of individual documents and relating these to other documents in the set, identifying the central themes of documents and clusters of documents, contextualising the documentary data, and choosing representative material in order to present findings.ResultsUtilising its multinational character, BAT was able to act in a coordinated way across the member countries of the CACM to influence tariffs and taxes to its advantage. Documents demonstrate a high degree of access to governments and officials. The company conducted a coordinated, and largely successful, attempt to keep external tariff rates for cigarettes high and to reduce external tariffs for key inputs, whilst also influencing the harmonisation of excise taxes between countries. Protected by these high external tariffs, it reorganised its own operations to take advantage of regional economies of scale. In direct contradiction to arguments presented to CACM governments that affording the tobacco industry protection via high cigarette tariffs would safeguard employment, the company's regional reorganisation involved the loss of hundreds of jobs.ConclusionsRegional integration organisations and their member states should be aware of the capacity of TTCs to act in a coordinated transnational manner to influence policy in their own interests, and coordinate their own public health and tax policies in a similarly effective way.

A integração latino-americana no século XIX: antecedentes históricos do Mercosul

Today, when one thinks about integration in Latin-America, immediately associated with the image of existing regional international organizations: Mercosur, Andean Pact, Central American Common Market. What happens is that the history of Latin-American integration is prior to those international organizations and born together with the ideal ofindependence the Latin-Americans countries, in 19th century. As seen in research, the ideas integrationists started with the search for political union between the countries of Latin-Americans and, only later, adopted economic prospects that currently defined.

Estimating the effects of free trade agreements on international trade flows using matching econometrics

This paper provides the first cross-section estimates of long-run treatment effects of free trade agreements on members' bilateral international trade flows using (nonparametric) matching econometrics. Our nonparametric cross-section estimates of ex post long-run treatment effects are much more stable across years and have more economically plausible values than corresponding OLS cross-section estimates from typical gravity equations. We provide plausible estimates of the long-run effects of membership in the original European Economic Community (EEC) and the Central American Common Market (CACM) between 1960 and 2000 and the estimates confirm anecdotal reports of these agreements' effectiveness.

Integración regional andina en salud

Despite their shared history, the Andean countries are socially and politically diverse, with heterogeneous health realities and complex integration processes. General developments such as the Latin American Free Trade Association and Latin American Integration Association have existed for decades, along with others of a regional scope, like the Andean Community of Nations, Caribbean Community, and Central American Common Market. The health field has a specific instrument in the Andean Region called the Hipólito Unánue Agreement, created in 1971. Integration processes have concentrated on economic aspects, based on preferential customs agreements that have led to an important long-term increase in trade. Less progress has been made in the field of health in terms of sharing national experiences, knowledge, and capabilities. Analysis of experiences in health has shown that integration depends on the countries' respective strengths and to a major extent on national political processes.

New Evidence on Long-Run Output Convergence Among Latin American Countries

This study assesses long-run real per capita output convergence among selected Latin American countries. The empirical investigation, however, is based on an alternative approach. Strong convergence is determined on the basis of the first largest principal component, based on income differences with respect to a chosen base country, being stationary. The qualitative outcome of the test is invariant to the choice of base country and, compared to alternative multivariate tests for long-run convergence, this methodology places less demands on limited data sets. Using annual data for the period 1960–2000, strong convergence is confirmed for the Central American Common Market. However, an amended version of the test confirms weaker long-run convergence in the case of the Latin American Integration Association countries.

A SENSITIVITY ANALYSIS OF THE GRAVITY MODEL

In this article, we examine the robustness of variables used in the gravity model literature. We use a variant of Leamer's extreme-bounds analysis, which tracks the sign and significance level of the variable of interest to changes in the conditioning set of variables. Of the 47 variables investigated, we find 20 measuring level of development, trade policy, linguistic and colonial ties, geographic factors, relative population density, common currency, and membership in the Central American Common Market (CACM), Caribbean Community (Caricom), Mercado Común del Sur (Mercosur), Australia-New Zealand Closer Economic Relations Trade Agreement (ANZCERTA), and Asian Pacific Economic Cooperation (APEC) are robustly linked to trade. As a result, this study provides researchers with a suitable starting point in which to examine new potential determinants of international trade.

Performance of Western Hemisphere Trading Blocs: A Cost-Corrected Gravity Approach

We study the performance of the four Western Hemisphere trading blocs during the period 1978-2001. For the North American Free Trade Agreement (NAFTA), trade integration outweighed trade diversion; for MERCOSUR, increased integration and trade diversion went hand in hand; for the Central American Common Market (CACM) and the Andean Community, the evidence points to trade diversion only. We also find that trade among neighboring countries has increased since the early 1990s. The estimations are based on a nonlinear gravity equation that incorporates the hypothesis that exports create externalities that affect trade costs. This hypothesis might help reconcile the theoretical unitary income elasticity with most empirical findings of a non-unitary income elasticity in studies using the gravity equation.

Performance of Western Hemisphere Trading Blocs: A Cost-Corrected Gravity Approach

We study the performance of the four Western Hemisphere trading blocs during the period 1978-2001. For the North American Free Trade Agreement (NAFTA), trade integration outweighed trade diversion; for MERCOSUR, increased integration and trade diversion went hand in hand; for the Central American Common Market (CACM) and the Andean Community, the evidence points to trade diversion only. We also find that trade among neighboring countries has increased since the early 1990s. The estimations are based on a nonlinear gravity equation that incorporates the hypothesis that exports create externalities that affect trade costs. This hypothesis might help reconcile the theoretical unitary income elasticity with most empirical findings of a non-unitary income elasticity in studies using the gravity equation.

Regional integration and domestic institutional homogeneity: a comparative analysis of regional integration in the Americas, Pacific Asia and Western Europe

This work argues that the formation of an economic union requires that the homogeneity of domestic economic institutions and the process of regional integration reinforce each other. Granger causality tests on four cases of regional integration in the Americas, Asia and Europe (1975 through 1995) confirm our thesis. These cases include the Andean Pact, the Association of Southeast Asian Nations, the Central American Common Market and the European Union. The most successful case of integration - the European Union - does evince a pattern of positive interaction between the two variables, while less successful cases, found in Latin America, are lacking in this mechanism of mutual influence. We further discuss several regional groups that have recently emerged and use our theoretical implications to assess their future development.

A Integração Centro-Americana: Da União Política à Integração Econômica

The present study deals with the analysis of the economic block denominated Central American Common Market. Contracting States, after decades of crisis and rupture of the block, decided to relaunch the integrational project upon the writing of two important juridical instruments: the Protocol of Tegucigalpa and the Protocol of Guatemala. The first constitutes a new juridical and institutional mark of integration, the second updates and relaunches the regi­onal integration.

Evaluating impact of spatial scales on land use pattern analysis in Central America

The complexity of the relations between land use patterns and their spatial determinants causes the scale of analysis to influence the results. Often, focus is on one aspect of this scale effect, the spatial resolution. This study emphasises the influence of a varying spatial extent on the analysis of land use patterns in six countries in Central America. Statistical techniques are used to determine the relationship between six land uses and a number of potential determining factors, varying both resolution and extent. Results indicate that the effect of spatial resolution, by aggregating a basic grid to larger units, is small in comparison with other similar studies. The effect of a varying extent, by keeping either national boundaries or analysing the entire region at once, on the other hand, is substantial. An unrealistic redistribution of all major land use types, including a large-scale reforestation, is predicted using statistical analysis with the entire region as extent. When expanding the extent to a unit larger than a country, implicit assumptions concerning market mechanisms and national policies are adopted that do not correspond to the actual situation. Despite the existence of the Central American Common Market, it cannot be assumed that any agricultural land use will expand to satisfy an increasing demand in another country. Findings strongly suggest that any modelling effort at regional or global level should incorporate a thorough analysis of the effects of spatial scale on land use change predictions.

Cecsa

The CECSA case describes the efforts of a Central American manufacturer of sanitary fixtures such as toilets and washbasins to improve quality and service through the application of just-in-time and total quality control (JIT/TQC) concepts. The company had been founded as part of a national policy of import substitution during the early years of the Central American common market, and its products, protected by high tariff barriers, dominated the regional market. However, its sales were affected seriously by the economic and political crises of the 1980s, forcing the company to search for markets outside the region. The case is set in 1987, at the height of the global conflicts that were being played out in Central America and at a time when opportunities for CECSA were opening in new export markets. With encouragement from its partner, an international ceramics corporation, CECSA embarked upon a plan to export to the United States. To meet the demanding quality specifications of the U.S. market, the company introduced the JIT/TQC approach. The implementation of this approach, with its emphasis on quality rather than quantity, required changes in the company culture and in traditional working habits that were difficult to make. The case demonstrates how continuous attention to quality throughout the entire value chain, including requirements made of suppliers, can pay off. CECSA was successful in entering the U.S. market. As new export projects materialized and pressure to meet deadlines mounted, however, many aspects that had been put in place to support the change process, such as the quality Involvement Groups, were abandoned. Other required changes, such as a new incentive system, were not introduced in a timely manner. As a consequence, momentum was lost. As the case closes, the general manager, Antonio Mendez, must decide how to regain the momentum. In a meeting with his key managers, a five-point implementation plan is produced, and the question that remains is whether this plan will be sufficient. The CECSA case illustrates how, in implementing the JIT/TQC approach, there is a continual danger of relapsing into old habits that paralyze the change effort. The loss of momentum, leading to work slowdowns, cannot be attributed to a single factor but to many. An important lesson is the importance of paying continuous attention to detail, to preserve the enthusiasm of personnel and managers alike.