The trade barriers between the European Union and Guatemala, have been lifted with effect from December 1, 2013, which effectively means that the whole region of Central America can now benefit from the EU–Central America Association Agreement, signed in June 2012.

The Association Agreement relies on three complementary and equally important pillars, namely political dialogue, cooperation, and trade—which reinforce each other and their effects.

The trade pillar of the Association Agreement has been provisionally applied since August 1, 2013 with Honduras, Nicaragua and Panama, since October 1, 2013 with Costa Rica and El Salvador, and now with Guatemala since December 1.

The most important provision of trade pillar part of the Agreement is elimination of most important tariffs, and EU exporters are expected to save €87 million annually in lower customs duties.

The ambitious trade partnership has opened up new markets and simplified rules, which is expected to boost trade and investments, including in the textiels and clothing sector, between the European Union and the Central American region.

“This trade agreement will bring our regions closer together by giving our companies privileged access to each other’s markets”, said EU Trade Commissioner Karel De Gucht, in a press release.

As a result of the agreement, the Central American economy is expected to grow by over €2.5 billion per year.

The agreement also aims at fostering regional economic integration among the six Central American countries.

Historically, the bulk of most Central America countries trade is with the US and Latin America, and it is only recently that the region has actively sought to increase its trade with Europe and Asia.

Between 2008 and 2012, the trade flow in goods between the EU and Central America has increased at an average of 15 percent per year to €14.9 billion.