European Union and Central America take a Major Step Towards a Stronger Partnership

By Mayora IP

The European Union-Central America Association Agreement entered into force on May 2024, paving the way for the EU and the six countries of Central America (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama) to take their economic and political relationship to the next level. 

The Delegation of the European Union to Guatemala higlighted that the agreement establishes a transparent and predictable environment, providing legal certainty for EU operators and investors in the region.

"The trade pillar of the agreement includes a dedicated chapter addressing the interrelation between trade and social and environmental policies. This has helped the EU and Central America to cooperate, promote and enforce labour rights and environmental standards. As part of this Trade and Sustainable Development title, the agreement includes stringent provisions to ensure that labour rights are upheld, and that environmental protection is prioritized. By holding trading partners to international standards, the agreement helps promote sustainable and responsible trade practices," the Delegation stated.

According to the European External Action Service (EEAS) -the diplomatic service of the European Union- the EU and Central America have identified joint priorities on trade and sustainable development, which are underpinned by numerous EU-funded cooperation projects on matters such as Decent Work, Responsible Business Conduct, and deforestation-free supply chains. The entry into force of the political and cooperation pillars will complement related actions.

"Moreover, the agreement set up a consultation system at various levels to facilitate open discussions on specific trade issues covered in the different sections of the trade pillar. The scope of the consultation system will expand following the agreement’s entry into force, as the political and cooperation chapters come into effect, allowing for structured dialogue in those áreas", the EEAS concluded.