U.S. Launches Regional Trade and Investment Project

By Bufete Mejia & Asociados

The United States Government, through the United States Agency for International Development (USAID), launched its new “Regional Trade and Investment Project,” a USD 26 million initiative designed to foster export-led economic growth and economic integration between Honduras, El Salvador and Guatemala.

This new project will boost economic growth, regional integration and job creation in Central America. By attracting foreign investment and encouraging local investment, it looks to increase the region’s productive capacity, especially under the nearshoring trend, which connects Central America with key markets such as the United States.

This approach, accompanied by trade facilitation and the strengthening of intra-regional value chains, will allow for greater competitiveness, sustainable growth and the generation of new job opportunities.

The four main pillars of the project include: deepening the customs union and regional integration; strengthening the digitalization of trade processes, improving trade policies and modernizing regulations; increasing the competitiveness of the private export sector; and improving access to financing and investment in the region.

USAID’s technical assistance includes activities to improve border management and coordination, streamline processes, and build the capacity of government agencies that regulate trade. The project also funds small-scale infrastructure projects to reduce congestion and bottlenecks at major border crossings.

Over five years, expected milestones include the training of more than 600 customs officials, a 30% increase in exports by participating companies, and the mobilization of USD 100 million in investments, USd 30 million of which will be earmarked for clean energy projects. The intervention of the new project and its partners will help reduce trade costs and time, boosting economic growth and job creation throughout the region.

The USAID project is working with the Secretariat for Central American Economic Integration (SIECA) and the ministries of Economy and Customs authorities of the three countries.