U.S. Exports Look South To Central America

The U.S. government’s Look South initiative encourages U.S. companies to explore trade opportunities with its free trade agreement (FTA) partners in Central America. These include El Salvador, Guatemala, Honduras, Nicaragua and Costa Rica. One FTA benefit is that U.S. consumer and industrial goods exported to the CFTA-DR (Central America-Dominican Republic Free Trade Agreement) trade region are fully exempt from tariffs. The CAFTA-DR trade region is the third largest U.S. export market in the Western Hemisphere. just behind Mexico and Brazil.

Costa Rica

The U.S is Costa Rica’s main trading partner, with $7.2 billion in exported goods in 2013. This accounts for 47 percent of Costa Rica’s total imports. U.S. goods are highly price-competitive in Costa Rica and have a strong positive reputation. The leading sectors for U.S. exports are:

  • Automotive Accessories, Parts and Service Equipment
  • Construction Equipment
  • Cosmetics
  • Solar Energy Products

Guatemala

CAFTA-DR has had a dramatic impact upon U.S. exports to Guatemala. Exports rose more than 95% between 2006, the year the agreement was enacted, and 2013. The U.S. is Guatemala’s largest trading partner and exports more than $5.5 billion in goods there, representing 40% of Guatemala’s trade. The leading U.S. exports to Guatemala include;

  • Automotive Accessories, Parts and Service Equipment
  • Security and Safety Equipment
  • Petroleum Products
  • Forestry and Woodworking Machinery

El Salvador

El Salvador offers an open market for U.S. goods and services. It is also a good platform for re-exports due to its central location. U.S. exports to El Salvador in 2013 were $3.3 billion, making the U.S. its largest trade partner. The leading sectors for U.S. exports are:

  • Automotive Accessories, Parts and Service Equipment
  • Construction Equipment

Honduras

The United States supplies more than 46% of Honduran imports, amounting to $5.4 billion in goods in 2013. Its deep-water port, Puerto Cortés, is the first port in Central America to qualify under both the Megaports and Container Security Initiatives (CSI), enabling it to facilitate the screening of approximately 90% of transatlantic and transpacific cargo prior to importation into the United States. The leading sectors for U.S. exports are:

  • Automotive Accessories, Parts, and Service Equipment
  • Food Processing and Packaging Equipment
  • Safety and Security Equipment

Belize

Belize relies heavily on imports and the U.S. is its principal trading partner.  The United States provided over 44 percent of total Belizean merchandise imports in 2012. The leading sectors for U.S. exports are:

  • Agriculture and Agribusiness
  • Petroleum
  • Information and Communication Technology
  • Renewable Energy and Green Technology

Nicaragua

The United States is the source of 25% of Nicaragua’s imports. The U.S. is also the destination for approximately two-thirds of Nicaragua’s exports (including free zone exports). The leading sectors for U.S. exports and investment are:

  • Renewable Energy Technology
  • Food Processing and Packaging Equipment
  • Hotel and Restaurant Equipment
  • Medical and Dental Equipment
  • Building Products and Construction Equipment
  • Plastics

Learn more about doing business in Central America

This 2010 webinar features Commercial Officers from the U.S. Department of Commerce who provide an overview of CAFTA and trade opportunities in prospects in Central American markets. Although dated, it is an informative introduction to exporting to Central America.