Trade and Logistics in Central America

Central America's trade has
increased significantly in the past decade, in great part as
a result of strong efforts to reduce tariffs within the
region, as well as improvements in market access due to the
entry into force of important free trade agreements.
However, the growth of Central America's trade has not
been as impressive from a global perspective and there is
growing evidence that the gains from trade agreements and
liberalization policies have been limited by transport and
logistics barriers. Studies sponsored by the World Bank
reveal that high domestic transportation costs, along with
bottlenecks at land border crossings, continue to present
large hurdles to intra and extra regional trade. Key factors
that impede commerce include the lack of good-quality paved
secondary roads, expensive trucking services, and lengthy
border crossing procedures. Coordinated efforts to address
these bottlenecks could help improve significantly the
growth impacts of international trade in the region.