Central American Common Market (CACM)

Marché commun centroaméricain
Mercado Común Centroamericano (MERCOMUN)

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Contact Details

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History

1991, replacing a common market of the same name which collapsed in 1969, having been set up 13 Dec 1960, Managua (Nicaragua), under the auspices of Organization of Central American States (ODECA), through the signature of General Treaty on Central American Economic Integration, 1960, administered by Permanent Secretariat of the General Treaty on Central American Economic Integration (SIECA), which came into force in June 1961. Costa Rica joined in July 1962 and the Treaty was ratified by all the five member countries by Sep 1963. Also referred to as Central American Economic Integration and by Spanish initials MCCA. Treaty was due to expire June 1981, but contracting parties agreed, July 1980, that it should continue in operation until agreement was reached on a new integration scheme, possibly a Central American Economic and Social Community (CESCA). The Central American Integration System (SICA) was established 13 Dec 1991, by Protocol of Tegucigalpa, replacing OCAS. MERCOMUN does not yet actually exist. The following paragraphs relate in some cases to the previous Common Market.

Aims

Establish a common market which contributes towards acceleration of economic growth of member countries and facilitates diversification of their production bases towards manufactures; overcome the problems of of small domestic markets; facilitate the process of industrialization.

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Activities

The first stage of integration was to involve formation of a free trade area, firstly through elimination of trade restrictions on subregional trade in industrial products and secondly through progressive removal of trade restrictions on the remaining (non-industrial) products. The second stage was to be elevation of the free trade area into a customs union, when members adopted a common external tariff. The third and final stage was to be formation of a common market. Despite problems in intra-regional trade, progress has been made in external trade and economic cooperation. 'Central American Tariff System' approved 1986, implemented 1993 as 'New Central American Tariff System'. Under the System, the 'Common External Tariff (CET)' allows for tariff policy based on common criteria and economic principles and is managed by Council; new tariffs replace all fiscal incentives granted earlier in favour of investments. Other initiatives are: the creation of the Central American Parliament (PARLACEN); the approval, 1988, of a 'Plan of Immediate Action' to re-establish a common market in Central America; the signing of cooperation and trade agreements between CACM countries and those of ALADI; the signing of cooperation agreements among CACM countries themselves; establishment, 1986, of Fund for the Economic and Social Development of Central America (FONDESCA), by CABEI, to attract contributions from third countries; signing of economic agreements between CACM and the European Economic Community, Apr 1990, Dublin (Ireland), aimed at removing the main financial constraints on intra-CACM trade; 'Declaration of Guatemala', Oct 1993, agreeing to strengthen efforts towards improving free trade and the CET, achieve customs union, enhance free mobility of capital and human resources and seek gradual monetary and financial integration. Institutions include:

 • Central American Commission of Maritime Transport (COCATRAM); Central American Corporation for Air Navigation Services (COCESNA); INCAE Business School; Central American University Confederation (CSUCA); Federation of Industrial Chambers and Associations in Central America (FECAICA); Institute of Nutrition of Central America and Panama (INCAP); Central American Telecommunications Commission (COMTELCA).

Structure

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Relations with Inter-Governmental Organizations

Relations with 9 inter-governmental organizations.
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Relations with Non-Governmental Organizations

Relations with 2 non-governmental organizations.
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Publications

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Members

Members in 5 countries
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Type I Classification

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Type II Classification

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Subjects *

  • Government
    • Intergovernmental Communities

UN Sustainable Development Goals **

UIA Org ID

F6292

Last News Received

2008
* Subject classification is derived from the organization names and aims.
** UN SDGs are linked to the subject classification.

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