Central American Common Market

Central American Common Market

Central American Common Market (CACM), trade organization envisioned by a 1960 treaty between Guatemala, Honduras, Nicaragua, and El Salvador. The treaty established (1961) a secretariat for Central American economic integration, which Costa Rica joined in 1963; Panama now has observer status in some areas. By 1970 trade between member nations had risen more than tenfold over 1960 levels, and imports doubled and a common tariff was established for 98% of the trade with nonmember countries. However, the 1969 war between El Salvador and Honduras led to the latter's effective withdrawal, and the political turmoil in Central America during the 1970s and 80s left the organization moribund. The 1990s saw a revival of the organization, but its ultimate place with respect to the Central American Free Trade Agreement (signed 2004, and including the Dominican Republic and the United States) and the proposed (2001) Free Trade Area of the Americas is unclear.

The Central American Common Market (CACM; Spanish: Mercado Común Centroamericano, MCCA) was an economic trade organisation between five nations of Central America spanning 100 million acres. It was established on December 13, 1960 between the nations of Guatemala, El Salvador, Honduras and Nicaragua in a conference in Managua. These nations ratified the treaties of membership the following year. Costa Rica joined the CACM in 1963. Panama is conspicuous by absence.

The organisation collapsed in 1969 with the Football War between Honduras and El Salvador, but was then reinstated in 1991.

The current Central America trade block is organized by the General Treaty for Economical Integration signed October 29 1993 (Guatemala Protocol) which is part of the Central American Integration System SICA.

The CACM has succeeded in removing duties on most products moving among the member countries, and has largely unified external tariffs and increased trade within the member nations. However, it has not achieved the further goals of greater economic and political unification that were hoped for at the organisation's founding, mainly caused by the CACM's inability and lack of reliable means to settle trade disputes.

Comparison with other regional blocs

See also

References

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