Central American Economic Integration - The Impact of a Customs Union with Guatemala on El Salvador’s Economy

Roberto Miranda

No 1208, Competence Centre on Money, Trade, Finance and Development from Hochschule fuer Technik und Wirtschaft, Berlin

Abstract: This study analyzes the expected impact of the implementation of a Customs Union between Guatemala and El Salvador on the latter’s economy. In order to do so, the main implications of moving from a Free Trade Area to a Customs Union are examined: CET establishment (with special attention paid to those sectors that would be negatively affected by a tariff reduction), RoO elimination and the abolition of customs controls. The analysis anticipates that efficiency gains from a number of factors (including reduction of goods’ prices, RoO administrative and compliance expenses and custom-related transaction costs) surpass the negative impact on domestic producers that are affected by a tariff cutback.

Keywords: working paper; daadpartnership; finance-and-trade (search for similar items in EconPapers)
Pages: 55 pages
Date: 2012-07
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Published in Berlin Working Papers on Money, Finance, Trade and Development, July 2012

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Persistent link: https://EconPapers.repec.org/RePEc:mtf:wpaper:1208

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