46 :: IMPLEMENTING AID FOR FAIR TRADE IN LAC
activities; strengthening the competitive advantage of traditional export sectors; consolidating Honduras’ international trade policy; and improving the business climate. Honduras’ international insertion strategy should promote investments in niches not yet fully exploited and that benefit from market access opportunities, consolidate the maquila regime and design a new set of incentives to increase value-added over time and backward linkages through the integration of local suppliers, establish a plan for developing outsourcing services, strengthen trade-related infrastructure and develop a trade facilitation plan, establish training programs designed to direct human resources to priority activities, and strengthen the participation of small- and mediumsize businesses engaged in exporting. Honduras needs to take measures to deal with the global economic downturn, particularly to protect jobs and promote new investments based on the country’s strategic location, existing supply chains, and highly efficient and flexible workforce. The United States – Central American – Dominican Republic Free Trade Agreement (DR-CAFTA) could further strengthen the country’s role in attracting investment if options for the computation of origin were broadened and specific rules of origin revised to take account the current reality of the productive sectors in countries party to the agreement. However, there is concern about the lack of financing mechanisms for innovative projects, particularly in the present crisis, as well as the impact of current exchange rate policies on the competitiveness of Honduras’ exports. 2/ Production networks and supply chains now play a very important role in world trade, as exemplified by Honduras’ textile and apparel industry. Value chains can act as an instrument for designing Aid for Trade, in this case with a particular application to the maquila sector. Through an examination of the different stages of this supply and value chain and an exploration of the links between producers and suppliers, Honduras’ main challenges are to improve the business climate, strengthen the country’s institutions, and continue to build human capacity. An analysis of the value chain in the meat sector urged further action in a number of areas, including taking a microeconomic approach that identifies organizational strengthening and horizontal integration between relevant actors, quality improvement, incorporation of technology, development of infrastructure, improvement in access to markets, and information.