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Private sector Participation in Trade policy Formulation and Application

Article 1: Customs Union: Private Sector’s Perspective For Central America’s private sector, the Customs Union is one of the priority issues to be addressed in the Central America’s Integration Agenda. Progress in this field - as opposed to the development of the PPP - has been more evident and the completion of this process is vital for entrepreneurs. Even though this initiative has taken more than 40 years, the widespread perception is that an important part of the “road” has already been traveled. Most entrepreneurs in this region agree on the fact that this is a complex process that cannot be finished overnight if we want to achieve satisfactory results. Therefore, they deem it convenient to put a stop to the tendency to “reinvent” new agendas or goals every six months, which eventually will not be met. In the same line of thought, they think that presidents should set realistic goals that do not impinge on the credibility of the process. It is worth mentioning that the communication between the public and private sectors has been weak. Thus, as regards certain fundamental issues there is a high degree of lack of knowledge about the rate of progress or the existing proposals. This is the case of the initiatives related to customs integration and tax collection systems. Likewise, the marginal participation of entrepreneurs and of civil society from the starting phase of the process has made it more complex to reach consensus. However, most business chambers and manufacturers associations—aware of the importance of carrying out the Customs Union—have looked for ad–hoc spaces in order to have their recommendations implemented by the governments in the region. To conclude, at present, the Customs Union is one of the regional initiatives over which there is total consensus. Despite its rate of progress, it is considered as an excellent attempt to bring together the efforts of the five countries in the region to face trade challenges, to position Central America in the international market and to maximize available resources. Source: CLACDS/INCAE. 2006 “Posición de Centroamérica frente a futuras iniciativas de integración regional” (The Position of Central America regarding Future Regional Integration Initiatives) Mimeo.

Union (UAC). The progress in the modernization of the customs system, the strengthening of agro-sanitary structures and the compliance with quality standards are only some of the areas over which there are still significant divergences among Central American countries. Also, some region leaders admit that even though the CAFTA-DR has raised the profile and importance of regional projects, it has also diverted the attention away from other initiatives, such as the PPP itself. CAFTA–DR has shown that fostering the participation of the private sector and the civil society in consultation fora and in accompanying negotiations is good business for everybody. The importance of this participation was evidenced in the negotiation of internal policies to ratify the agreement in the signatory countries. Without the support of the private sector and civil society, which were informed and part of the negotiation, the process of ratification would have been more difficult. The Costa Rican private sector participation in the “Alianza Ciudadana por el Sí” (Citizens’ Alliance for Yes on CAFTA) shows how the private sector is involved in the ratification of the agreement by referendum in Costa Rica.


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