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

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  • Roberto Miranda

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.

Suggested Citation

  • Roberto Miranda, 2012. "Central American Economic Integration - The Impact of a Customs Union with Guatemala on El Salvador’s Economy," Competence Centre on Money, Trade, Finance and Development 1208, Hochschule fuer Technik und Wirtschaft, Berlin.
    • Handle: RePEc:mtf:wpaper:1208
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    References listed on IDEAS

    as
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