RESTRICTED  
  
WT/TPR/G/336  
24 March 2016  
(16-1710)  Page: 1/14  
Trade Policy Review Body  Original: Spanish  
 
  TRADE POLICY REVIEW 
REPORT BY 
HONDURAS  
Pursuant to the Agreement Establishing the Trade Policy Review Mechanism (Annex 3 of the 
Marrakesh Agreement Establishing the World Tr ade Organization), the policy statement by 
Honduras is attached. 
 
Note: This report is subject to restricted circulation and press embargo until the end of the 
first session of the meeting of the Trade Policy Review Body on Honduras. WT/TPR/G/336 • Honduras 
- 2 - 
  Table of Contents 
1  INTRODUC TION ........................................................................................................... 3  
2  ECONOMIC AND TRADE POLICY ENVIRONMENT ........................................................... 4  
2.1  Macroeconomic policies a pplied between 2010 and 2015 .................................................. 4  
2.1.1  Honduran econom ic developments ............................................................................. 4  
2.1.2  Monetary and credit policies ...................................................................................... 5  
2.1.3  Exchange-r ate policy ................................................................................................ 6  
2.1.4  Fisca l policy .......................................................................................................... .. 6 
3  COUNTRY VISION AN D NATIONAL PLAN ...................................................................... 7  
3.1.1  Institutional Framework of External Trade Policy .......................................................... 8  
3.1.2  Main policy features ................................................................................................. 8  
3.1.3  Attracting  investment ............................................................................................... 8  
4  TRADE POLICY DEVE LOPMENTS 2010- 2015 ................................................................. 9  
4.1  Multilateral Trading System .......................................................................................... 9  
4.1.1  Agriculture .............................................................................................................. 9  
4.1.2  Trade facilitation ...................................................................................................... 9  
4.1.3  WT O rules ..............................................................................................................  9 
4.1.4  Dispute Settlem ent Understa nding ............................................................................. 9  
4.1.5  Factual presentations of th e Free Trade Agreem ents in force ......................................... 10 
4.2  Central Americ an Integr ation ...................................................................................... 10 
4.2.1  Incorporation of Panama into the Central American Economic Integration 
Subsystem ...................................................................................................................... 11 
4.2.2  Impact of in traregiona l trade .................................................................................... 11 
4.2.3  Process of deep integration towards free movement of persons and goods between 
the Republics of Guat emala and Ho nduras ........................................................................... 12 
4.2.4  Central American Strategy for Trade Facilitation and Competitiveness ............................ 12 
4.3  Regional trade agreements (RTA) ................................................................................ 12 
4.3.1  Trade agreements  currently in force .......................................................................... 12 
4.3.2  Trade Agreements currently being negotiated and futu re negotiations ............................ 13 
5  FUTURE POLICY  DIRECTIONS .................................................................................... 14  
 
TABLES 
 
Table 4.1 Regional Trade Agreements ................................................................................. 13 
 WT/TPR/G/336 • Honduras 
- 3 - 
  1  INTRODUCTION 
1.1.  Since its last Trade Policy Review (TPR) in 2010, Honduras has adopted and implemented a 
raft of measures as part of its national policies in the economic, political and social fields. It is continuing to beef up its strategy to consolidate the country's integration into international trade, 
and to that end is taking a two-pronged approach: (i) active participation in multilateral, regional 
and bilateral negotiations; and (ii) policies to attract investment in strategic sectors and to promote and facilitate trade. Between 2010 and 201 5 Honduras made significant progress in terms 
of its institutional and legal framework, adopting a set of trade-related regulations in order to 
pursue the trade policy set out by the Honduran Government in the Country Vision and National Plan. 
1.2.  During the period under review, Honduras adopted the Law for the Optimization of Public 
Administration, Improvement of Citizen Services and Strengthening of Government Transparency, 
renaming the State Secretariat for Industry and Trade as the State Secretariat for Economic Development/PROHONDURAS. 
1.3.  Honduras continues to develop into a modern, transparent, responsible, efficient and 
competitive State, as noted by the World Economic Forum in its 2016 report where Honduras ranked 88
th, up 12 places on the previous position; the areas that reflect the progress it has made 
include the quality of its infrastructure, falls in crime and violence, improvements to the road 
network, and the positive budgetary balance in the State finances. 
1.4.  Among the various trade processes in which Honduras is participating, progress has been 
made in Central American Economic Integration, the process of deep integration towards the free 
movement of goods and persons with Guatemal a, regional trade agreements (free trade 
agreements, economic partnership agreements, economic complementarity agreements and partial preference agreements); the trade facili tation and competitiveness strategy, and the 
multilateral negotiations at the WTO. 
1.5.  In the multilateral context, Honduras has been an active participant in the World Trade 
Organization (WTO) fora. Honduras attaches great importance to the WTO dispute settlement 
system, considering it the multilateral forum for the defence of Members' trade interests. 
1.6.  With a view to achieving Honduras's incorporation into the Asia-Pacific region, work is under 
way to join both the Trans Pacific Partnership Agreement (TPP) and the Pacific Alliance being forged by Mexico, Colombia, Peru and Chile. 
1.7.  The trade policy pursued by Honduras since it joined the General Agreement on Tariffs and 
Trade (GATT) continues to prioritize the country's effective integration into the world economy based on a strategy that combines participation in multilateral trade fora, regional integration and 
strategic alliances with full awareness of new trade-related trends such as the establishment of 
trading mega-blocs, the formation of value chains and trade facilitation. 
1.8.  Against that background, Honduras will continue to coordinate its trade policy with the 
objectives and actions outlined in the Country Vision, National Plan and the "Everyone for a Better 
Life" Plan. We will continue to promote measures to improve the business climate; increase competitiveness and productivity, particularly in strategic sectors; promote macroeconomic stability; promote and attract investment; generate sources of employment; promote economic 
recovery; modernize infrastructure by promoting proj ects to help convert Honduras into a regional 
logistics hub; modernize the State; exploit natural resources in a socially sustainable and environmentally responsible manner; improve transparency, combat corruption and impunity, and 
promote action to improve public safety. The underlying aim will be to ensure better living 
conditions for Honduran society. 
1.9.  Together with the economic and trade policy environment, trade policy between 2010 
and 2015 has been part of efforts to improve tran sparency and fulfil the obligations Honduras has 
assumed within the multilateral trading system. WT/TPR/G/336 • Honduras 
- 4 - 
  2  ECONOMIC AND TRADE POLICY ENVIRONMENT 
2.1.  The overriding feature of the period under re view is the consolidation of macroeconomic 
stability as illustrated by the improvement in macroeconomic variables and the recovery in economic growth. This has helped the country regain trust and credibility at international level. 
Evidence of this can be found in the improved risk profiles published by the principal international 
ratings agencies and the upswing in the country's  global competitiveness indices. It follows 
therefore that Honduras is on the road to economic recovery and to equitable and sustainable 
economic growth commensurate with the country's social needs. 
2.1  Macroeconomic policies applied between 2010 and 2015 
2.1.1  Honduran economic developments 
2.2.  The Honduran Gross Domestic Product (GDP) grew at an annual average rate of 3.5% 
between 2010 and 2014, fuelled chiefly by activity  in the fields of financial intermediation; 
agriculture, livestock, hunting, forestry and fishing; manufacturing and commerce; all of which were driven by domestic demand, especially end consumption, and performance in external trade. 
However, the behaviour of the Honduran economy in  recent years has been influenced in part by 
the effects of climate change and its disruptive effects on production in key economic activities such as coffee-growing, which was damaged by  the outbreak of leaf rust in 2012, and 
shrimp-farming, which was affected by vibriosis in 2014-2015; additionally, agricultural yield from 
crops of sugar cane, melon and watermelon fell,  resulting in lower volumes for processing 
and export. 
2.3.  Despite this, in the third quarter of 2015, the year-on-year variation in GDP was 3.9%, 
leading to an expectation that growth will consolidate on the back of favourable external 
conditions, generating greater confidence and a recovery in sectors such as communications, agriculture and manufacturing supported by improved  terms of trade. It is anticipated that at 
end-2015 growth in the Honduran economy will be 3.5%. 
2.4.  Between 2010 and 2015 year-on-year average inflation at each year-end was 5.1%, lower 
than the rate for the period 2003-2009 (7.4 %). In 2010 and 2014 the national economy was 
affected by adverse climate conditions and the hoarding of agricultural products, generating 
inflationary pressures through rising food prices, especially for basic cereals. By contrast, in 2015 
inflationary pressures were contained, partly through the fall in prices of basic cereals and fuel, the latter as a result of the conditions prevailing in the international oil market. 
2.5.  In the period under review, sound monetary policy management kept end-of-period inflation 
each year within the upper limit of the target rates laid down in the Monetary Programmes published by the Monetary Authority, together with  a modest depreciation in the nominal exchange 
rate. It should be noted that the inflation rate recorded in December 2015 (2.36%) is the lowest 
for the reference period. 
2.6.  Honduran exports varied considerably, both in general goods (GG) and goods for processing 
(maquila). The GG are mostly agricultural products, whereas the maquila involves manufactures, 
mainly made-up textiles. During the period 2010-2014, exports of GG were more buoyant than maquila exports, which were adversely affected by the behaviour of the United States economy, which is the principal export destination of su ch goods. Average annual growth of GG exports 
was 12.9% as against 11.2% for maquila. 
2.7.  At November 2015, total GG exports (excluding  maquila) amounted to US$3,608.9 million, 
headed by coffee (25.9% of the total), bananas ( 12.3%), palm oil (6.0%) and shrimp and tilapia 
fillet (5.9%). External sales of goods for processing (maquila) in the third quarter of 2015 
amounted to US$3,102.7 million in f.o.b. te rms, a year-on-year growth rate of 4.4% 
(US$131.5 million), mainly in textile products ( 81.8% of the total) and electrical harnesses 
(17.0%); the United States was the chief destination for processed goods (77.7% of the total). 
2.8.  The annual average growth in total imports between 2010 and 2014 was 9.1%, rising from 
US$8,907 million in 2010 to US$11,0 69.7 million in 2014. Honduran imports of GG, which to 
November 2015 amounted to US$8,647 million in c.i. f. terms, consisted mainly of consumer goods WT/TPR/G/336 • Honduras 
- 5 - 
  and raw materials for industry and agriculture. Im ports of goods for processing posted a value of 
US$2,061.8 million in c.i.f. terms, similar to the figure for the same period in 2014, and mainly comprised inputs for the textiles industry and the manufacture of automobile electrical systems. 
The United States is the origin of the bulk of th e raw materials used in processing (68.7% of the 
total) such as cotton yarns and parts for the manufacture of electrical harnesses. 
2.9.  In 2016 the Honduran economy should mainta in a GDP growth rate of between 3.0% 
and 3.5%, inflation should remain at around 5.5% ; exports of general goods should continue to 
grow by 6.6%; fiscal discipline should continue, as should progress in reducing the fiscal deficit. 
Nonetheless the ongoing current account deficit in the balance of payments continues to exert pressure on the exchange rate. 
2.1.2  Monetary and credit policies 
2.10.  The institutional framework for the formulation and implementation of monetary policy in 
Honduras is set out in Articles 342 and 343 of th e Constitution of the Republic of Honduras, the 
Monetary Law (Decree No. 51 of 1 February 1950, amended by Decrees Nos. 128-66 
of 8 November 1966, published in the Official Journal La Gaceta  on 6 December 1966, 136-94 
of 12 October 1994, published in the Official Journal on 28 October 1994, and 164-2007 of 12 December 2007, published in the Official Journal on 26 January 2008), and the Law on the 
Central Bank of Honduras (BCH) (Decree No. 53 of 3 February 1950, amended by 
Decree No. 228-96 of 17 December 1996, Decree No. 248-2002 of 17 January 2002 and Decree No. 111-2004 of 17 August 2004 published in  the Official Journal on 22 September 2004). 
2.11.  Pursuant to the Law on the Central Bank of Honduras, the Bank's governing body is the 
highest authority as far as the formulation of monetary, credit and exchange-rate policy is 
concerned. In practice, the objective laid down in the Law on the BCH amounts to securing price stability under a biannual Monetary Programme that sets out the thrust of the country's monetary, 
credit and exchange-rate policy based on an exhausti ve analysis of internal and external economic 
conditions; the resultant measures and introduction of new instruments are geared to strengthening mechanisms for the effective transmission of the BCH's monetary policy stance on 
interest rates to the financial system, and to improve forecasts and daily management of liquidity 
with regard to specific inflation targets and a target for the level of net international reserves. Although it does not set exchange-rate targets, the BCH does monitor exchange-rate trends. 
2.12.  The BCH also uses the monetary policy rate (MPR) to signal its monetary policy stance to 
the market. The MPR is defined as the maximum interest rate acceptable for BCH bids to purchase 
at liquidity auctions for Honduran financial institutions, and the minimum acceptable rate for bids to sell; accordingly its aim is to vitalize the interbank market and bring interest rates on that 
market closer to the prevailing MPR – the latter has changed seven times over the last six years in 
line with the requirements of liquidity conditio ns in the economy, and has stood at 6.25% since 
July 2015. 
2.13.  A more active monetary policy has helped to mop up excess liquidity through the placement 
of securities under debt-maturity or tranche-issue schemes; this absorption has totalled around L 21.2 billion over the last six years with the shif t from current account deposits to Central Bank 
Bills (LBCH). 
2.14.  The direct monetary policy tools have maintained the required levels of reserves and 
mandatory investment which are calculated on the average of financial institutions' deposit obligations over a 14-day period; they must be fully constituted in demand deposits at the BCH, 
and a minimum daily amount equivalent to 80% of the deposit must be held. 
2.15.  Additionally, the Monetary Programme continued to encourage financial placements to 
finance productive activities that generate grea ter added value for the country's economy such as 
housing, production and microcredit, channelling them through banking institutions. 
2.16.  In 2015, given the lower inflation risk, moderate growth in the monetary aggregates and 
sustained economic growth, the BCH decided to ea se monetary conditions and lowered the MPR on 
three occasions (February, March and July 2015), cu tting it from 7.00% to 6.25%. Rates on LBCH WT/TPR/G/336 • Honduras 
- 6 - 
  were also lowered. This triggered a downward trend in the interest rates applied by the financial 
system, illustrating the efficacy of the monetary policy instruments used. 
2.17.  Over the last six years international reserves of around US$1,700.0 million have 
accumulated, the balance of which stood at US$3,822.3 million at end-2015. The reserves derive 
in part from net purchase transactions of foreign currency performed under the electronic system 
for foreign currency transactions (SENDI) and also from a 48% rise over the last six years (around 18.0% of GDP) in flows of family remittances that  are associated with the performance of the US 
economy, and thus support the balance of paymen ts. The accumulated reserves at end-2015 were 
sufficient to cover 4.5 months of imports of goods and services. 
2.18.  The implementation of these measures and the introduction of new instruments in 
conformity with the guidelines agreed in the ec onomic programme with the International Monetary 
Fund (IMF) aim to strengthen the mechanisms for effective transmission of the monetary policy 
stance to interest rates in the financial system and to improve daily liquidity management and forecasting; accordingly it is anticipated that this will stimulate and develop the interbank market 
and that interest rates there will move closer to the prevailing MPR. 
2.1.3  Exchange-rate policy 
2.19.  Since the last quarter of 2009 the exchange-rat e policy of Honduras has been implemented 
through the electronic system for foreign curre ncy transactions (SENDI), which replaced the 
System of Public Bidding for Foreign Currency (S APDI). SENDI enables bids for the purchase and 
sale of foreign currency to be sent electronically to authorized foreign exchange dealers. 
2.20.  The exchange-rate banding system that had be en in place until mid-2005 was brought back 
into use in July 2011. Thus, following a le ngthy period of exchange-rate stability 
(2005-June 2011), the lempira began to float again. There followed a pattern of steady year-on-year depreciation against the US dollar,  influenced by the trend in the domestic and 
external inflation differential, changes in the basket of its trading partners' currencies, and the 
upward trend in the official reserve assets of the BCH. 
2.21.  In operational terms, the exchange rate of the lempira is determined by currency auctions 
held by the BCH. Since 4 July 2013 an operating band  has been in place that requires the prices of 
all bids to purchase foreign currency to be within  a 7% range above or below the base price; the 
prices are subject to the requirement that bids mu st not exceed 1% of the average base price of 
the seven (7) preceding auctions. 
2.22.  The base price is calculated weekly having regard to the following variables: (1) the 
differential between domestic inflation (measured as the year-on-year variation in the Consumer Price Index) and the external inflation rate of Honduras's principal trading partners (weighted 
average of the inflation rates of Honduras's main trading partners); (2) fluctuations in the 
exchange rates of those countries against the US  dollar; and (3) the performance of official 
reserve assets. 
2.23.  The current system in use in the exchange-rate market has helped to anchor expectations of 
inflation, going some way to ensure that inflation has remained relatively low and contributing to the accumulation of international reserves. In the period between 2010 and 2015 inclusive, the 
average depreciation of the lempira against the US dollar was around 4%. 
2.1.4  Fiscal policy 
2.24.  Over the period 2010-2015 the aim of fiscal policy was to achieve stability in the public 
finances by focusing on reducing the fiscal deficit through measures to contain and rationalize 
public spending and improve tax collection. The fiscal situation improved considerably as a result 
of economic policy measures that led to a subs tantially reduced fiscal deficit, the signing of 
Stand-By Arrangements with the International Monetary Fund (IMF), and the successful 
completion of the second review by the IMF of Honduras's performance under the economic 
programme, as approved by the Executive Board of the IMF in 2015. WT/TPR/G/336 • Honduras 
- 7 - 
  2.25.  During the period under review various laws were passed to correct the fiscal imbalance. 
These include the Law on Revenue Enhancement, Social Equity and Rationalization of Public Expenditure contained in Decree No. 17-2010 (this law constituted a considerable reform of the Honduran tax system, introducing significant changes to various taxes such as sales tax, excise 
taxes, green tax and income tax); and Decree No. 278-2013 containing the Law on Fiscal 
Consolidation, Control of Exemptions and Anti-Evasion Measures. 
2.26.  With respect to the public finances, Honduras has sought to maintain fiscal discipline as a 
rule of sound public administration to control any widening of the fiscal deficit and maintain it at an 
acceptable level that is in line with macroeconomic equilibrium for fiscal consolidation and sustainability. Results from the close of the fiscal year 2014 show that the Central Administration closed with a deficit of L 18,000.3 million, equivale nt to 4.4% of Gross Domestic Product (GDP), a 
contraction of 3.5 percentage points of GDP compar ed to the figure for 2013. This fall in the fiscal 
deficit is essentially the result of a 19.7% expansion in revenues (6.2% in 2013), and barely a 1.0% increase in spending (14.6% in 2013). The expansion in revenues during 2014 was the 
result of the fiscal reform adopted in Decree No. 278-2013 (Law on Fiscal Consolidation, Control of 
Exemptions and Anti-Evasion Measures). 
2.27.  The tax burden in the Honduran economy fell significantly from 2009 as a result of the 
downturn in economic activity and its knock-on effect on revenue collection. Over the last 
four years (2011-2014) the tax burden has been rising again, from 14.8% of GDP in 2011 to 16.3% of GDP in 2014; this considerable increase is the result of the returns produced by the 
reform contained in Decree No. 278-2013, the Law on Fiscal Consolidation, Control of Exemptions 
and Anti-Evasion Measures adopted in December 2013. 
2.28.  According to the State Secretariat for Finance, the fiscal deficit fell to approximately 3.3% of 
GDP in 2015. 
2.29.  The good results that the macroeconomic ma nagement of Honduras has produced were 
recognized at the end of the Second Review of the Program currently in place with the IMF that was carried out in 2015. It stated that macroeconomic performance was better than scheduled and 
that the outlook for 2016 was positive. 
3  COUNTRY VISION AND NATIONAL PLAN 
3.1.  In conformity with Decree No. 286-2009 contai ning the Law for the Establishment of a 
Country Vision and the Adoption of a National Plan  (LVPPN), the Country Vision should be achieved 
by 2038 when its objectives and goals have been attained. The National Plan was established 
for 2010-2022 and 2022-2034 as a planning instrument to help achieve the envisaged objectives and goals. The LVPPN contains the following objectives: 
i. a poverty-free, educated, healthy Honduras with consolidated social welfare 
systems; 
ii. a nation that is growing in democracy and security without violence; 
iii. a productive country that generates opportunities and jobs, sustainably exploits its 
resources and sustainably reduces its environmental vulnerability; 
iv. a modern, transparent, responsible, efficient and competitive State. 
3.2.  Honduras has been making a major effort to eradicate poverty during the years 2014-2016. 
3.3.  The principal reference points of the policy for the country's external sector are the objectives 
in the Country Vision (VP) and the strategic guide lines and progress indicators in the National Plan 
(PN). Thus, objective 3 of the VP is to achieve "[a] productive Honduras that generates 
opportunities and decent jobs, that envisages creating 150,000 jobs through public-private 
partnerships in the short, medium and long term, while sustainably exploiting its resources and reducing environmental vulnerability". WT/TPR/G/336 • Honduras 
- 8 - 
  3.4.  By implementing the Country Vision, the Nation al Plan and the "Everyone for a Better Life" 
plan, all of which are supported by the current Government (2014-2018), Honduras is making solid progress towards becoming a modern, transp arent, responsible, efficient and competitive 
State, to paraphrase the words used by the World Economic Forum in its report for 2016 where 
Honduras is ranked 88
th, having climbed 12 places; its progress is reflected in areas such as 
quality of infrastructure, a substantial reduction in crime and violence, improvements to the road network, and a positive budgetary balance for the State finances. 
3.1.1  Institutional Framework of External Trade Policy 
3.5.  The body responsible for implementing, monito ring and evaluating policy for the external 
sector is the Sectoral Office for Economic Development (GSDE), through the State Secretariat for Economic Development/PROHONDURAS. 
3.6.  This framework publicizes and promotes the o pportunities available under instruments aimed 
at increasing and facilitating external trade through the adoption of clear, transparent and 
non-discriminatory rules and the opening of new markets; harmonizing and implementing trade 
rules and regulations, eliminating barriers and streamlining export processes to encourage the 
best competitive conditions. 
3.7.  The powers available to it include legal instruments to boost economic integration with the 
other Central American countries, free-trade agreements, dispute settlement and trade defence 
mechanisms, and mechanisms to promote exports and investment. 
3.1.2  Main policy features 
3.8.  The Sectoral Strategic Plan for Economic Development (PES-DE) provides that the objective 
of external sector policy is to promote national and international investment, tourism, 
diversification and placement of Honduran exports on international markets in order to help boost investment in the country as well as exports and tourism. 
3.9.  The PES-DE has adopted the following strategies to achieve that objective: 
(i) implementation and consolidation of the PROHONDURAS platform as the basis for a raft of measures aimed at renewing national investor confidence; and (ii) restoration of the country's 
position for foreign direct investment through intensive international promotion. 
3.1.3  Attracting investment 
3.10.  The measures that the Honduran Government ha s taken to strengthen the security system 
and the arrangements it has made to promote investment have enabled foreign investors to 
regard Honduras as a destination for investment, and have contributed to the continued increase 
in foreign-currency investment flows. 
3.11.  In anticipation that its strategic geographical location and specifically its openness will 
achieve the desired purpose of facilitating investment, Honduras has compiled a portfolio of 
potential investments that includes projects in strategic areas for sustainable development such as urban road infrastructure, ports, airports, energy , services, agribusiness, mining and information 
technology. 
3.12.  Honduras has adopted the Law on the Promotion of Public-Private Partnerships and the Law 
on Employment and Economic Development Zones (ZEDE) as innovative instruments to increase investors' interest in the country. 
3.13.  The Commission for the Promotion of Public-Private Partnerships established under 
Legislative Decree No. 143-210 is the agency with  responsibility for this new model for joint 
ventures in Honduras and will manage it as a sustainable development strategy to increase the 
country's competitiveness. The portfolio of projec ts rolled out by the Commission includes roads 
and urban infrastructure, ports, airports, energy, services and mining. 
3.14.  Established under Legislative Decree No. 120-2013 of September 2013, the ZEDEs are 
circumscribed areas of national territory subject to a special regime that will allow them to be WT/TPR/G/336 • Honduras 
- 9 - 
  administered autonomously and manage their own policy in the areas of fiscal matters, security, 
investment promotion, dispute settlement, and th e management and provisions of services; their 
purpose is to speed up the process of attracting in vestment and to create the jobs needed to help 
reduce social inequalities. 
3.15.  To that end the ZEDEs have been the subject of feasibility studies and an implementation 
master plan. As an initial step, the south of the country has been designated as the location for the first ZEDE. The aim is to develop competitive, innovative industries such as logistics hubs, special 
investment districts and technological development centres. 
4  TRADE POLICY DEVELOPMENTS 2010-2015 
4.1.  In the period under review, Honduras continued to apply a trade policy based on 
three pillars: active participation in the multilateral trading system under the WTO; the deepening 
of Central American Integration; and the expansion of its network of preferential trade agreements 
with strategic partners. Additionally, actions geared to trade facilitation and increased competitiveness have been prioritized, as have trade promotion and the attraction of investment. 
4.1  Multilateral Trading System 
4.2.  With regard to the Doha Development Agenda (DDA), Honduras has sponsored several 
proposals and contributions reflecting its priority national interests in relation to agriculture, 
non-agricultural market access (NAMA); trade in services, intellectual property, WTO standards, 
trade facilitation and dispute settlement. 
4.3.  Honduras is part of the Small, Vulnerable Economies (SVE) grouping and the G-33 group that 
are involved in cosponsoring proposals seeking effective special and differential treatment along 
with other flexibilities commensurate with the specific development needs of SVEs like Honduras. 
4.1.1  Agriculture 
4.4.  These negotiations are a priority if Honduras is to achieve access for agricultural products in 
international markets, additional flexibility for "special products" and the creation of a new special 
safeguard mechanism. 
4.1.2  Trade facilitation 
4.5.  As a Member of the WTO, Honduras adopted the Decision on a WTO Trade Facilitation 
Agreement as part of the wider "Bali Package" wi th a view to expediting the movement, release 
and clearance of goods, including goods in transit and trade facilitation issues. 
4.6.  Under Decree No. 146-2015 of 14 December 2015, the National Congress of Honduras 
adopted the Protocol Amending the Marrakesh  Agreement Establishing the World Trade 
Organization to insert the Agreement on Trade Facilitation; the same Decree established the National Trade Facilitation Committee, appointing the State Secretariat for Economic Development 
as the institution with responsibility for working with the other government bodies to coordinate 
work related to the operation and administration of the Protocol Amending the Marrakesh Agreement in conformity with Article 23(2) of the Facilitation Agreement. 
4.7.  The Decree in question is yet to be enacted by  the Executive and will then be published and 
deposited with the WTO upon completion of the relevant legal formalities. 
4.1.3  WTO rules 
4.8.  Honduras actively participates in the negotiations that support the mandate to improve the 
WTO rules. Its positions in this regard ar e aligned with those set out by the SVEs. 
4.1.4  Dispute Settlement Understanding 
4.9.  Honduras participates in the negotiations conducted in the framework of the Dispute 
Settlement Body in order to achieve concrete result s in areas such as the rights of third parties; WT/TPR/G/336 • Honduras 
- 10 - 
  mutually agreed solutions; the interests of developing countries, including special and differential 
treatment; and effective enforcement of the Dispute Settlement Body's recommendations and rulings. 
4.10.  Honduras has participated in the Dispute Settlement Body as a complainant in 
three disputes: (i) "Regime for the Importation,  Sale and Distribution of Bananas" and the 
two related arbitrations; (ii) "Safeguard Measures on Imports of Polypropylene Bags and Tubular Fabric"; and (iii) "Measures Affecting the Importation of Cigarettes". The case relating to "Certain 
measures concerning trademarks and other plain packaging requirements applicable to tobacco 
products and packaging" is currently before the Dispute Settlement Body. Honduras has never 
been involved as a defendant in the dispute settlement mechanism, a fact that demonstrates its strong commitment to, support for and compliance with the disciplines and commitments under 
the multilateral trade agreements administered by the WTO. 
4.1.5  Factual presentations of the Free Trade Agreements in force 
4.11.  On the basis of the Decision on a Transparen cy Mechanism for Regional Trade Agreements 
and pursuant to GATT Article XXIV and Article V of GATS, between 2010 and 2015 Honduras made 
the following factual presentations on trade agreements in force to the Committee on Regional Trade Agreements: 
i. Free Trade Agreement between El Salvador, Honduras and Chinese Taipei (Goods 
and Services); 
ii. Free Trade Agreement between Chile and Honduras (Goods and Services); 
iii. Free Trade Agreement between Central America (Honduras, Nicaragua and 
Guatemala) and Panama; 
iv. Free Trade Agreement between El Salvador , Guatemala, Honduras and Colombia; 
and 
v. Free Trade Agreement between Mexico and Central America (Costa Rica, El Salvador, 
Guatemala, Honduras and Nicaragua). 
4.12.  Honduras recognizes the Aid-for-Trade programme and the role it plays through technical 
assistance activities and in trade capacity building in order to support the country's integration into 
international trade, promote dialogue between its public and private sectors, and strengthen its 
trade capacities. 
4.2  Central American Integration 
4.13.  Honduras became a founding member of the economic integration process by signing, 
on 13 December 1960, the General Treaty on Central American Economic Integration establishing the Central American Common Market (CACM) comprising Costa Rica, El Salvador, Guatemala, 
Honduras and Nicaragua, for the establishment of a Central American free trade zone and the 
adoption of a uniform Central American tariff. The Treaty also sets out the Parties' commitment to establish a common market among themselves. 
4.14.  The Protocol to the General Treaty on Central American Economic Integration (Guatemala 
Protocol) signed on 29 October 1993 establishes and consolidates the Subsystem of Economic Integration, adapting it to the new institutional framework of the Central American Integration System (SICA), and to the new needs of the countries in the region. The Subsystem comprises 
Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama (Panama joined 
on 6 May 2013). 
4.15.  Honduras continues to participate actively in work to improve and deepen Central American 
Economic Integration, especially with regard to th e action needed to make headway in establishing 
the Central American Customs Union; and to harmonize the regulatory framework in the areas of tariffs, customs, rules of origin, sanitary and phytosanitary measures, competition policy, dispute WT/TPR/G/336 • Honduras 
- 11 - 
  settlement, technical requirements, and the procedur es, guidelines and controls that apply in the 
region for the purposes of facilitating trade and achieving mutual recognition of sanitary registers. 
4.16.  Honduras actively participates in the work arising from the Presidential mandates of 2015 
that point the way to progress towards a Central American Customs Union. Accordingly, together 
with the other Central American countries Honduras adopted a Roadmap to move the Central 
American Customs Union forward in conformity with the Guatemala Protocol, the Framework Agreement for Establishing the Central American Customs Union and other legal instruments 
concerning Central American Economic Integration. The Framework Agreement for Establishing the 
Central American Customs Union provides that the stages leading to its establishment are as follows: 
i. promotion of free movement of goods and trade facilitation; 
ii. regulatory modernization and convergence; and 
iii. institutional development. 
4.17.  The Roadmap was designed with those stages in mind and a number of activities that will 
help to speed up the process of establishing  the customs union were approved. The aim of 
promoting free movement and trade facilitation is to increase the competitiveness of Central America as a region, reduce time spent at border posts, and cut the cost of formalities, 
thereby boosting regional trade; regulatory modernization and convergence aim to update the 
regulations in force and the functioning of the institutions. 
4.18.  It is hoped that the Roadmap for the Central American Customs Union will be implemented 
over the next six years. Consolidation of the Central American Customs Union is a strategic priority 
for Honduras. When established, it is expected to be the seventh largest economy in 
Latin America. 
4.2.1  Incorporation of Panama into the Ce ntral American Economic Integration 
Subsystem 
4.19.  Honduras is an active participant in all efforts to incorporate Panama into the Central 
American Economic Integration Subsystem (SIECA). Since the entry into force of Panama's 
Protocol of Accession to the Economic Integration Subsystem of the Central American Integration 
System on 6 May 2013, economic and trade relations between Panama and Honduras have been governed by the legal instruments and rules of the Central American Economic Integration Subsystem and the terms, time-limits and conditions laid down in the Protocol of Accession, 
without prejudice to the Free Trade Agreement in force. 
4.2.2  Impact of intraregional trade 
4.20.  The regional economic area is Honduras's second trading partner. According to figures from 
the BCH, at November 2015, 23.4% of exports of goods were bound for Central American 
markets; and 19.5% of imports originated in Central America. In the third quarter of 2015, 
Honduras's participation in intraregional exports was 10.6%, ranking it fourth for exports to the 
regional market which, in the third quarter of 2015, stood at US$6,899 million according to data 
from the Secretariat for Central American Economic Integration. Honduras's chief trading partners in Central America are El Salvador and Guatemala. 
4.21.  The importance of intraregional trade is shown in the considerable benefits it brings to the 
region; currently a large number of Central American firms, mostly small and medium-sized, do 
business directly when trading goods, leading to investment of Central American capital, sources of employment, encouragement for new entrepre neurs and the development of trade-related 
services. WT/TPR/G/336 • Honduras 
- 12 - 
  4.2.3  Process of deep integration towards free movement of persons and goods 
between the Republics of Guatemala and Honduras 
4.22.  Honduras and Guatemala have taken a key step towards establishing a customs union 
between their territories that is to be based on the objectives and principles set out in the legal 
instruments governing regional economic integration. 
4.23.  The model adopted for the customs union is in line with the provisions of Article XXIV of 
GATT 1994, which is part of the WTO Agreement; and Article 15 of the Guatemala Protocol. 
Against that background, both countries have undertaken to work on a bilateral basis to move 
towards free movement of goods and natural persons between their territories. 
4.24.  To that end, the legal instrument that will enable the gradual and progressive establishment 
of the customs union, in a manner consistent with the legal instruments of Central American 
integration, is an Enabling Protocol for the Process of Deep Integration leading to the 
Free Movement of Goods and Natural Persons betw een the Republics of Guatemala and Honduras. 
The Protocol was adopted by the legislative bodi es of Honduras and Guatemala in December 2015 
and January 2016 respectively, and its entry into force is pending subject to legal procedures. 
4.25.  A Roadmap has been agreed for 2016 focusing on implementation of the Customs Union. 
When the customs union between Honduras and Guat emala becomes operational, it will create the 
largest economy in Central America (excluding Panama): it will cover 52% of the territory of 
Central America, 58% of its population and 46% of its GDP (excluding Panama). 
4.2.4  Central American Strategy for Trad e Facilitation and Competitiveness 
4.26.  With respect to trade facilitation, together with the other Central American member 
countries of the Central American Economic Integration Subsystem Honduras is implementing the 
initiative stemming from the mandate of the Pres idents and Heads of States of Central America 
that was contained in the Presidential Declaration of Punta Cana of June 2014. The Central 
American Strategy for Trade Facilitation and Competitiveness with Emphasis on the Coordinated 
Management of Borders was adopted under Agreement No. 01-2015 (COMIECO-LXXIII) of 22 October 2015 by COMIECO; it sets out the acti on to be taken in the medium and long term. 
Its principal objective is to promote coordination  between public and private sector agencies to 
improve revenue collection processes, controls, border security and further facilitate movement of goods and people within a framework of effective controls and efficient use of resources. 
4.27.  Accordingly, as an initial step in improving Central American trade facilitation, 
five short-term priority measures are being implemented, including the following: (i) advance 
declaration or processing of the Central American  Single Customs Form (FAUCA), Single Customs 
Declaration (SCD), and Single Transport Declarat ion (DUT); (ii) streamlining and coordination of 
immigration controls; (iii) electronic phytosanitary and animal health certificates; (iv) logging of 
transport movements using radio frequency devices (RFID); and (v) use of camera systems at border crossings. 
4.28.  The trade facilitation strategy includes me asures to help reduce export and import 
formalities in order to bolster the advantage gained from the Central American market. The intention is to stimulate trade flows and increase the competitiveness of Central American businesses, especially micro- and small businesses in the region. An ECLAC study anticipates that 
when fully implemented, the impact of the trade facilitation measures is likely to produce a rise of 
up to 5% in GDP, an increase in tax revenue (thr ough sales and excise taxes) of up to 0.7% of 
GDP and an increase of up to 24% in exports. 
4.3  Regional trade agreements (RTA) 
4.3.1  Trade agreements currently in force 
4.29.  With the dawn of the new millennium, Honduras adopted a strategy that aimed to diversify 
exports by signing preferential trade instrument s. Between 2000 and 2015, the country drew on 
the momentum thus generated to bring nine new preferential instruments into force in the form of free trade agreements and/or association agreements. WT/TPR/G/336 • Honduras 
- 13 - 
  4.30.  The strategy meant that Honduras's exports to the world grew significantly. According to the 
Aid for Trade at a Glance 2015 report for Honduras, in 2006 38.9% of all exports from Honduras 
received preferential tariff treatment; by 2013 that figure had risen to 99.5%. 
4.31.  The signing of preferential trade agreements caused the country to improve its services 
platform and its facilities for production and export. Thus, the investments it had made in energy, 
roads, port infrastructure, airport infrastructure, an d facilitation of access to credit for production 
led to the expansion of exports and diversification of export destinations. Under the regional trade 
agreements in force, Honduras has preferential access for its exports to 41 countries around the 
world. The various RTAs have enabled the country to  increase its preferential trade flows, although 
more needs to be done in order to take full advantage of them. 
4.32.  It is important to note that the RTAs in force contain new-generation disciplines including 
matters not currently subject to regulation under the WTO multilateral trade agreements, such as 
investment, government procurement, sustainable development and competition policy. In other areas, the matters addressed contain more ambitious provisions and commitments than those 
currently set out in the WTO Agreements, for example on market access, trade in services and 
intellectual property. This is based on the bala nce of the outcomes reached in the agreements. 
4.33.  There follows a list of the RTAs currently in force: 
Table 4.1 Regional Trade Agreements 
 Agreement Date of entry into force 
1 Free Trade Agreement between Central America and the 
Dominican Republic 19 December 2001 
2 Free Trade Agreement between the Dominican Republic, 
Central America and the United States (CAFTA-DR) 1 April 2006 
3 Central America-Chile Free-Trade Agreement 19 July 2008 
4 Free Trade Agreement between El Salvador, Honduras and 
Chinese Taipei 15 July 2008 
5 Central America-Panama Free Trade Agreement. 8 January 2009 
6 Free Trade Agreement between El Salvador, Guatemala, 
Honduras and Colombia 26 March 2010 
7 Free Trade Agreement between the Republics of Costa Rica, 
El Salvador, Guatemala, Honduras and Nicaragua, and Mexicoa 1 January 2013 
8 Association Agreement between Central America and the 
European Union 1 August 2013 
9 Free Trade Agreement Honduras - Canada 1 October 2014 
a This Agreement merged all the various Free Trade Agreements between Mexico and Costa Rica, 
Mexico and Nicaragua; and Mexico-Guatemala, El Salvador and Honduras. 
4.34.  It should be noted that the Free Trade Agreement between Honduras and Peru will enter 
into force in 2016. 
4.3.2  Trade agreements currently being ne gotiated and future negotiations 
4.35.  Honduras is currently engaged in trade negotiations with Ecuador and the Republic of Korea. 
Negotiations to sign a Free Trade Agreement with the Republic of Korea began in 2015 and are being conducted jointly with the other Central American countries. 
4.36.  Where Ecuador is concerned, negotiations to reach a Partial Scope Economic 
Complementarity agreement between Honduras and Ecuador began in 2015. 
4.37.  In order to complement exports to other European countries, in 2012, together with 
Guatemala, Costa Rica and Panama, Honduras op ened negotiations for a Free Trade Agreement 
with the European Free Trade Association (EFTA) countries. Honduras's negotiation of this 
agreement has not been completed and is in fa ct suspended, although the possibility of a 
resumption in the near future has not been ruled out. WT/TPR/G/336 • Honduras 
- 14 - 
  4.38.  With regard to the partial scope agreement between Honduras and Cuba noted in the 
previous TPR, there has been no change in the situation regarding the conclusion of the legal 
framework of the Agreement, and the negotiation of the tariff reduction schedules is pending. 
4.39.  Honduras has formally stated at the relevant fora its intention to join the Trans-Pacific 
Partnership Agreement (TPP) and the Pacific Alliance. 
5  FUTURE POLICY DIRECTIONS 
5.1.  Honduras will continue faithfully to comply with its international commitments, thereby 
strengthening the national and multilateral trading system; it will also strive to take advantage of 
the foreign trade platform by promoting exports and investments. 
5.2.  Honduran trade policy will retain its principal ob jectives of generating employment, attracting 
investment, and taking advantage of the opportuni ties provided under regional trade agreements 
and the multilateral trading system, with a view to generating sustainable and equitable economic 
growth. 
5.3.  Similarly, trade policy will continue to be coordinated with the objectives and actions set out 
in the Country Vision, the National Plan and the "Everyone for a Better Life" plan. We will continue 
to promote action to improve the business climate; increase competitiveness and productivity, particularly in strategic sectors; promote macroeconomic stability; promote and attract 
investment; generate sources of employment; promote economic recovery; modernize 
infrastructure by promoting projects to help convert Honduras into a regional logistics hub; modernize the State; exploit natural resources in a socially sustainable and environmentally responsible manner; improve transparency, combat  corruption and impunity, and promote action 
to improve public safety. The underlying aim will be to ensure better living conditions for 
Honduran society. 
5.4.  We will also continue to maintain close communication with society and national production 
sectors in order that we can work together, in a transparent fashion, on Honduran trade policy and 
ensure that the benefits of trade lead to better living conditions. 
5.5.  In conclusion, Honduras is committed to the multilateral trading system and attaches great 
importance to monitoring its trade policies because doing so promotes transparency and 
investment, thus making it possible to beco me better integrated into world trade. 
5.6.  Honduras thanks the WTO Secretariat for its support and Members for their interest in its 
Third Trade Policy Review. 
__________