WT/TPR/S/234 Trade Policy Review 
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II. TRADE AND INVESTMENT REGIME 
(1) GENERAL FRAMEWORK  
1. The general institutional framework for the form ulation of trade and investment policy in 
Honduras is virtually unchanged since its previous trade policy review in 2003.1  The Constitution of 
Honduras has been in force since 1982 and it states that the fundamental bodies of the State (the 
Executive, the Legislature, and the Judiciary) are independent of each other as far as their functions 
and powers are concerned.2  The Executive is empowered, inter alia , to conclude international treaties 
and agreements, to put them before the National C ongress for ratification, and to monitor compliance.  
The head of the Executive is the President3 and his powers include the regulation of tariffs in 
accordance with the law. 
2. The Legislature is composed of a National Congress, a unicameral collegiate body made up of 
128 deputies elected by universal suffrage every four years.4  International treaties have to be ratified 
by Congress, which may approve or reject them, but may not make reservations.  In the area of 
foreign trade, the National Congress is responsible fo r preparing, decreeing, interpreting, amending 
and repealing laws, approving or rejecting inte rnational treaties concluded by the Executive, 
determining by means of a law those cases in wh ich subsidies are granted for reasons of public 
interest or as a tool for economic and social grow th, authorizing ports, crea ting or abolishing customs 
offices and free zones on the initiative of the Executiv e, and regulating trade by sea, land and air. 
3. Independent judges and magistrates are empowered  to administer justice on behalf of the 
State.  The Judiciary is composed of a Supreme Court of Justice, Appeals Courts, and the Courts 
determined in the law.5  Courts of Justice are responsible for handing down and implementing rulings 
and for applying the law in specific cases.  Where th ere is inconsistency between a constitutional rule 
and an ordinary legal rule, the former prevails;  legal rules also take precedence over any other 
subordinate regulation. 
4. The National Anti-Corruption Council (CNA) is a civil society body est ablished by the State 
in March 2005 to tackle corruption.6  The High Court of Audit began operating as an external control 
mechanism in January 2003.  Its remit is to gua rantee legal, efficient, effective and economic 
management and use of financial resources.  Th e Court has functional and administrative autonomy 
vis-à-vis  the State authorities and is subject only  to the Constitution of the Republic.  The Law on the 
                                                      
1 The general constitutional and legal framework of Honduras is described in detail in WTO (1999). 
2 For the purposes of political admi nistration, Honduras is divided into 18 departments, in each of 
which the Executive appoints a titular governor and an alternate.  The departments in turn are divided into autonomous municipalities administered by councils el ected by direct suffrage, pursuant to the law. 
3 The President is elected by the people and is assisted by three Presidential Appointees (or 
Vice-Presidents) and the Council of Mi nisters.  The President's term of  office is four years without any 
possibility of re-election and it begins on 27 January following the date of the elections.  The main functions of 
the President include upholding and enforcing the Constitu tion, and directing foreign policy.  The President has 
ministries to assist in carrying out executive functions. 
4 Its main functions include preparing, decreeing, interpreting, amending and repealing laws and 
approving the General Revenue and Expenditure Budget annually on the basis of a draft submitted by the Executive. 
5 The Supreme Court of Justice is composed of  the Constitutional, Criminal, Labour and Civil 
Chambers.  It comprises 15 titular judges and seven alte rnates, elected by Congress for a term of seven years. 
6 Legislative Decree No. 7-2005.  The CNA deals with reports, complaints and cases involving 
corruption.  Following an investigation, where approp riate, it forwards the reports or the outcome of its 
investigations to the appropriate superior State body, following up on any actions taken by that body.  The CNA is presided over by the General Assembly. Honduras WT/TPR/S/234 
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High Court of Audit provides sanctions of betw een three and 15 years' imprisonment to punish 
unlawful acquisition of wealth. 
(2) TRADE POLICY OBJECTIVES AND FORMULATION  
5. Furthering the process of Central American integration and strengthening trade and 
investment flows between Honduras and the rest of the world remain the key objectives of Honduras's 
trade policy.  For example, in 1993, the Central American Common Market (CACM) was revived and 
Honduras has taken part in several negotiations on other bilateral a nd regional agreements with the 
objective of securing preferential access to strategi c markets (section (4)(ii)).  Another significant 
objective of Honduran trade policy is to foster Hondur as's participation in the WTO in order to help 
the country achieve full integration in the intern ational economic and trade order (section (4)(i)). 
6. The Ministry of Industry and Trade (SIC), through the Under-Secretariat for Economic 
Integration and Foreign Trade (SIECE), is still the body with competence for regulating foreign trade, 
promoting exports and investment, and defini ng and implementing trade policy in Honduras.7  
Through its Directorate-General for Economic Integra tion and Trade Policy, the SIC is responsible for 
formulating, implementing and evaluating econo mic integration and bilateral, regional or 
interregional trade policies, including the negotia tion and, where appropriate, conclusion of the 
necessary agreements or treaties, and coordinating the latter activity with the Ministry of Foreign 
Affairs.8  The Permanent Mission of Honduras in Geneva  is part of the SIC and represents Honduras 
at the WTO. 
7. As part of its task of formulating, drafting and implementing trade policy, the SIC continues 
to coordinate action with other international-trade-related Stat e institutions and private sector 
organizations.  The public sector institutions with wh ich the SIC coordinates the formulation of trade 
policy include:  the Ministry of Finance;  the Ex ecutive Directorate of Revenue (DEI);  the Central 
Bank of Honduras (BCH);  the Ministry of Agriculture and Livestock;  the Ministry of Natural Resources and the Environment;  the Ministry of  Foreign Affairs (formulation, coordination, 
implementation and evaluation of foreign policy);  the Ministry of Health;  and the Ministry of 
Tourism.  It also coordinates action with the National Telecommunications Commission, the Ministry 
of Public Works, Transport and Housing, the National Banking and Insurance Commission, the 
Merchant Marine, and the Honduran Postal Service. 
8. The National Tariff Commission is an ancillary ad visory body for the Ex ecutive whose role is 
to ensure the proper application of the Ce ntral American Tariff and Customs Regime.
9  The National 
Foreign Trade Commission has been responsible since April 2003 for making recommendations to 
guide the President of the Republic in trade negotiations.10 
                                                      
7 Decree No. PCM-008-1997. 
8 Executive Decree No. CM-002-2001.  The Commission is composed of one titular member and 
one alternate member from the Ministry of  Industry and Trade (Chair);  the Ministry of Finance;  the Ministry of 
Planning, Coordination and the Budget;  and the Centra l Bank of Honduras (BCH).  Additionally, three titular 
and three alternate members are appointed by the H onduran Private Enterprise Council (COHEP).  The 
Commission is assisted by a Secret ariat and a Technical Committee. 
9 Decree No. 222-1992.  The Decree gives the SIC responsibility for domestic policy on all matters 
related to the implementation of the Convention on the Central American Tariff and Customs Regime. 
10 The Council is chaired by the Mini ster for the President's Office and is composed of the Ministers for 
Industry and Trade, Agriculture and Livestock, Foreign Affairs, and Finance, and the President of the BCH.  It 
is also attended by representatives of the organized labour sector, farmers' unions and private enterprise 
members. WT/TPR/S/234 Trade Policy Review 
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9. The Government holds consultations with pr ivate sector organizations for the purpose of 
formulating foreign trade policy, including:  th e Honduran Private Enterprise Council (COHEP);  the 
Chambers of Commerce and Industry, especially t hose in Tegucigalpa and San Pedro Sula;  the 
National Association of Industrialists (ANDI);  the Foundation for Investment and Development of 
Exports (FIDE);  the Honduran Chamber of Insu rers;  the Honduran Association of Banking 
Institutions (AHIBA);  professional bodies;  and the Honduran Maquila  Industry Association.  These 
organizations coordinate consu ltations with the Government through the COHEP.  There is no 
independent body which regularly examines tr ade policy and its impact on the economy. 
(3) TRADE LAWS AND REGULATIONS  
10. The Constitution takes precedence over all other laws.  According to the Constitution, an 
international treaty becomes a law of the Republic of Honduras once it has been ratified, published in 
the Official Journal, and has met the requirement s for its entry into force.  The provisions in 
international treaties are, therefore, admissible be fore the national courts.  If there is a conflict 
between a treaty or agreement and the law, the fo rmer prevails.  Honduras states that arbitral and 
judicial rulings of an international nature  are admissible and automatically enforceable. 
11. All international treaties must be approved by the National Congress before they are ratified 
by the Executive, unless the Execu tive has sole competence for the question concerned.  Under 
Article 55 of the Guatemala Protocol on administrative acts, decisions taken by the Council of Ministers for Central American Economic Integrati on (COMIECO) are directly enforceable by States 
parties.  Where an international agreement aff ects a constitutional provision, it must be approved 
following the same process as that governing revisi on of the Constitution before  it can be ratified by 
the Executive. 
12. In Honduras, there is no foreign trade law as su ch.  Trade regulations in certain areas (for 
example, customs procedures, unfair business practices or safeguards, technical rules and regulations) incorporate into domestic legislation the provisions of the legal texts agreed at the Central American or multilateral level.  Honduras's main trade laws are listed in Table II.1. 
Table II.1 
Main trade legislation, 2010 
Area  Legislation  
Foreign trade Uniform Central American Customs Code (CAUCA IV) (Resolution No. 223-08) and its 
implementing regulations (RECAUCA) (Resolution No. 224-08) 
Customs National Customs Law (Decree No. 212-87) 
Anti-dumping and countervailing 
measures Central American Regulations on Unfair Business Practices (Resolution No. 193-07) 
Safeguards Central American Regulations on Sa feguard Measures (Resolution No. 194-07) 
Government procurement Law on Govern ment Procurement (Decree No. 74-01) 
Competition Law to Protect and Promot e Competition (Decree-Law No. 357-05) 
Consumer protection Consumer Protection Law (Decree No. 24-08) 
Standards and other technical 
requirements Central American Regulations on Standardiza tion Measures, Metrology and Authorization 
Procedures (Resolution No. 37-99) 
Sanitary and phytosanitary measures Plant and Animal Health Law (Decrees Nos. 157-94 and 344-05) 
Health Code (Decree No. 65-91) Central American Regulations on Sanitary a nd Phytosanitary Measures and Procedures 
(Resolution No. 37-99) 
Intellectual property rights Law on Copyright  and Related Rights (Decree No. 4-99-E) 
Industrial Property Law (Decree-Law No. 12-99-E) 
Investment Investment Law (Decree No. 80-92)  and its Regulations (Resolution No. 345-92) 
Source : Information provided by the authorities. 
 Honduras WT/TPR/S/234 
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(4) INTERNATIONAL TRADE RELATIONS  
(i) World Trade Organization (WTO) 
13. Honduras ratified the Marrakesh Agreement Esta blishing the World Trade Organization on 
14 December 1994 and deposited its instrument of  ratification with the WTO on 1 March 1995.  
Consequently, the WTO Agreements have become laws of Honduras.  As a developing country, 
Honduras has utilized the transitional periods a llowed under various WTO Agreements.  As a 
minimum, Honduras grants MFN treatment to all its trading partners. 
14. In accordance with the commitm ents it has undertaken, Honduras has submitted notifications 
to the WTO (Table II.2), but in March 2010 it still had ten notifications pending.11 
Table II.2 
Principal notifications submitted by Honduras  pursuant to the WTO Agreements, June 2010 
WTO Agreement and article number  WTO document – date  
(latest document if submitted regularly) Description of the requirement 
Agreement on Agriculture 
Article 18.2 G/AG/N/HND/28, 10 August 20 09 Export subsidies (Table ES.1) 
Article 18.2 G/AG/N/HND/29, 4 December  2009 Export subsidies (Table ES.2) 
Article 18.3 G/AG/N/HND/23, 19 October 2007 Do mestic support measures (Table DS.1) 
Article 18.3 G/AG/N/HND/26, 28 September 2008 Do mestic support measures (Table DS.2) 
Agreement on Implementation of Article VI of the GATT (anti-dumping) 
Article 16.4 G/ADP/N/195/Add.1, 21 April 2010 Semi-annual reports on actions taken 
Article 16.5 G/ADP/N/14/Add.29, 22 April 2010 Competent authorities 
Article 18.5 G/ADP/N/1/HND/3, 16 March 2009 Laws and regulations 
Article 18.5 G/ADP/Q1/HND/2, 4 December 2009 Replies to questions 
Agreement on Implementation of Article VII of the GATT (customs valuation) 
Annex III(2) G/VAL/N/4/HND/1, 29 August 2003 Re servation concerning the application of 
minimum values 
Agreement on Import Licensing Procedures 
Article 5 G/LIC/N/2/HND/4, 18 January 2010 List  and description of products subject to 
licensing 
Article 7.3 G/LIC/N/3/HND/1/Add.1, 26 Marc h 2010 Replies to questionnaire on licences 
Agreement on Safeguards 
Article 12.6 G/SG/N/1/HND/3, 16 March 2009 Laws, regulations and administrative 
procedures 
Agreement on the Application of Sanitary and Phytosanitary Measures 
Article 7, Annex B G/SPS/N/HND/4, 9 May 2001 Publication of regulations 
Not specified G/SPS/N/HND/32, 20 April 2009 Measures adopted to implement the 
Agreement 
General Agreement on Trade in Services 
Article III.4 and Article IV.2 S/ENQ/ 78/Rev.11, 26 Octobe r 2009 Enquiry point 
Article III:3 S/C/N/364, 27 Marc h 2006 Reference Paper on Basic 
Telecommunications 
State trading (Understanding on the Interp retation of Article XVII of the GATT 1994) 
Article XVII(4)(a) G/STR/N/13/HND, 21 May 2010 Annual State trading activities 
                                                      
11 WTO online information.  Viewed at:  
http://stat.wto.org/CountryProfile/WSDBCou ntryPFView.aspx?Language=E&Country=HN. WT/TPR/S/234 Trade Policy Review 
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WTO Agreement and article number  WTO document – date  
(latest document if submitted regularly) Description of the requirement 
Agreement on Subsidies a nd Countervailing Measures 
Article 25.11 G/SCM/N/203/Add.1, 22 April 2010 Semi-annual report 
Article 25 and Article XVI:1 of the  
GATT 1994 G/SCM/N/155/HND/Suppl.1, 
18 December 2009 New and Full Notification 
Annex VII(b) G/SCM/110/Add.6,  17 July 2009 GNP per capita 
Article 32.6 G/SCM/N/1/HND/3, 16 March 2009 Laws and regulations 
Article 25.12 G/SCM/N/18/Add.27, 28 April 2009 Competent authorities 
Agreement on Technical Barriers to Trade 
Article 10.1 and 10.3 G/TBT/ENQ/ 36, 5 February 2010 Enquiry point 
Article 10.6 G/TBT/N/HND/61, 19 May 2010 M easures adopted to implement the 
Agreement 
Annex 3C G/TBT/CS/N/165, 27 March 2006 Accep tance of the Code of Good Practice 
Agreement on Trade-Relate d Investment Measures 
Article 5.1 G/TRIMS/N/1/HND/1, 4 October 1995 Laws and regulations 
Agreement on Trade-Related Aspects of  Intellectual Property Rights 
Article 63 IP/N/6/HND/1, 3 May 2001 Replies to questionnaire 
Article 63 IP/Q-Q4/HND/1, 30 Janua ry 2002 Review of legislation 
Article 63.2 IP/N/1/HND/1, 23 Oc tober 2002 Laws and regulations 
Source : WTO Secretariat. 
 
15. Honduras took part in the negotiations on fina ncial services under the General Agreement on 
Trade and Services (GATS), and accepted th e Fifth Protocol annexed to the GATS.12  Although 
Honduras did not participate in the negotiations on  basic telecommunications and has not signed the 
Fourth Protocol annexed to the GATS, in 2005 it signed the Reference Paper on Basic Telecommunications and unilatera lly submitted new specific commitments in that subsector 
(Chapter 4 Telecommunications).
13  Honduras did not participate in the Information Technology 
Agreement.14 
16. No Honduran trade practice has been the subject of a complaint under the WTO dispute 
settlement mechanism.  Honduras has, however, take n part in six dispute settlement procedures as a 
complainant and in various other cases as an inte rested third party (Table II.3).  Among the most 
important cases in which Honduras took part as a comp lainant are the regime for the importation, sale 
and distribution of bananas (three cases) against the European Union, in which a settlement was 
reached on 15 December 2009.15 
                                                      
12 The Fifth Protocol was signed on 19 April 1999 and ratified under Legislative Decree No. 60-1999. 
13 WTO document GATS/SC/38/Suppl.2, 16 September 2005. 
14 WTO document G/IT/1/Rev.42, 29 June 2010. 
15 Geneva Agreement on Trade in Bananas.  See WTO document WT/L/ 784, 15 December 2009. Honduras WT/TPR/S/234 
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Table II.3 
WTO dispute settlement cases to which Ho nduras is or has been a party, June 2010 
Case Respondent/ complainant Measures adopted (date) WTO document 
Cases in which Honduras was/is a complainant 
Regime for the importation, 
sale and distribution of 
bananas European Communities/ 
Guatemala, Honduras, Mexico 
and the United States Request for consultations (October 1995) WT/DS16/1-7 
Regime for the importation, 
sale and distribution of 
bananas European Communities/Ecuador, 
Guatemala, Honduras, Mexico 
and the United States Request for consultations (February 1996);  
circulation of the Panel report (May 1997);  
notification of appeal (June 1997);  adoption of the reports of the Panel and the 
Appellate Body (September 1997) WT/DS27/1-61 
WT/DS27/HND 
WT/DS27/AB/R WT/DS27/R/GTM 
WT/DS27/R/HND 
Regime for the importation, 
sale and distribution of 
bananas European Communities/ 
Guatemala, Honduras, Mexico, 
Panama and the United States Request for consultations 
(January 1999) WT/DS158/1-3 
Measures affecting imports 
from Honduras and Colombia Nicaragua/ Honduras and 
Colombia Request for consultations 
(June 2000) WT/DS201/1-2 
Measures affecting the 
importation of cigarettes Dominican Republic/Honduras Request for consultations (August 2003) 
 WT/DS300/1 
Measures Affecting the 
importation and internal sale 
of cigarettes Dominican Republic/Honduras Request fo r consultations (October 2003);  
circulation of the Panel report 
(November 2004);  circulation of the report 
of the Appellate Body (April 2005);  Circulation of arbitration report provided 
for in Article 21.3(c) (August 2005) WT/DS302/1-17 
Cases in which Honduras was/is a third party 
Anti-dumping investigation 
regarding Portland cement 
from Mexico Guatemala/Mexico Request for consultations (October 1996);  
circulation of the Panel report (June 1998);  
notification of appeal (August 1998);  adoption of the reports of the Panel and the 
Appellate Body (November 1998) WT/DS60/1-12 
WT/DS60/R 
WT/DS60/AB/R 
Definitive anti-dumping measures on grey Portland 
cement from Mexico Guatemala/Mexico Request for c onsultations (January 1999);  
circulation of the Panel report 
(October 2000);  adoption of the Panel 
report (November 2000) WT/DS156/1-4 
WT/DS156/R 
Measures affecting imports 
from Honduras and Colombia Nicaragua/Colombia 
 Request for consultations (J anuary 2000) WT/DS188/1-2 
Measures affecting patent 
protection Brazil/United States Request fo r consultations (May 2000);  
notification of a mutu ally agreed solution 
(July 2001) WT/DS199/1-4 
Measures affecting 
telecommunications services Mexico/United States Request fo r consultations (August 2000);  
establishment of the Panel (April 2002);  circulation of the Panel report (April 2004) WT/DS204/1-9 
Price band system and 
safeguard measures relating to certain agricultural 
products Chile/Argentina Request for consultations (October 2000);  
circulation of the Panel report (May 2002);  notification of appeal (June 2002);  
adoption of the reports of the Panel and the 
Appellate Body (October 2002) WT/DS207/1-12 
WT/DS207/R WT/DS207/AB/R 
Generalized system of 
preferences European Communities/Thailand Request for consultations and participation 
in the consultations (December 2001) WT/DS242/1-6 
Conditions for the granting of 
tariff preferences to 
developing countries European Communities/India 
 Request for consultations (March 2002);  
circulation of the Panel report 
(December 2003);  circulation of the 
Appellate Body report (April 2004);  circulation of arbitration report provided for 
in Article 21.3(c) (September 2004) WT/DS246/1-16 WT/TPR/S/234 Trade Policy Review 
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Case Respondent/ complainant Measures adopted (date) WTO document 
Measures affecting the 
approval and marketing of 
biotech products European Communities/United 
States Request for consultations (May 2003);  
circulation of the Panel report 
(September 2006) WT/DS291/1-37 
Measures affecting the 
approval and marketing of 
biotech products European Communities/Canada Request  for consultations (May 2003);  
circulation of the Panel report 
(September 2006);  mutually agreed solution (July 2009) WT/DS292/1-40 
Measures affecting the 
approval and marketing of biotech products European 
Communities/Argentina Request for consultations (May 2003);  
circulation of the Panel report (September 2006) WT/DS293/1-41 
Anti-dumping duties on steel 
pipes and tubes from 
Guatemala Mexico/Guatemala Request fo r consultations (June 2005);  
circulation of the Panel report (June 2007) WT/DS331/1-7 
Indicative prices and 
restrictions on ports of entry Colombia/Panama Request for consultations (July 2007);  
circulation of the Panel report (April 2009);  
circulation of arbitration report provided for in Article 21.3(c) (October 2009) WT/DS366/1-15 
Source : WTO Secretariat. 
 
17. Honduras takes an active part in the multilateral trading system, including the Doha 
Development Round, and has  put forward several proposals, especially in conjunction with other 
Members, such as the Group of Small, Vulnerable Economies (SVE) and the Group of 33 (G-33).  
The negotiations on agriculture are of particular importance to Honduras.16  As a member of the G-33, 
Honduras promotes special and differential treatmen t as an integral part of the agriculture 
negotiations, mainly with regard to affording prot ection to Special Products which may be designated 
as such  at a future point in time by Honduras, and the establishment of a new Special Safeguard Mechanism.
17  Together with the other SVE countries, Honduras has submitted several proposals in 
different areas of the negotiation18, including market access in agriculture19;  market access for 
non-agricultural products20;  services;  and key aspects of the fisheries subsidies.21  Honduras, in 
conjunction with other Members, is also a co-sponsor  of proposals aimed at incorporating the system 
of notification and registration of geographical indica tions for wine and spirits into the mandate of the 
negotiations.  In the matter of trade facilita tion, Honduras has co-sponsored proposals on the 
formation of the Trade Facilitation Comm ittee and the definition of its functions22, and on national 
committees in each Member to implement th e commitments undertaken in that regard.23  
Additionally, Honduras supports initiatives aimed at  strengthening and reforming the WTO dispute 
settlement mechanism. 
(ii) Preferential agreements 
18. Most of Honduras's trade involves partners with which Honduras has signed preferential 
agreements.  The country is participating in th e establishment of a customs union, the CACM, and 
also in several FTAs and partial scope agreements .  In 2009, 70 per cent of merchandise exports were 
                                                      
16 WTO document WT/MIN(05)/ST/41, 15 December 2005. 
17 WTO document WT/MIN(05)/ST/64, 15 December 2005. 
18 The proposals are summarized in WTO document WT/COMTD/SEW/22/Rev.4, 19 October 2009. 
19 Proposal by Small, Vulnerab le Economies on market access in agriculture, WTO document 
TN/AG/GEN/11, 11 November 2005. 
20 WTO document TN/MA/W/66, 11 November 2005. 
21 WTO document TN/RL/W/226/Rev.5, 22 September 2008. 
22 WTO document TN/TF/W/157, 27 November 2008. 
23 WTO document TN/TF/W/158, 23 February 2009. Honduras WT/TPR/S/234 
 Page 17 
 
 
to countries with which Honduras had preferential ag reements in force;  the corresponding figure for 
imports was also 70 per cent. 
19. The main characteristics of the customs union a nd the FTAs that have entered into force are 
outlined in Table AII.1.  The CACM and the FTA between the Dominican Republic, Central America 
and the United States (DR-CAFTA) are described  below, these being the most important for 
Honduras in terms of value of merchandise trade.  In addition, Honduras has also signed agreements 
with Colombia, Chile, the Dominican Republic, Mexi co, Panama and Chinese Taipei (Table AII.1). 
(a) Central American Common Market (CACM) 
20. Honduras is a founding member of the CACM established in 1961, which also encompasses 
Costa Rica, El Salvador, Guatemala and Nicaragua.  The Tegucigalpa Protocol to the Charter of the 
Organization of Central American States, which h as been in force since July 1992, amended the 
regional legal framework by establishing the Central American Integration System as the institutional 
framework for Central American regional integration.   The Guatemala Protocol to the General Treaty 
on Central American Economic Integration, which was signed in 1993 and entered into force on 
17 August 1995, defines the objectives, princi ples and measures to achieve economic union. 
21. The institutional structure of the CACM consis ts of the Council of Ministers for Economic 
Integration (COMIECO);  the Intersectoral Counc il of Ministers for Economic Integration;  the 
Sectoral Council of Ministers for Economic In tegration;  the Executive Committee for Economic 
Integration (CEIE);  and the Secretariat for Cent ral American Economic Integration (SIECA).  The 
Central American Bank for Economic Integr ation (CABEI) acts as a support agency.24  T h e  
CACM has a number of regional regulations, includi ng the Uniform Central American Customs Code, 
together with Central American regulations on ru les of origin, unfair business practices, safeguard 
measures, standardization, and sanitary and phyto sanitary measures.  The CACM has had its own 
trade dispute settlement mechanism since 2003.  Un der Articles 22 and 23 of the Convention on the 
Central American Tariff and Customs Regime and Ar ticle 38 of the Guatemala Protocol, changes to 
the Central American Import Tariff are made by COMIECO. 
22. The list of products excluded from regional free trade has been steadily  reduced.  Unroasted 
coffee and cane sugar are the only exceptions to re gional free trade.  At bilateral level, Honduras 
maintains exceptions to free trade with El Salvador  for ethyl alcohol, petroleum products and distilled 
spirits25;  and maintains an exception with  Costa Rica for roasted coffee. 
23. The Framework Agreement Establishing the Ce ntral American Customs Union was signed on 
12 December 2007, ratified by Honduras under Decree No. 145-2008, deposited at the SIECA 
on 4 January 2008, and published in La Gaceta  (the Official Journal) on 22 November 2008.  The 
Agreement envisages the following stages:  (a) pr omotion of free movement of goods and trade 
facilitation;  (b) regulatory modernization and co nvergence;  and (c) institutional development. 
                                                      
24 CABEI, founded in 1960 by Costa Rica, El Salvad or, Guatemala, Honduras and Nicaragua, has its 
headquarters in Tegucigalpa and aims  to promote the economic and social development of Central America.  
CABEI operates mainly through low interest loans, and it generally finances infrastructure projects within the 
region. 
25 Trade in ethyl alcohol (HS 2207) is subject to import control but the authorized volumes are 
tariff-free.  Imports in excess of the authorized volu mes are subject to payment of MFN duties.  Trade in 
petroleum products (HS 2710, 2712, 2713, 2715) and distilled spirits (HS 2208 except tariff line 2208.90.10) is subject to tariff payment. WT/TPR/S/234 Trade Policy Review 
Page 18 
 
 
24. Under Article 6 of the Guatemala Protocol, some or all members of the CACM may proceed 
at the speed agreed upon by them within the proces s of Central American economic integration.  In 
1996 El Salvador and Guatemala decided to advance at  a faster rate with the formation of a customs 
union.26  Subsequently, in June 2000 , Honduras and Nicaragua joined in these efforts, followed by 
Costa Rica in 2002.  In 2009, the common external tariff was 95.7 per cent harmonized.  In order to 
achieve this level of harmoniza tion, COMIECO adopted various resolutions on tariff amendments 
between 2003 and 2009.  In addition, the third a nd fourth amendments to the Harmonized System 
have been adopted.27 
25. As a result of the increased efforts towards Cent ral American regional integration, as of 2007 
El Salvador, Guatemala, Nicaragua and Costa Rica as a group dislodged the European Union from its 
place as Honduras's second largest trading partner (Cha pter I(3)(i)).  Honduran exports of general 
goods to other Central American countries rose from US$474 million in 2006 to US$645 million in 
2008, falling in 2009 to US$543 milli on owing to the economic crisis.  Honduran imports of general 
goods from Central America rose from US$1.223 b illion in 2006 to US$1.716 billion in 2008 
(US$1.456 billion in 2009).28 
(b) Dominican Republic-Central America-United States Free Trade Agreement (DR-CAFTA) 
26. In January 2003, Honduras and its four CACM partners embarked upon formal negotiations 
for an FTA with the United States, which were  completed on 17 December 2003.  DR-CAFTA was 
signed on 5 August 2004 and ratified by  the National Congress of Honduras under 
Decree No. 10-2005 of 3 March 2005.  DR-CAFTA en tered into force for Honduras on 1 April 2006 
under Agreement No. 74-2006 of 31 March 2006.  DR-CAFTA has been notified  to the WTO.29  The 
Law Implementing the Dominican Republic-Central America-United States Free Trade Agreement set 
out in Decree No. 16-2006 of 15 March 2006 was enac ted in order to implement the DR-CAFTA and 
bring it into force, and to ensure that there wa s no conflict between the dom estic legal order and the 
commitments established under the Treaty. 
27. The vast majority of the mutual obligations undertaken by the parties under DR-CAFTA are 
similar.  Some are implemented on a bilateral basis between the United States and each of the Central 
American countries or the Dominican Republic, in th e case of tariff quotas for example.  White maize 
is the only product excluded from the liberalization process.  Most industrial products and consumer 
goods became duty free when DR-CAFTA entered in to force.  Tariffs on other products will be 
eliminated over periods of five to ten years, wh ile agricultural products enjoy longer tariff reduction 
periods ranging from 15 to 20 years.30  Tariff quotas were set for the transition periods in the case of 
40 agricultural products, which genera lly have longer transition peri ods.  For Honduras, the transition 
periods are 15 years for beef, pork and yellow maize, 18 years for rice and chicken thighs, and 20 years for dairy products (see Chapter IV(1)). 
28. The entry into force of DR-CAFTA has cons olidated the United States as Honduras's main 
trading partner (Chapter I(3)(i)).  Honduran expor ts of general goods to the United States grew from 
US$796 million in 2006 to US$1.156 billion in 2008, but fell back to US$906 million in 2009 as a 
                                                     
 
26 Resolution 27-1996 (COMRIEDRE-IV) of 22 May 1996. 
27 WTO (2010). 
28 BCH (2010b). 
29 WTO documents WT/REG211/N/3 and S/C/N/372, both dated 17 August 2006. 
30 The base rates for tariff reduction were the MFN tariffs in the Central Am erican Import Tariff in 
force on 1 September 2003.  In addition to the stag ing categories listed in Annex 3.3, paragraph 1, of 
DR-CAFTA, the Schedule of Honduras contains five staging categories with reduction periods of 10, 12, 14 and 17 years. Honduras WT/TPR/S/234 
 Page 19 
 
 
result of the economic crisis.  Similarly, Honduran  imports of general goods from the United States 
rose from US$2.028 billion in 2006  to US$3.541 billion in 2008, falling to US$2.101 billion in 
2009.31 
(c) Other agreements 
29. Honduras also has FTAs with the following trad ing partners:  Chile, Colombia, Mexico, 
Panama, the Dominican Republic and Chinese Taipei (Table AII.2). 
30. Additionally, Honduras has concluded several  agreements through the Latin American 
Integration Association (LAIA), including the par tial scope agreements signed with Colombia and 
Venezuela.32  Honduras also participates in the LAIA's  Framework Agreement between MERCOSUR 
and the CACM, concluded in 1998, which aims to fost er trade, investment and technology transfer but 
does not include tariff preferences. 
31. Honduras enjoys tariff preferences granted unilate rally by Australia, Canada, Japan, Norway, 
New Zealand, the Russian Federation and the Eu ropean Union under the Generalized System of 
Preferences (GSP). 
32. Honduras does not participate in the Global System of Trade Preferences among Developing 
Countries (GSTP). 
33. Honduras is a member of the International Coffe e Agreement 2007, which it signed at the seat 
of the International Coffee Organization (ICO) on 27  June 2008.  Honduras is also a Party to the 
International Sugar Agreement 1992 and a Member  of the International Sugar Organization. 
(d) Agreements awaiting approv al or under negotiation 
34. On 9 August 2007 Honduras, together with El Salvador and Guatemala, signed an FTA with 
Colombia.  The FTA was approved by the National Congress of Honduras under Decree No. 188-2007 of 10 January 2008 and entered in to force on 26 March 2010 under Ministerial 
Decision No 402-2010 of 18 March 2010.  The Par tial Scope Agreement between Colombia and 
Honduras,  which was signed on 30 May 1984, ceased to ha ve effect 30 days after the entry into force 
of the FTA. 
35. In May 2010 Honduras, in conjunction with the other members of the CACM, finalized the 
negotiation of the Association Agreement with the Eur opean Union.  The aim of that Agreement is to 
improve political dialogue between the regions, rein force cooperation in several fields and facilitate 
trade and investment flows.  The Agreement incl udes matters relating to trade in goods, trade in 
services and company formation;  government procur ement, intellectual property, competition, trade 
and sustainable development;  and dispute settlement and institutional aspects. 
36. Honduras, El Salvador, Guatemala and Nicara gua are negotiating FTAs with Canada and 
CARICOM.  Honduras and the other CACM memb ers are working to harmonize the various 
FTAs concluded with Mexico, particularly as regards rules of origin. 
                                                     
 
31 BCH (2010b). 
32 For further information on the LAIA and related agreements, see LAIA and Foreign Trade 
Information System websites, respec tively at:  http://www.aladi.org/ and 
http://www.sice.oas.org/TPD/ CACM_PAN/CACM_PAN_s.ASP. WT/TPR/S/234 Trade Policy Review 
Page 20 
 
 
(5) INVESTMENT FRAMEWORK  
37. The Directorate-General for the Promotion of Investment and Trade in the Ministry of 
Industry and Trade continues to be responsib le for formulating and implementing Honduras's 
investment policy.  The Foundation for Investment  and Development of Ex ports (FIDE) conducts 
activities to promote exports and investment.33  Its main activity is assistance to foreign firms wishing 
to invest in Honduras, providing information on the investment climate, establishing contacts with local entities and offering legal assistance.  FIDE h as also been assigned the technical and operational 
secretariat function of the National Competitiveness Programme (NCP) ( Honduras Compite  - 
Honduras Competes).
34 
38. The 1992 Investment Law governs the investment  regime in Honduras and its basic objective 
is to promote and guarantee both Honduran and foreign investment.35  The Law is implemented 
through the Regulations on the Investment Law.36  The Investment Law affords national treatment to 
foreign investors in accordance with  the core principle that private enterprises, whether Honduran or 
foreign, must be treated in the same way;  nevertheless, a number of specific requirements must be met.  Prior authorization from the Government is required for investment in the following sectors as 
provided for in Article 18 of the Investment Law:  health services supplied by the private sector;  
telecommunications;  generation, transmission and dist ribution of electricity;  air transport;  hunting, 
fishing and aquaculture;  exploitatio n of forest resources;  and resear ch, surveying and exploitation of 
mines, quarries, hydrocarbons a nd other related substances.
37 
39. The Investment Law guarantees the right of owne rship to Hondurans and foreigners, except in 
areas specified in the Constitution and in some other laws.  These exceptions include a ban on 
foreigners owning land situated less than 40 km . from the Honduran coast or border, pursuant to 
Article 107 of the Constitution (defence and security).   Since 1991, however, foreigners have been 
able to purchase land in "tourist zones" for the buildi ng of private dwellings or for the development of 
tourism projects approved by the Ministry of Tourism. 
40. The Investment Law also guarantees the right to acquire foreign exchange through the 
banking system, exchange offices and other institutions  authorized for imports of goods and services, 
debt repayments abroad, payment of dividends a nd repatriation of capital;  freedom to produce and 
market goods and services and to set prices;  and freedom to take out insurance in Honduras or abroad. 
                                                     
 
33 FIDE is a private, non-profit-making body set up in 1984 to promote Honduras as a destination for 
foreign investment, provide support for development and encourage exports. 
34 The Honduras Compite  Programme was established to improve the climate for business in Honduras, 
attract greater investment flows and promote exports.  Its mission is to promote Honduras's competitiveness and 
that of its companies by improving the business climate, facilitating the process of integrating the Honduran 
economy into international markets and providing more effective coordination of pr oductive activities.  To that 
end the National Competitiveness Commission (NCC) was es tablished in April 2002 as an ad hoc body to 
advise the Executive on competitiveness.  The Law on the Promotion and Development of the Competitiveness of Micro, Small and Medium Enterprises wa s enacted in 2008 (Decree No. 135-2008). 
35 Decree No. 80-1992. 
36 Resolution No. 345-1992. 
37 The specific requirements are set out in the Environm ent Law;  Health Law;  Tourism Law;  General 
Law on Public Administration;  Law on the Central Bank;  Social Insurance Law;  Telecommunications Law;  
Electric Energy Law;  Agrarian Reform  Law;  Civil Aeronautics Law;  Banking and Insurance Law;  Law on the 
Modernization of Agriculture;  Labour Code;  Taxation Law and other applicable laws. Honduras WT/TPR/S/234 
 Page 21 
 
 
41. The Investment Law and its Regulations provid e for foreigners to engage in trade and 
industry on a small scale38, provided they have obtained na turalization papers as Hondurans.39 
42. The Investment Law and its Regulations impo se other restrictions on investment.  For 
example, Article 51 provides that prior authorizati on from the Government is required, for reasons of 
public interest, for investment in agricultural or  agro-industrial activities that exceed certain limits 
(latifundio  - large estates), in financial services and insu rance, and in educational services supplied by 
the private sector.  Additionally, the Honduran publ ic procurement system includes mechanisms to 
give preference to Honduran businesses and goods (Chapter III(4)(iii)). 
43. The Investment Law provides that all investment , whether by Hondurans or foreigners, must 
be registered with the SIC.  The registration certifi cate gives the investor the right to benefit from the 
guarantees afforded by the Law and is processe d immediately except in sectors where prior 
authorization from the competent body is required.  In the latter case, the Ministry submits the 
application for authorization to engage in the activ ity to the competent authority, which must take a 
decision within a maximum of 60 days, pursuant to th e relevant legal provisions;  if the decision is 
favourable, the interested party may seek registration of the investment. 
44. The Honduran investment regime grants fiscal and financial incentives for several types of 
investment, including certain tourism projects (see Chapter III(4)(i)) and special regimes:  Free Zones 
(ZOLI), Temporary Import Regime (RIT), and Free Export Processing Zones (ZIP) (Chapter III(3)(iv)). 
45. The FTAs negotiated by the CACM with Ch ile (Chapter 10), the Dominican Republic 
(Chapter IX), the Dominican Republic and the United States (DR-CAFTA) (Chapter 10), contain 
special provisions on investment.  The FTA between Guatemala, El Salvador, Honduras and Mexico also incorporated a chapter (Chapter XIV) in that regard, as did the FTA between El Salvador, 
Honduras and Chinese Taipei (Chapter 10);  the FT A between Honduras and Panama (Chapter X);  
and the FTA with Colombia (Chapter 12).  FTAs generally guarantee MFN treatment to foreign 
investors, who are entitled to the same incentiv es as those afforded to Honduran undertakings. 
46. Honduras has been a member of the World Bank' s Multilateral Investment Guarantee Agency 
(MIGA) since 30 June 1992 and of the Internationa l Centre for Settlement of Investment Disputes 
(ICSID) since 16 March 1989. 
47. Honduras had concluded a number of bilateral agreements on  promotion and reciprocal 
protection of investment (date of signature in brackets):  Switzerland (14 October 1993);  United 
Kingdom (7 December 1993);  Spain (18 March 19 94);  Germany (21 March 1995);  United States 
(1 July 1995);  Chinese Taipei (26 June 1996);  Chile (11 November 1996);  France (28 April 1998);  
Ecuador (26 July 2000);  Cuba (9 June 2 001);  and the Netherlands (15 January 2001). 
48. Honduras has not signed any double taxation ag reements.  Consequently the National 
Treasury does not recognize any loans or payments  made by a taxpayer in another country and 
                                                     
 
38 "Small-scale trade and industry" means undertakings  with capital of less than L 150,000, excluding 
land, buildings and vehicles. 
39 Article 49 of the Investment Law Regulations. WT/TPR/S/234 Trade Policy Review 
Page 22 
 
 
therefore does not take them into account when determining the amount of tax owing commensurate 
with tax obligations in Honduras.  However, H onduras has signed a bilateral agreement on assistance 
and the exchange of fiscal information with the United States.  It has also signed another such 
agreement at the Central American leve l within the framework of the CACM.40 
 
                                                      
40 Decrees Nos. 115-1991, 124-2007 and 136-2007. Honduras WT/TPR/S/234 
 Page 23 
 
 
ANNEX II.1:  AID FOR TRADE1 
 
(1) OVERVIEW  
1. Aid for Trade can serve a useful role in supporting Government efforts to enhance Honduras's 
integration into the multilateral a nd regional trading system.  Its effectiveness is largely dependent on 
government policies and institutional capacity, includ ing the standing commitment to integrate trade 
into national development strategies and priori tize supply-side limitations and trade-related 
infrastructure constraints among the country's development needs. 
2. Honduras's Poverty Reduction Strategy (PRS ) was initially drawn up in 2001 and has 
subsequently been updated to focus on transparency  and public sector outcomes, job creation and  
environmental protection.  To help it attain those objectives Honduras has received assistance from 
the World Bank, the IDB and other donors, principa lly the United States, the European Union and its 
member States, Canada, Japan, Chinese Taipei and Switzerland.  Nevertheless, according to the 
progress report on the Poverty Reduction Strategy 20 08, despite Honduras's efforts, there has been no 
reduction in poverty. 
(2) INTEGRATION OF TRADE INTO NATIONAL DEVELOPMENT STRATEGIES  
(a) Poverty Reduction Strategy (2006-2015), C ountry Vision (2010-2038) and Nation Plan 
(2010-2022) 
3. The key development challenges for Honduras are to accelerate growth and translate it into 
poverty reduction.  The PRS is cons tructed around six main pillars:  (i ) accelerating economic growth;  
(ii) reducing poverty in rural areas;  (iii) reducing urban poverty;  (iv) investing in human capital;  
(v) strengthening social protection for specific groups ;  and (vi) ensuring the sustainability of the 
strategy.  In each of these areas, the PRS outlines policy measures, programmes and specific projects 
supporting  implementation of the strategy.  Thr ee overarching themes cut across these six pillars:  
gender equity, environmental sust ainability, and decentralization. 
4. The Country Vision and Nation Plan have four objectives:  (i) reduction in extreme poverty 
and improvement of education, health and security  with consolidated social welfare systems;  
(ii) democracy and security without violence;  (iii) increase in productivity and job creation 
combining the sustainable exploitation of resources with a reduction in envi ronmental vulnerability;  
and (iv) increase in competitiveness.  Several minist ries have formulated sectoral strategies to support 
the Plan which include Aid-for-Trade elements. 
(b) Supply-side limitations and trade -related infrastructure constraints 
5. In order to accelerate growth and benef it from the Dominican Republic-Central 
America-United States Free Trade Agreement (DR-CAFTA), the Government has increased 
investment in infrastructure and is exploring the possibilities for establishing public-private 
partnerships to continue the trend.  The completi on of the logistic corridor between El Salvador and 
Puerto Cortés is a priority and is being supplemen ted by other investment to improve secondary roads 
in areas with agricultural potential.  As part of the PRS, the Government intends to promote the 
development of micro, small and medium enterpri ses (MSMEs) to increase employment by supplying 
technical assistance to enhance competitiveness.  When combined with the aid currently being 
supplied by several NGOs, financial institutions and training programmes, this assistance will provide 
these businesses with access to local, regional and international markets.  The Government is 
                                                      
1 This section was drafted by the Development Division. WT/TPR/S/234 Trade Policy Review 
Page 24 
 
 
broadening the scope of this component of the PRS to rural areas to provide MSMEs in the 
agricultural sector with opportunities to become part of the supply chain and create further 
opportunities for non-agricultural employment. 
6. In its reply of 2009 to the joint OECD/WTO questionnaire monitoring Aid for Trade, 
Honduras noted that trade policy analysis, formulatio n and implementation were its main priorities in 
relation to Aid for Trade.  Other priorities we re the diversification of exports, increased 
competitiveness and trade facilitation.  In addition to  the needs identified by the Government, several 
development partners have c onducted their own analyses of limitations and constraints. 
7. In the Country Assistance Strategy Progress Report for the Republic of Honduras 
(2007-2010), the World Bank noted several significant structural constraints that hampered growth, 
including poor performance of public utility ente rprises and the low quality of public services, 
especially education.  The Bank noted four interv entions that were key to accelerating growth, 
namely:  increasing the level of education;  im proving infrastructure (including transport and port 
infrastructures);  developing financial markets;  and improving governance.  It also noted that a reduction in bureaucracy was necessary, alongside meas ures to combat corruption and  strengthen the 
rule of law, in order to boost investment and achieve the full benefit of the opportunities provided 
under DR-CAFTA. 
8. In the IDB Country Strategy with Honduras (2007-2010) the IDB noted that accelerating 
economic growth in a country with a small domestic market called for a policy to expand external 
markets.  It went on to say that in order to  seize the opportunities and face up to the greater 
competition associated with the process of positioni ng itself in the global marketplace, Honduras had 
to become more competitive and seek market niches  for products with greater value added, so as to 
promote investment and employment.  It noted that improving competitiveness and promoting new 
investments depended, to a large extent, on main taining a macroeconomic framework conducive to 
investment.  Additionally, it called for a more  efficient use and operation of the existing 
infrastructure, and concentration of new inv estments on eliminating bottlenecks that hamper 
development, in particular in the area of  road, port, and energy infrastructure. 
9. Regarding food safety and sanitary and phytosanita ry measures, the inab ility to meet various 
standards had stalled the developm ent of exports.  For example, in the livestock industry classical 
swine fever in the region is a significant constrai nt on exporters of pig meat.  Newcastle disease is 
also a significant constraint on poultry producers' a ccess to markets.  Table II.1 below summarizes 
Sanitary and Phytosanitary (SPS) issues.
2 
Table II.1 
SPS issues of interest to Honduran exporters 
SPS area  General interest  Specific issues  
Animal health • Strengthen surveillance system 
• Improve prevention, eradication, and control of 
pests and diseases 
• Strengthen laboratory network 
• Maintain a current health database 
• Establish a specialized technical experts group 
as part of quarantine system • Eradication, monitoring and control of 
Newcastle disease and classical swine fever 
to enable export to the United States 
• Risk assessment on processed pork (pork 
tamales) to enable exports to the United States 
• Improved sanitary controls and traceability to 
allow more beef and dairy products to be exported to various markets 
                                                      
2 In March 2010 the Standards and Trade Development Facility approved funding for a project to 
improve the operation of the National SPS Committee in Honduras. Honduras WT/TPR/S/234 
 Page 25 
 
 
SPS area  General interest  Specific issues  
Phytosanitary measures • Identify requirements for exporting fruit and 
vegetables 
• Strengthen phytosanitary  diagnostic system 
• Strengthen the surveillance network and the 
quarantine system 
• Establish a pest risk analysis unit 
• Strengthen register for use and control of 
pesticides • Eradication and control of  fruit flies, citrus 
canker, citrus leprosis, citrus tristeza and palm thrip to enable various fruits and vegetables to be exported to Central 
American countries and the United States 
• Pest risk assessment for jalapeño peppers, 
melon and cucumber to enable exports to 
Mexico 
Source : Regional SPS Balance Sheet for Central America:  Stre ngthening links between supply and demand of SPS-related 
technical assistance in Central Amer ica, Jason Hafmeister, Standards an d Trade Development Facility, 2008. 
 
(c) Trade-related technical assistance 
10. Honduras's last TPR noted problems in the following areas:  lack of diversification of exports, 
competition policies, administration of trade agreem ents, customs procedures and customs valuation, 
quantitative restrictions on imports, SPS, government procurement, protection of intellectual property 
rights and environmental issues.  Most of the pr oblems have been addressed in specialist courses 
organized by donors or inter-governmental bodies. 
11. Since 2008 Honduras has benefited from the im plementation of two national activities, 
namely an introduction to the WTO dispute se ttlement rules and procedures and a workshop on 
progress in WTO negotiations.  A Honduran official  attended the regional trade policy course for 
Latin American countries held in Colombia in  2009.  Honduras has participated in regional 
WTO activities focusing on various aspects of the Or ganization.  Two officials have attended trade 
policy courses held in Geneva (in 2008 and 2010).  Honduras has also attended the Specialized 
Thematic Course on Dispute Settlement in Geneva and 16 officials have completed computer-based 
training courses since 2008. 
12. Honduran officials have also attended a numb er of courses run by the United States on 
mainstreaming trade in national policies, trade f acilitation, customs valuation, intellectual property 
rights, agriculture and regional trade agreements.  Canada, South Korea, Ja pan and Switzerland have 
also held seminars on capacity-building.  The IDB and the IMF have delivered courses on trade 
policy.3  The IDB has provided assistance in the fo rm of programmes on promoting competitiveness 
and the negotiation and implementation of trade polic ies and has contributed to capacity-building for 
the implementation of DR-CAFTA. 
(3) AID-FOR-TRADE FLOWS  
(a) Overview 
13. External assistance rose to 9 per cent of gross national income between 1994 and 2004 (on 
average), and attained a maximum of 16 per cen t following Hurricane Mitch;  in 2005 it again 
accounted for 9 per cent.  In 2008 total Official Development Assistance (O DA) to Honduras rose to 
US$488.72 million.  Over 30 per cent of total ODA for 2008 (US$148 million) was accounted for by 
categories of Aid for Trade.  Aid for Trade genera lly constituted slightly more than 12 per cent of 
total ODA in 2006.  Almost half of the Aid for Trade was assigned to infrastructure, mainly to 
improve the road network and storage facilities.  Sectoral support accounted for 48.5 per cent;  most 
                                                      
3 Doha Development Agenda Trade Capacity Buildin g Database.  Viewed at:  http://tcbdb.wto.org. WT/TPR/S/234 Trade Policy Review 
Page 26 
 
 
of the funding was allocated to agriculture (2 8 per cent), industry (11 per cent), financial 
services (8 per cent) and tourism (1.5 per cent) (Table II.2). 
Table II.2 
Aid-for-Trade flows:  CRS proxies 
(US$'000) 
 Commitments   Disbursements  
CRS purpose codes  Average 
2002-2005  2006  2007   2006 2007 
Trade policy and regulations and trad e-related adjustment       
33110 Trade policy and administrative 
management 1,743 .. 1,268  .. 19 
 33120 Trade facilitation 162 0 0  175 0 
 33130 Regional trade agreements (RTAs) .. .. 143  .. 143 
 33140 Multilateral trade negotiations 1 169 0  68 0 
 33150 Trade-related adjustment .. .. ..  .. .. 
 33181 Trade education/training 26 0 105  8 105 
Subtotal  1,932  169 1,515   251 266 
       
Economic infrastructure:       
 21010 to 21081 Transport and storage 62,040 3,132 16,394  11,009 1,579 
 22010 to 22040 Communications 309 301 176  219 0 
 23010 to 23082 Energy supply and generation 19,207 759 4,504  383 7,259 
Subtotal  81,557  4,193  21,074   11,612  8,838  
       
Building productive capacity (including trade activitiesa):       
 25010  Business and other services 8,745 416 519  827 739 
 24010 to 24081 Banking and financ ial services 9,705 8,951 180  253 405 
 31110 to 31195 Agriculture 32,590 5,840 3,551  6,800 10,741 
 31210 to 31291 Forestry 14,413 8,665 246  853 64 
 31310 to 31391 Fishing 793 269 548  269 541 
 32110 to 32182 Industry 3,615 1,720 1,247  3,437 3,114 
 32210 to 32268 Mineral resources and mining 42 251 49  251 0 
 33210  Tourism 9,624 790 781  790 608 
Subtotal  79,527  26,903  7,121   13,480  16,212 
       
 - Focus on trade developmenta       
 - Principal objective   667   8,578 
 - Significant objective   1,946   1,938 
Subtotal    2,613    10,516  
       
Total Aid for Trade  163,017  31,265  29,710   25,343  25,316 
.. Not available. 
a Trade development activities are identified in the CRS via the Trade Development po licy marker.  The amounts shown represent 
Productive Capacity building activities marked as contributing principally or significantly to trade development.  Note however  
that some CRS reporting donors may not use the Trade Developm ent policy marker and that the amounts presented under this 
category cannot be added up when  reporting on the global flows. 
Source : OECD, Creditor Reporting System 
 
14. In 2008 the core partner for the development of Honduras was the World Bank.  The Bank's 
contribution accounted for 60 per cent of all Aid for Trade, including over US$48 million earmarked 
for road transport, US$21 million for agriculture and US$8 million for agroindustries.  The IDB was 
the second largest source of finance, contributing 14 per cent of Aid for Trade including US$21 million for transport policies and infrastructures.   Bilateral donors, namely Belgium, Denmark, 
Germany, Japan, Spain, Switzerland and the United St ates, contributed 27 per cent of the rest of the 
Aid for Trade received by Honduras in 2008 (Table II.3).
4 
                                                      
4 OECD Creditor Reporting System, data for 2008 in constant dollars. Honduras WT/TPR/S/234 
 Page 27 
 
 
Table II.3 
Support from donors 
Donor  Summary 
World Bank: 
Country Assistance Strategy for the 
Republic of Honduras (2007-2010) Budget of US$260 million from the Internati onal Development Association for the Country 
Assistance Strategy over the period 2007-2010, ear marked for equitable economic growth for 
job creation;  good governance;  environmen tal protection and risk management;  and 
development of human capital (education, h ealth and social protection).  A sum of 
SDR 10-12 million per annum has be en provided for debt relief. 
IDB:  Country Strategy with Honduras 
(2007-2010) 
 The IDB Strategy is focused on:  (i) the investment climate;  (ii) competitiveness;  
(iii) development of human capital;  and (iv) strengthening institutions and risk management.  
Loans amounting to between US$419.4 million a nd US$443.4 million have been proposed for 
the period 2007-2010. 
United States: 
Agency for Interna tional Development 
(USAID) Country Assistance Strategy Plan  
Millennium Challenge Corporation 
(MCC) USAID supplied almost 40 per cent of all donations to the public sector in the period 2004-2009.  
The priorities were:  governance;  justice and tr ansparency;  and health and education.  In 
June 2005 Honduras signed a Millennium Cha llenge Account Compact for US$215 million for 
five years.  In 2008 Honduras failed to achie ve the standard required under the corruption 
indicator to continue receiving MCC finance. 
European Union: 
Strategy Paper 2007-2013 By way of illustration, €223 million were assigned under the Strategy Paper for the period 
2007-2013 with a particular emphasis on three strategic objectives, namely  strengthening social 
cohesion by investing in human capital ;  fostering sustainable manageme nt of natural resources, 
especially forestry ;  and  formulating comprehensive public  security and justice policies.  
Germany In November 2008 Germany promised Honduras  €44 million for basic education, promotion of 
MSMEs and sustainable use and conservation of natural resources . 
Canada In 2009 the Canadian International Development Agency (CIDA) chose Honduras as one of its 
20 priority countries .  CIDA's objectives in Honduras address specific needs in the fields of 
health, education and agriculture .  CIDA disbursed funds tota lling over Can$17 million during 
the period 2007-2008.  
Japan Assistance from Japan amounted to US$11 million per annum (on average) between 2004 and 
2006;  it was allocated to public health laboratorie s and the construction and repair of roads and 
bridges. 
Spain Donations from the Spanish Government are used for strengthening public administration;  
health, education, sustainable development;  the management of natural resources and the 
environment;  disaster-prevention;  the reducti on of ecological vulnerability;  tourism, micro 
enterprises and fishing. 
Chinese Taipei Assistance donated under the FTA concluded with Honduras. 
Source : WTO Secretariat (Development Division) 
 
15. Honduras obtained relief on its multilateral external  debt under the Heavily Indebted Poor 
Countries (HIPC) Initiative. 
(b) Support to regional integration 
16. A Committee on Trade Capacity Building (TCB) was established within  the framework of 
DR-CAFTA.  The Committee ensures that TCB activities respond to needs identified by the 
DR-CAFTA countries in the "national trade capacity  building strategies" formulated in conjunction 
with the countries of Central America.  The Co mmittee comprises United St ates Government bodies, 
non-governmental organizations, representatives fr om the private sector and four multilateral 
institutions:  the IDB, the World Bank, the Organi zation of American States and the United Nations 
Economic Commission for Latin America and the Caribbean. 
17. USAID also provides technical assistance to help Honduras fulfil its commitments under 
DR-CAFTA.  USAID supports the efforts made by Honduras to improve legislation and policy in the 
fields of trade and investment and provides assistan ce to farmers and small enterprises to enable them 
to obtain greater benefit from the trading opportun ities which are available as a result of DR-CAFTA. WT/TPR/S/234 Trade Policy Review 
Page 28 
 
 
(4) OUTLOOK FOR AID FOR TRADE  
18. Donors reacted to the events of June 2009 by suspending the launch of new operations and 
disbursements for projects under way.  The IDB and World Bank assistance strategies for the country will expire in 2010.  The USAID strategy ended in  2009.  In January 20 10 several donors announced 
that they would resume their support to Honduras.