WORLD TRADE  
ORGANIZATION  WT/REG212/M/1  
WT/REG213/M/1  
WT/REG214/M/1 
29 September 2009 
 (09-4542) 
Committee on Regional Trade Agreements 
Fifty-fourth Session  
 
 
CONSIDERATION OF THE FREE TRADE AGREEMENT BETWEEN  
MEXICO AND THE NORTHERN TRIANGLE – EL SALVADOR,  
GUATEMALA AND HONDURAS, GOODS AND SERVICES 
 
Note on the Meeting of 15 September 2009  
 
Chairman: Mr D. Brauns (Germany) 
 
 
1. The meeting was convened in document  WTO/AIR/3410, dated 7 August 2009. 
2. Under Agenda Item B.XI of its 54th Session, the Committee on Regional Trade Agreements 
(hereinafter CRTA or the Committee) took up cons ideration of the Free Trade Agreement between 
Mexico and the Northern Triangle – El Salvad or, Guatemala and Honduras (hereinafter the 
'Agreement'), goods and services.  
3. The Chairman  noted that the Agreement had been signed on 29 June 2000 and had entered 
into force on 15 March 2001 for El Salvador, Guatemala and Mexico, and on 1 June 2001 for 
Honduras.  Six notifications had been made to th e WTO in relation to the Agreement, covering in 
each case bilateral trade relations in goods and ser vices between Mexico and El Salvador, Guatemala 
and Honduras, respectively.  The Agreement between El Salvador and Mexico had been notified by 
the Parties to the WTO on 23 May 2006 under Article XXIV:7(a) of the GATT 1994 and the 
Understanding on the Interpretati on of Article XXIV of GATT 1994 as an Agreement establishing a 
free trade agreement (document WT/REG212/N/1) an d under GATS Article V:7(a) as an Agreement 
providing for the liberalization of trade in services  within the meaning of GATS Article V (document 
S/C/N/367).  The Agreement between Honduras and Me xico had been notified to the WTO by the 
Parties on 10 July 2006 under Article XXIV:7(a)  of the GATT 1994 and the Understanding on the 
Interpretation of Article XXIV of GATT 1994 as an  Agreement establishing a free trade agreement 
(document WT/REG213/N/1) and under GATS Article  V:7(a) as an Agreement providing for the 
liberalization of trade in services within th e meaning of Article V of the GATS (document 
S/C/N/368/Rev.1).  The Agreement between Guatemala and Mexico had been notified to the WTO by the Parties on 3 July 2006 under Article XXIV:7( a) of the GATT 1994 and the Understanding on the 
Interpretation of Article XXIV of GATT 1994 as an  Agreement establishing a free trade agreement 
(document WT/REG214/N/1) and under GATS Article  V:7(a) as an Agreement providing for the 
liberalization of trade in services within  the meaning of Article V of the GATS 
(document S/C/N/369).  The text of the Agreement w as available, together with its Annexes, on the 
Parties' official websites. The Factual Presentation on the goods and services aspects (documents WT/REG212/2, WT/REG213/2 and WT /REG214/2, dated 6 July 2009) had been 
prepared by the Secretariat on its own responsibilit y in full consultation with the Parties, in 
accordance with paragraph 7(b) of the Transpar ency Mechanism for Regional Trade Agreements 
(document WT/L/671).  In addition, written questions  and replies on the Agreement had been recently 
distributed in documents
 WT/REG212/3, WT/REG213/3, WT/REG214/ 3, dated 8 September 2009.  
He proposed to organize the consideration of the Ag reement by asking first the Parties and then other 
Members to give any general comments.  The Co mmittee would then turn to the specifics of the WT/REG212/M/1  
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  Agreement using the Factual Presentation to guide th e debate.  He proposed to go through the Factual 
Presentation by section, and then through the questions and replies document.  
4. The representative of El Salvador
 said it was an honour to participate in the consideration of 
the Agreement, especially when the 188th anniversary of the independence of each of the Central 
America countries and of Mexico was commemora ted and he congratulated the Parties on the 
occasion.  He thanked the Secretariat for having prepared the Factual Presentation and Members for 
their interest in the Agreement.  He also recogni zed the work of the Parties and their efforts to 
coordinate.  The Agreement that had entered into  effect on 15 March 2001, had been an important 
trade policy instrument for El Salvador from two persp ectives:  first, it was the first agreement of this 
nature with a country outside the Central American region, and second, it formed part of the national 
strategy to take advantage of th e benefits from international trade.   The Agreement had also taken 
account of the "Central America Integration and De velopment Project", which aimed to provide high 
level political impetus to improve cooperation, de velopment and integration in the region.  One 
important aspect of the Agreement was that its re gulatory structure had been negotiated between all 
the Parties, whereas the tariff liberalization was applied between Mexico and each of the countries of the Northern Triangle.  Having taken into account the development status of the Parties and the 
characteristics of their economies, the Agreemen t included some flexibilities for the Parties.  
Although trade with Mexico had traditionally been in favour of Mexico, Salvadorian exports to the 
Mexican market in 2008 had increased by 96% co mpared to the first year of the Agreement's 
implementation.  Of these, more than 55% were tex tiles and apparel, plastics, and prepared foodstuffs. 
El Salvador believed that there was a high level of complementarity between the two economies as 
65% of imports from Mexico constituted raw ma terials, intermediate  goods, and capital goods, 
whereas 35% of Salvadorian exports  were for final consumption.  
5. The Agreement was considered by the Parties to be compatible with GATT Article XXIV and 
GATS Article V.  For trade in goods, under the tariff reduction programme (TRP) only 3.7% and 
4.5% of El Salvador and Mexico's tariff lines (at the HS 8-digit level) had been excluded, 
respectively, representing less than 3.8% of Mexican imports from El Salvador and 1% of Salvadoran 
imports from Mexico.  The Parties had also committ ed their trade in goods under a predictable legal 
framework, including provisions on rules of orig in, technical barriers to trade, sanitary and 
phyto-sanitary measures, customs administration for the management of origin, safeguard measures, 
and unfair trade practices.  Liberalization of trade in services had been carried out on the basis of 
national and MFN treatment and local presence.  The Agreement adopted a negative list approach 
ensuring a high level of transparency since the An nexes listed reservations by the Parties.  The 
Agreement had made El Salvador an attractive de stination for Mexican fore ign direct investment 
(FDI) and Mexico had become the third largest source of FDI in El Salvador.  Prior to the Agreement, 
Mexican FDI in El Salvador had been US$66. 7 million and had increased to US$719.4 million in 
2008.  The sectors concerned were agro-industries, call centres, manufactures an d other areas of trade 
in general.  El Salvador confirmed its commitmen t to the multilateral trading system and considered 
that these types of agreements based on WTO rules promoted the economic growth and efficiency of 
Members in trade liberalization and their integr ation into the multilateral trading system.   
6. The representative of Guatemala
 expressed thanks for the opportunity to present the 
Agreement.  In particular, he thanked the WTO Secr etariat for the technical support in the preparation 
of the Factual Presentation and the delegation in Gene va for its work.  The Parties to the Agreement 
were among the founding members of the GATT and, s ubsequently, of the WTO;  this demonstrated 
their strong belief in the fair and transparent multila teral trading system.  The Parties recognized that 
RTAs played an important role in promoting trade liberalization and in fostering economic 
development, and that was why they also stressed  the need for harmony between the multilateral and  WT/REG212/M/1  
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  regional integration processes.  Guided by these prin ciples, the Parties had liberalized their trade 
under the free trade agreement's framework.   
7. The Agreement had entered into force in 2001 with the objectives of developing and 
strengthening further trade and ec onomic relations between the Par ties, as well as facilitating and 
promoting their participation at the multilateral level.   It encompassed substantial levels of trade in 
agricultural and industrial products.  Guatemala was due to finalize its liberalization by 2012, and 
Mexico by 2010.  As a result of the Agreement, Mexico had become Guatemala's second largest trading partner;  the value of bilateral trad e had increased from US$632 million in 2001 when the 
Agreement had entered into force to US$1.92 bi llion in 2008.  Under preferential treatment, 
Guatemala's exports had increased from US$79 milli on in 2001 to US$509.5 million in 2008.  After 
the full implementation of the Agreement, Mexico would enjoy duty-free treatment for 95.5% of all 
tariff lines, of which 83.8% for agricultural produc ts and 97.7% for non-agricultural products.  In 
return, Guatemala would benefit from duty-free treatme nt for 97.5% of all tariff lines, of which 84.5% 
for agricultural products and 98.8% for non-agricult ural products.  According to Guatemala's trade 
statistics for 2008, 19 of the top-25 Guatemalan e xports to Mexico enjoyed duty-free treatment under 
the Agreement.  In particular, exports of agro-i ndustrial and industrial pr oducts had benefited from 
significant tariff concessions.  These were: stones and precious and semi precious metals amounting to US$127.1 million (25%);  fats and oils amoun ting to US$104 million (20%);  natural leather 
(rubber) amounting to US$68.4 million;  textiles amounting to US$35.1 million;  and shrimps and 
prawns amounting to US$25.6 million.   Other exports were: alcoholic beverages and vinegars;  plastic 
materials and products thereof;  processed produc ts based on cereals;  processed meat, fish and 
crustacean products;  and thread.  The Agreemen t also offered opportunities for Guatemala to 
diversify its traditional exports to Mexico into new sectors such as:  mineral products, footwear, 
textiles and apparel.  The rules of origin under the Agreement were liberal, simple and flexible and the 
Parties believed that rules of origin only with such characteristics could help trade and development.  
The Agreement allowed bilateral cumulation and al so diagonal cumulation for textiles products and 
confectionary.  In addition, the Agreement en compassed trade in services and trade facilitation 
measures, and had substantial coverage of sectors, volume of trade and modes of supply. 
8. The representative of Honduras
 observed that the Agreement had established three different 
free trade areas in c onformity with Article XXIV of GATT 1994 by providing for a common 
regulatory framework and specific annexes which contained provisions that had been negotiated 
bilaterally for each of the free trade areas.  As a result, each annex contained its own programme for 
tariffs elimination.  Similarly, in trade in services there was a common regulatory framework, in conformity with Article V.7 of the GATS, accompanied by specific individual lists of reservations and exceptions both for services and investment.  Honduras had applied the Agreement since 1 June 
2001, after the completion of a lengthy process of negotiations in the framework of the "Joint 
Presidential Declaration of Tuxtla II".  Under the Agreement, the following objectives had been 
pursued: eliminating barriers to trade and stimul ating investment;  achieving a free trade area, 
providing for new trading opportunities for presen t and potential goods and services exports; and 
promoting and developing new investments thr ough a mechanism to prevent unilateral and 
discretionary measures.   
9. Developments over the last eight years since th e entry into force of the Agreement had been 
satisfactory and had produced quantifiable results:  trade flows had increased, tariff barriers had been 
eliminated, and trade in goods and services had been  facilitated.  In addition, the immediate and 
concrete benefits of the Agreement had not only le d to an increase in trade flows and investment, but 
had also brought new and clear rules to avoid trade distortions, as well as mechanisms and procedures 
to implement the Agreement.  The Agreement was one  of the first free trade agreements concluded by 
Honduras and represented an important step forward in Honduras's trade history, and served as a WT/REG212/M/1  
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  platform for future agreements.  Honduras had strengthened national institutions, as well as several 
technical committees responsible for the administ ration of the Agreement.  The Administrative 
Commission had met several times to evaluate the functioning of the Agreement and to review 
matters concerning market access to include new produc ts for the further tariff elimination.  It had 
also revised commitments on services and san itary measures and highlighted the positive 
developments in bilateral trade relations.  The Pa rties had agreed to give greater impetus to the 
Agreement and had committed themse lves to taking steps to overcom e differences in growth and 
trade relations.  The Agreement had resulted in an increase in Honduras’s total exports by more than 
100% in the period 2000-2007 which were mainly concentrated on fats and oils, textiles, and 
machinery.  Mexico’s total imports had also increa sed by 258% in the same period and were mainly 
chemical products, machinery, and base metals.  Th e TRP was advanced in so far as the reduction of 
tariffs was concerned, since nearly all tariffs ha d been liberalized.  Honduras's tariff elimination 
would be completed by 2012, and in 2010 for Mexico.     
10. The representative of Mexico
 was pleased to present the Agre ement to the Committee.  She 
thanked the WTO Secretariat for technical support in  the preparation for the Factual Presentation.  
One of the main objectives of Mexico’s trade polic y was to bring countries of Latin America and the 
Caribbean together in various areas through increased regional trade integration.  In particular with 
Central American countries, Mexico had negotiated regional integration trade agreements, such as the 
Agreement under the current consideration.  The Agreement had entered into force on 15 March 2001 
for all the Parties except Honduras, which had impl emented it on 1 June 2001.  The Agreement had 
been mandated by the "Dialogue and Consultation Mech anism of Tuxtla", which had started in 1991.  
Together with the agreements with Costa Ri ca and Nicaragua, the Agreement constituted an 
additional step towards a free trade area between Mexi co and Central America.  It had also resulted in 
progress in Mexico's political strategy for interna tional trade negotiations; Mexico’s objectives were 
to expand, diversify and improve market access for its exports, mostly in Central America.  The 
Agreement, in addition to having facilitated trade in industrial and agricultural products among the 
Parties through tariff elimination, had provided for regulatory provisions on trade in goods and 
services.  Tariff elimination was to be completed by all Parties by 2012;  as a result, nearly 90% of products would enjoy duty-free access.  The list of  products excluded from liberalization by all the 
Parties included beef, meat and poultry products, ham,  milk, tomatoes, coffee, ice creams, water, and 
cigarillos.   
11. Upon the entry into force of the Agreement, Mexico's trade with its Central American 
partners had significantly increased by 186%.  In 20 08, total trade between Mexico and the Northern 
Triangle countries was valued at US$3,477 million, of which US$2,620 million represented Mexican exports to the region.  Central America’s expor ts to Mexico were valued at US$827 million.  
Guatemala was Mexico’s main trading partner in the region, representing its 15
th largest export market 
and 37th largest source of imports.  El Salvador was Mexico’s 22nd largest export market and 76th 
largest source of imports;  and Honduras was its 30th largest export market and 53rd largest source of 
imports.  The accumulated investments of Centra l American countries in Mexico was valued at 
US$31.7 million in March 2009 representing 1.6% of th e total FDI by Latin American countries and 
the Caribbean.  The  investments were accounted fo r by 211 companies from the Parties mainly in 
trade, manufactures and services.  Mexico’s inv estments in the Northern Triangle countries was 
estimated at US$3,735 million in June 2009, equivalent to 7.9% of its total investments in the region.  
In particular, Mexico’s FDI to Guatemala amounted  to US$2,200 million and was by companies such 
as TELMEX, America Movil, Grupo Bimbo, MASECA, TV  Azteca, Tropigas, and Jumex.  Its FDI to 
El Salvador amounted to US$1,016 million and w as by America Movil, Grupo Bimbo, MASECA, 
TV Azteca, Tropigas and Jumex.  Its FDI to H onduras was valued at US$509 million and was by 
TELMEX, Cemento APASCO, Sabritas, Grupo Electra,  and Grupo Bimbo, among others.  Under the 
Agreement, trade and investment flows among the Parties had rapidly and significantly increased.   WT/REG212/M/1  
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  The enterprises of El Salvador, Guatemala a nd Honduras had gained preferential access to the 
Mexican market with approximately 107 million pot ential customers.  In return, Mexican producers 
had gained preferential access to a market of 26 million persons.  The Agreement had promoted the 
creation of strategic associations between the comp anies, encouraged entrepreneurship by domestic 
producers, fostered the competitiveness of work ers, and had improved the quality of domestic 
products.  The Agreement was cons idered modern, ambitious, and complete and would create new 
and better opportunities for export growth and improve the availability of goods and services for 
national industries.  It also had attracted new inv estment and had created strategic alliances between 
companies of the Parties, thereby promoting economic growth and increasing productivity, 
competitiveness, industrial and regional development,  and creating new and better job opportunities. 
12. The representative of the United States
 thanked and commended the Parties for the 
information provided on the Agreement.  She reco gnized the effort taken to coordinate among the 
four Parties.  She noted that in Box III.1 of the Factual Presentation, category 15 – containing goods 
with a dutiable rate below the MFN rate- appeared to be missing.  She asked whether this category 
was covered under other tables in the Factual Presen tation, for example Table III.1 where there was a 
row for "others".  In addition, with respect to Tables III.1A (Mexico), III.1B (El Salvador), III.1C 
(Guatemala), and III.1D (Honduras) of the Fact ual Presentation, the number of lines remaining 
dutiable did not correspond to the sums of the excl uded lines and the other lines noted in Table III.1.  
There was confusion about the exact number of lines  remaining dutiable across all the tables in the 
Factual Presentation.  The representative of Mexico  asked the Secretariat fo r assistance responding to 
the question.  The Secretariat  confirmed it would examine the tables again and respond to the question 
13. The representative of the United States  announced that it would submit questions on services 
to the WTO Secretariat.  She noted that in paragr aph 106 of the Factual Presentation, pursuant to the 
terms of the Agreement, the Parties had committed to negotiate their commitments and reservations 
on financial services by June 2003;   however as of February 2009 , agreement on these elements had 
not been reached.  She asked whether they had est ablished a new timeline for the completion of such 
negotiations and whether any progress in this ar ea had been achieved since February 2009.  From 
paragraph 113 of the Factual Presentation she noted th at the Parties had committed themselves, within 
six months from the entry into force of the Agre ement, to list in Annex V any restrictive measures 
maintained at the federal and/or state level, and th at they had exchanged such lists.  As the Factual 
Presentation did not describe or reproduce the contents  of the Parties' Annex V restrictive measures, 
she asked whether the Annex had been made public ly available.  The representative of Mexico  said 
that the Parties would need more time to review and coordinate answers to any new questions.  He 
requested the United States to circulate their qu estions in writing to which Mexico would provide 
written responses.  
14. The representative of the European Communities (EC) , thanked the Parties for having 
provided the answers to their questions in wr iting and would be following up with additional 
questions.  
15. The Chairman  noted that the consideration of the go ods and services aspects of the Free Trade 
Agreement between Mexico and the Northern Triang le –El Salvador, Guatemala, and Honduras- had 
allowed the Committee to clarify a number of ques tions and oral discussion of the Agreement could 
be concluded in accordance with paragraph 11 of the Transparency Mechanism.  If any delegations 
wished to ask follow-up questions they were i nvited to forward submissions in writing to the 
Secretariat by 29 September 2009  and the Parties were asked to submit replies  in writing by no later 
than 13 October 2009.  In accordance with paragra ph 13 of the Transparency Mechanism all written 
submissions, as well as minutes of this meeting would be circulated promptly, in all WTO official 
languages, and would be made available on the WTO website. WT/REG212/M/1  
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  16. The Committee took note
 of the comments made. 
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