WORLD TRADE  
ORGANIZATION  WT/TPR/M/234 
22 October 2010 
 (10-5498) 
Trade Policy Review Body 
20 and 22 September 2010  
 
 
 
TRADE POLICY REVIEW 
 
HONDURAS 
 
Minutes of Meeting  
 
Chairperson:  H.E. Mr Bozkurt Aran (Turkey) 
 
   Page 
 
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 3 
II. OPENING STATEMENT BY THE REPRESENTATIVE OF HONDURAS 4 
III. STATEMENT BY THE DISCUSSANT 7 
IV. STATEMENTS BY MEMBERS 10 V. REPLIES BY THE REPRESENTATI VE OF HONDURAS AND ADDITIONAL 
COMMENTS 26 
VI. CONCLUDING REMARKS BY THE CHAIRPERSON 32 
 
 
Note:   Advance written questions by WTO Member s and the replies provided by the Government of 
Honduras are reproduced in document WT/TPR/M/ 234/Add.1 and will be available online at 
http://www.wto.org/english/tr atop_e/tpr_e/tp_rep_e.htm. WT/TPR/M/234 
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  I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 
1. The second Trade Policy Review of Honduras was held on 20 and 22 September 2010.  The 
Chairperson, H.E. Mr Bozkurt Aran (Turkey) , welcomed the delegation of Honduras, led by 
H.E. Mr Melvin Redondo, Chief of Negotiations in  the Ministry of Industry and Trade, and the 
discussant, H.E. Mr Javier Garrigues Flórez (Spain). 
2. The Chairperson recalled the purpose of the Tr ade Policy Reviews and the main procedures 
of the meeting.  The report by the Governme nt of Honduras was contained in document 
WT/TPR/G/234 and that of the WTO Secretariat in document WT/TPR/S/234. 
3. Questions by the following delegations had been  submitted in writing at least two weeks in 
advance and had been transmitted to the delegation of Honduras:  El Salvador, Guatemala, India, 
Mexico, the United States, Canada, Chile, Costa Ri ca, Turkey, the Republic of Korea, Japan, the 
European Union, Peru and Colombia.  The Domi nican Republic had submitted questions in writing 
after the two-week deadline. 
4. The Chairperson said that he had considered the Reports prepared for the meeting by 
Honduras and the Secretariat, both of which indicated  that, since its first Trade Policy Review in 
2003, Honduras had posted positive ec onomic results, with real GDP growth averaging 4.5 per cent 
between 2003 and 2009.  Neverthele ss, in 2009, the macroeconomic s ituation had deteriorated with 
the real GDP growth rate estimated to have dec lined by 2.1 per cent, mainly owing to the global 
economic crisis and Honduras's difficult political situation.  Moreover, Honduras still faced key 
problems, notably widespread poverty.  He said that  he would be interested in learning more about 
how Honduras planned to continue its structural re forms so as to strengthen its resilience to shocks, 
reduce poverty and achieve social progress. 
5. Both Reports also made clear Honduras's str ong commitment to the WTO, including the Doha 
Development Agenda (DDA).  During the period under review, Honduras had further reformed its 
trade regime in areas such as customs, SPS and TBT, competition po licy and government 
procurement.  Nonetheless, the orientation of Ho nduras's trade policies was largely driven by its 
participation in the Central American Common Market  (CACM), with an increasing part of its trade 
taking place under preferential regimes, including the Dominican Republic-Central America-United States Free Trade Agreemen t (DR-CAFTA).  In addition, an FTA between 
Central America and the European Un ion had recently been concluded. 
6. Finally, he emphasized that "Aid for Trade" was a main feature of Honduras's TPR (indeed, 
an annex in Chapter 2 was devoted to the subject) and underlined the need for donors to continue to 
provide such aid and other assistance, notwithstandi ng their current difficult fiscal circumstances. WT/TPR/M/234 
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  II. OPENING STATEMENT BY THE RE PRESENTATIVE OF HONDURAS 
7. The representative of Honduras said that Honduras had replied to the questions posed and its 
replies were available in the room.  Nevertheless, as some of the questions had only been received by 
the competent institutions at a late stage, when th ey were replying to questions already raised by 
Members, those answers would be submitted to th e second session.  Honduras had also noted with 
interest some questions put by Members concerning its experience in implementing its preferential 
trade agreements and on specific topics being discussed  in the agreements' joint administrative bodies.  
Those questions had been addressed and replies give n in a spirit of transparency on the understanding 
that the bodies concerned could provide further details. 
8. For Honduras, the second Review of its trade policy provided an opportunity to describe the 
progress made in the conduct and performance of its economic and social policies since the first 
Review in 2003, and to highlight Honduras's commitment, within a long-term policy framework, to raising living standards for all Hondurans.  Th e second Review was taking place at a particular 
juncture when Honduras was facing several challenges, both social and economic, that had exacerbated the impact of the global economic and fi nancial crisis, natural disasters, and the excessive 
rise in international prices for food and petroleum-based fuel. 
9. Notwithstanding the foregoing, Honduras's re cent macroeconomic performance had been 
positive:  the average annual rate of real GDP gr owth had been 4.5 per cent between 2003 and 2009, 
higher than the 3.2 per cent recorded over the peri od 1992-2001;  the average annual rate of inflation 
had been kept to one digit, 7 per cent for the pe riod 2003-2009;  the fiscal deficit had been brought 
under control and had fallen from 5 per cent of GDP in 2003 to 3 per cent in 2009;  and the total 
external debt balance had shown a noticeable decrease, from 71 per cent of GDP to 23 per cent in 
2009.  Such a performance was attributable to th e well-regulated implementation of economic policies 
with clear objectives for controlling inflation, ex change stability and putting government finance in 
order. 
10. As far as the production sector was concerned, total exports (including goods for processing) 
had risen by just over 38 per cent between 2003 and 2009 and flows of foreign direct investment 
(FDI) increased from US$391 million to US$926 million in 2007, subsequently falling to 
US$484 million because of the contraction in investment caused by the slowdown in the global economy in 2009.  In relative terms, the balance of FDI in Honduras rose from 19.4 per cent of GDP 
in 2000 to 36.2 per cent in 2008. 
11. In the area of trade, Honduras had an open foreign trade regime, with an average 
most-favoured-nation (MFN) tariff of 6 per cent in 2010, well below the bound ceilings, as well as 
minimal use of non-tariff barriers and an absence of contingency measures. 
12. Since the first Review of its trade policy in  2003, Honduras had adopted measures to become 
more closely integrated into the international ec onomy, to promote healthy competition in markets, 
combat corruption, and modernize the economic lega l environment.  Accordingly, over the period 
between the first and second Reviews of its trade po licy, legislation on competition policy had been 
adopted to complement the economic opening promot ed since the 1990s;  a new Consumer Protection 
Law had been adopted;  the national customs regime  modernized;  the Phytosanitary Law reformed;  
intellectual property protection and management expa nded;  the legislation on the financial regime 
had been updated;  and the supply of mobile te lephony services had been opened up, with notable 
expansion of coverage, inter alia . 
13. In parallel with those important domestic policy measures, Honduras had intensified its 
participation in Central American  regional economic integration th rough trade facilitation measures, 
the adoption of technical regulations, updating of customs legislation, introduction of an  WT/TPR/M/234 
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  intra-Central American dispute settlement mechanis m, and action to establish a customs union such as 
the conclusion of the Framework Agreement Establishing the Central American Customs Union.  At the same time, preferential trade agreements had b een signed and implemented with strategic trading 
partners such as the United States, Panama, Chile , Chinese Taipei and Colombia;  the negotiations 
with the European Union on an Association Agr eement had been conclude d, negotiations with 
Canada were continuing, and nego tiations with Peru would soon comme nce, while at the same time a 
feasibility study would be undertaken with a view to initiating negotiations with the Republic of 
Korea. 
14. It was estimated that by 2012, with the implem entation of the Association Agreement with the 
European Union, some 90 per cent of Honduras's inte rnational trade would be covered by bilateral 
preferences.  It should also be emphasized that pr eferential agreements did not only contain provisions 
on trade in goods, but also covered matters such  as trade facilitation, government procurement, 
intellectual property, e-commerce, investment, trade in services, transp arency, anti-corruption 
measures, and measures to ensure proper respect  for international labour and environmental 
provisions.  There was therefore an advanced legal framework for trade that guaranteed the 
transparency and predictability of the tradi ng environment and promotion and protection of 
investment. 
15. In the multilateral trading system administered  by the WTO, since it acceded to the former 
GATT in 1994, Honduras had done its utmost to comply with its obligations under the various 
agreements that formed the basis for the multilateral trade disciplines, harmonizing its legislation with 
the substantive provisions and invoking special a nd differential treatment as a developing country. 
16. With regard to the DDA, Honduras had sponsored  several proposals and contributions that 
reflected its priority national interests in th e areas of agriculture, non-agricultural market 
access (NAMA), trade in services, in tellectual property, WTO rules, trade facilitation and dispute 
settlement.  It had also been defined and identified  as an integral part of the Small and Vulnerable 
Economies (SVEs) grouping, and had co-sponsored a ll the proposals submitted by the SVEs seeking 
effective special and differential treatment, along with other flexibilities enabling them to protect 
sensitive sectors of their economies. 
17. The foregoing showed that macroeconomic di scipline, promoting trade and attracting 
investment were key components of the long-term  economic policy implemented by Honduras since 
the first Review of its trade policy in 2003 and that  future efforts should clearly steer economic policy 
in that direction so as to overcome the problems caused by the economy's vulnerability to external 
shocks, diversify exports both in terms of produc ts and markets, improve consistency between fiscal, 
monetary and exchange policies and trade and inv estment policy, and continue to modernize the 
economic and legal environment for production.  But above all, the main challenge faced by Honduras 
was to bridge the gap in social indicators in the light of the positive performance of economic variables. 
18. As indicated in the Secretariat's Report, d espite the positive economic performance, a large 
proportion of the Honduran population was living in pove rty and there were substantial shortcomings 
in the indicators of unsatisfied basic needs. 
19. The new Government, democratically elected for the period 2010-2014 and led by the 
President, Porfirio Lobo Sosa, had for the first ti me in Honduras's contemporary history adopted a 
"Law Establishing a Country Vision and Adopting a Nation Plan for Honduras".  The Law set out the 
vision for the country up to 2038 and the Nation Plan up to 2022, defining national objectives and 
goals for the long-term designed to eradicate extr eme poverty;  implement democracy with security 
and without violence;  raise productiv ity and generate decent jobs;  modernize the State;  and ensure 
transparency, efficien cy and competitiveness. WT/TPR/M/234 
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  20. In order to achieve the proposed goals and objectives, a development planning process had 
been defined, with broad partic ipation by production sectors and civil society and on the basis of 
three complementary and consistent components, namely, the 2038 Country Vision, the 2022 Nation 
Plan, and the Government's four-year plans. 
21. The development strategy defined in the La w Establishing a Country Vision and Adopting a 
Nation Plan for Honduras was complemented by th e Poverty Reduction Strategy (2006-2015), which 
defined measures, programmes a nd concrete projects based on six main pillars:  accelerating 
economic growth;  reducing poverty in rural and urban areas;  investing in human capital;  
strengthening social protection for vulnerable groups;  and ensuring a strategy that was sustainable in 
the long term. 
22. The Government had recently completed nego tiations on a Stand-By Arrangement with the 
IMF up to March 2012, focusing on restoring m acroeconomic stability, strengthening government 
finance, renewing investors' confidence and boos ting economic recovery.  The programme aimed to 
reduce fiscal imbalances so as to make government spending more efficient and allow room for 
priority investment and spending to reduce poverty. 
23. In the policies outlined, Honduras would continue to  give priority to international trade and 
promoting, attracting and protecti ng investment as engines for economic growth.  For that purpose, it 
was currently promoting policies fo r public-private partnerships to develop infrastructure, make 
labour markets more flexible, give private initiativ e and micro and small-scale enterprises support, 
update administrative procedures, especially e xport and import formalities, by setting up a single 
window, reform the legal structure of the Ministry of Industry and Trade as the body responsible for 
applying the foreign trade regime, and increase partic ipation by production sectors and civil society in 
defining trade policy. 
24. Honduras was aware of the complexity of administering a trade regime based on preferential 
trade agreements in coexistence with multilateral disciplines and the challenges posed by improving 
Honduras's position in international trade as a tool for poverty reduction, and that was why it attached 
great importance to the Aid-for-Trade initiatives carri ed out by both multilateral and bilateral partners, 
urging them to continue and intensify the measures ta ken to improve the situation of countries such as 
Honduras, which had limited capacity to participat e in the global economy.  Honduras wished, in 
particular, to draw attention to the country's pos itive experience as a benefi ciary of the Millennium 
Challenge Account, financed by the United States, which clearly showed that Aid for Trade intended 
to facilitate economic growth as a means of re ducing poverty was the proper path to follow. 
25. In conclusion, as a founder Member of the WTO, Honduras reiterated its commitment to 
continue contributing towards the successful conc lusion of the Doha Round, whose outcome it was 
hoped would be fair and balanced.  WT/TPR/M/234 
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  III. STATEMENT BY THE DISCUSSANT (H .E. Javier Garrigues Flórez (Spain)) 
26. The discussant commenced by summarizing the most important aspects of Honduras's overall 
economic environment and its progress since the pr evious Review at the end of 2003, without 
forgetting that the present descrip tive exercise was not an end in  itself but a way of facilitating 
understanding of what remained the basic objectiv e of the Review, namely, trade and investment 
policies, together with the practical measures which composed them. 
TREND IN THE ECONOMIC ENVIRONMENT 
27. Recent trends in Honduras's economic envir onment showed positive aspects:  during the 
period under review from 2003 to 2009 the average annual rate of growth in real GDP had been 
4.5 per cent, well above the 3.2 per cent for the preceding period, the result of the positive 
performance in private consumption and inv estment and exports of goods and services. 
28. Although there had been some ups and downs ov er the period, the average annual rate of 
inflation had been 7.4 per cent, with the lowest level for the past 22 years being recorded in 2009 
(3 per cent).  It was noteworthy that the Central Bank of Honduras continued to give priority to price 
stability in its Monetary Programme, with specific inflation targets for each year. 
29. In the area of fiscal policy, the Ministry of Finance was taking measures to lower the fiscal 
deficit, which fell from 5 per cent of GDP in 2003 to 3 per cent in 2009.  Much of that achievement could be attributed to the introduction of the Economi c Programme agreed with the IMF as part of the 
Poverty Reduction Strategy Paper, in February 2004, based on a hi gher tax base, control of current 
spending, a reduction in government procurement and more efficient management of the tax regime.  
Some of the major problems facing Honduras in that  respect were the wage demands of organized 
sectors and the losses made by some State-owned en terprises, together with the decrease in total 
revenue as a result of the global economic crisis since 2009. 
30. The same downward trend could be seen in th e external debt, which fell from 71 per cent of 
GDP in 2003 to 23 per cent in 2009, largely owing to the Highly Indebted Poor Countries (HIPC) initiative and the Multilateral Debt Relief Initiative (MDRI). 
31. Honduras's satisfactory performance had neverthel ess been affected by the global economic 
crisis and the difficult internal political situati on in 2009, when GDP contracted by 2.1 per cent, 
mainly because of the downturn in exports and in the flow of remittances from abroad.  The Honduran 
economy remained fragile and vulnerable to extern al contingencies and Honduras was still one of the 
poorest countries in Latin America, inter alia , because of the structural deficiencies in infrastructure 
and education and unequal income distribution.  Moreover, it should not be forgotten that Honduras 
had suffered from natural disasters that had ha d a significant impact on its development. 
32. Turning to the economic structure, services were the leading sector, both in terms of GDP 
(53 per cent in 2009) and of jobs, employing ove r 40 per cent of the working population.  The 
agricultural sector remained large, but employed le ss than one third of the working population and 
accounted for over half of  general goods exports. 
33. Concerning foreign trade, Honduras's economy re mained highly dependent on international 
trade and its openness index was one of the highest in Central America.  Such a structural factor, in principle a positive one because it fostered compe titiveness and international integration of the 
Honduran economy, had to be qualified in two resp ects:  on the one hand, the excessive increase in 
the trade deficit, which grew fourfold between 2003 and 2008, inter alia
, as a result of exchange 
policy, and led to appreciation of the real rate of exchange and the consequent loss of competitiveness 
for exports.  And, on the other, because exports were  still not very diversified, neither in terms of WT/TPR/M/234 
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  products nor of trading partners;  in the case of  products, in 2009 55 per cent of goods exports came 
from the maquila industry, which essentially meant the textiles sector, and in the case of trading 
partners, the United States had reaffirmed its place as the main market for Honduran exports and the 
main origin of its imports, accounting for some 80 per cent of both. 
34. Such an economic environment and economic trends, generally pos itive but with the 
understandable difficulties caused by the global crisis  in recent years, made up the background to 
Honduras's trade and investment policies which were  to be examined and reviewed, and he would 
attempt to do so by means of the following summary. 
EXAMINATION AND REVIEW OF TRADE AND INVESTMENT POLICIES 
35. In recent years, Honduras's trade policy had made considerable progress in terms of 
liberalization, harmonization and elimination of tariff and non-tariff barriers, in no small part because 
of the signature of FTAs at the regional leve l.  The DR-CAFTA in particular had boosted 
intra-regional trade, but had also accentuated th e problem of the geographical concentration of 
Honduras's foreign trade referred to above.  It was to be hoped that progress in the CACM integration 
process, and especially the entry into force of the Association Agreement recently signed between the 
CACM and the EU, would enable the situation to  be stabilized and would gradually improve the 
diversification of markets and sources of supply.  The agreements with Colombia, Panama, Chinese 
Taipei and the other agreements currently be ing negotiated with CARI COM and Canada would 
provide further impetus. 
36. With regard to the multilateral aspect of trade po licy, it must first be recognized that, to the 
extent of its possibilities, Honduras was a loyal Memb er of the WTO and an active participant in all 
its activities.  It was important to emphasize that none of Honduras's trade practices had yet been the 
subject of a complaint before th e dispute settlement mechanism. 
37. Since the previous Review of Honduras's trad e policy, the following aspects in particular 
were worthy of note:  as far as tariff reducti ons were concerned, even though Honduras had a 
relatively open trade regime with minimal use of  non-tariff barriers and an absence of contingency 
measures, the average tariff of 6 per cent in 2010 remained virtually the same as that in 2003. 
38. On the other hand, as far as import formalities were concerned, there had been progress in 
harmonizing or eliminating sanitary and phytosanitary  requirements, and rules of origin and customs 
valuation had become more consistent.  The SA RAH customs administration system provided a good 
example of the progress made in regard to import form alities and he was certain that the problems that 
had occurred in the course of its introduction would be  resolved rapidly, if that had not already been 
done. 
39. In recent years, Honduras had put in place a proper competition policy, which had not 
previously existed, and had crea ted appropriate institutions for its  implementation.  That would 
undoubtedly greatly encourage the inflow of foreign investment. 
40. Nevertheless, progress had been slower in inv estment as such and the reforms needed to 
liberalize foreign investment had not been intr oduced.  There were still restrictions on direct 
investment in certain services sectors relating to the amount of the investment, the number of foreign workers on the payroll, and territorial reservations  regarding the purchase of land.  It had to be 
acknowledged, however, that the overall situation fo r imports of services had improved over the past 
few years and was more liberal than would appear from the GATS commitments. 
41. Honduras's government procurement regime gave  preference to Honduran businesses and 
goods through several measures in the Government Procurement Law.  WT/TPR/M/234 
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  42. Lastly, with regard to property, Honduras's legi slation incorporated the main elements of the 
international agreements, giving a high level of pr otection to copyright, trade marks and patents.  
There was, however, a certain lack of capacity to implement the legislation because of the scarcity of 
resources for inspection and monitoring in particular. 
CONCLUSIONS 
43. It could be concluded that Honduras had made s ubstantial progress in recent years.  Its trade 
policy complied faithfully with its WTO commitments and those in bilateral agreements with other 
countries and there could be little doubt that that woul d continue to be the case in the future, given the 
active role played by its representatives in the current Doha Round negotiations. 
44. Members had posed a wide variety of questions  in writing, to which must be added those 
raised orally at the present meeting.  He was ce rtain that Honduras would provide full and satisfactory 
replies to all the questions because,  irrespective of their level of detail, they were all important and 
relevant.  To summarize, however, on the one hand, no Member cast doubt on Honduras's compliance with its multilateral commitments, to which he had just  referred, and, on the other, in years to come 
Honduras should focus its further efforts on the following:  a stronger commitment on trade in 
services;  further liberalization of foreign investment, especially in the services sector;  progress in 
government contracting and procur ement;  and tighter control over implementation of intellectual 
property regulations. 
45. In connection with the latter point, it was his opinion that progress in all those areas would be 
greatly assisted by deepening the regional integr ation of Central American countries, which was 
undoubtedly an important prerequisite if the Associ ation Agreement with the European Union was to 
be fully effective and yield the be nefits expected for all parties. 
46. In addition, with regard to the complement ary but indispensable elements required to 
facilitate implementation of trade policy, the foll owing would also be necessary:  streamlining of 
administrative formalities in order to facilitate im port procedures and lower the cost of setting up 
foreign businesses;  stepping up the combat against co rruption, insecurity in the cities and criminality;  
and upgrading the judicial mechanisms so as to  guarantee legal security for businesses operating in 
Honduras. 
47. That was why both with regard to specific trade policy measures and to those for general 
development policy and social progress, he was certain that Honduras would not lack the support needed from the international community. WT/TPR/M/234 
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  IV. STATEMENTS BY MEMBERS 
EL SALVADOR 
48. The representative of El Salvador congratulate d the Government of Honduras on the full and 
detailed information given to WTO Members on the occasion of the second Review of its trade 
policy, an exercise in the course of which had b een noted the continuous growth since the beginning 
of the 1990s based on a free market system. 
49. The Reports submitted showed the strenuous efforts made by Honduras to maintain a 
predictable and transparent trade regime, with efficient macroeconomic management involving 
monetary policy and fiscal discipline, further ope ning up to trade and the attraction of foreign 
investment. 
50. Such predictability was confirmed by the f act that Honduras had not made any significant 
changes to its trade regime for imports since the previous Review.  Honduran customs procedures 
were still governed by the Central American Custom s Code, its regulations and the National Customs 
Law. 
51. In that regard, attention should be drawn to  the adoption of measures to modernize the 
customs through the introduction of authorized econom ic operators and the adoption of an automated 
system for the administration of customs procedures, which it was stated had made it possible not only to reduce clearance times but also to increase fiscal revenue. 
52. Moreover, despite the foregoing, it could be seen that the impact of the current international 
crisis on Honduras's economy had affected external demand, FDI, remittances  and tourism revenue, 
resulting in a decrease of 10 per cent in fiscal revenue  in real terms, as well as in income earned from 
foreign trade taxes, which had fallen by 25 per cent,  contributing towards the contraction in imports. 
53. At the bilateral level, relations betw een Honduras and El Salvador had obeyed 
two fundamental principles of Central American inte gration in order to build the region into one of 
peace, freedom, democracy and development.  In th e establishment of the Central American Customs 
Union, the two countries, like others in the Centra l American region, had made major efforts to align 
themselves, focusing on integration, inter alia , through coordination, ha rmonization and convergence 
of economic policies, in the belief that the expansion of national markets was a sine qua non  for 
boosting the development of the region. 
54. Taking into account the foregoing, the Governme nts of El Salvador and Honduras, with the 
aim of achieving efficiency and improving their economic, political and coope ration relations, were 
negotiating the establishment of the Salvadoran-H onduran Bilateral Commission, which it was hoped 
would become a bilateral forum for consultation, dialogue and reciprocal understanding in which the 
general outline of cooperation could be defined on the basis of integral approaches. 
55. In that connection, special mention should be made of the Extraordinary Summit of Heads of 
State and Government of the Central American In tegration System (SICA) to Revive the Central 
American Integration Process, held on 20 July 2010 in San Salvador. 
56. The central elements of cooperation played a st rategic role in implementing the major pillars 
such as democratic security, pr evention and mitigation of natural disasters resulting from climate 
change, social and economic inte gration, and strengthening the regional institutional fabric. 
57. Regarding market access, he noted with satisfac tion that the two countries had a trade surplus, 
which was positive for market access, with the main goods traded between them being newsprint in  WT/TPR/M/234 
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  rolls or sheets, overcoats, cloaks, similar knitted or  crocheted articles for men and boys, in cotton not 
carded or combed, malt extract, food preparations of flour, meal, starch or malt extract, milk and cream, not concentrated nor containing added suga r or other sweetening matter, essential oils, water, 
including natural or artificial mineral water and aer ated water, not containing added sugar or other 
sweetening matter nor flavoured, inter alia . 
58. At the multilateral level, El Salvador, like H onduras, recognized the need to expand Aid for 
Trade, the goal of which was to create the supply ca pacity and infrastructure needed to build on and 
benefit from the WTO Agreements. 
59. His delegation also wished to underline the ac tive role played by Honduras in the present 
negotiating round and, in particul ar, its participation in the va rious negotiating groups and in 
important initiatives such as that for SVEs. 
60. He thanked Honduras for replying to El Salv ador's question and wished to take the 
opportunity to raise some issues that had arisen in the course of the countries' trade relations, notably 
those described below. 
61. Regarding measures affecting imports, specifica lly in connection with the Law waiving the 
sales tax on products containing dome stic raw materials, El Salvador  would like to know what method 
was used to decide whether the products had used  domestic raw materials and whether the scheme 
was consistent with paragraphs 1 and 2 of Article III of the GATT. 
62. Concerning fiscal and financial incentives, El Sa lvador would be grateful if Honduras could 
indicate what sectors other than the dairy industry received the benefit of exemption from sales tax.  It would also like to know whether the exemption w as permanent or temporary and what were the 
criteria for including the beneficiary sectors. 
GUATEMALA 
63. The representative of Guatemala emphasized that relations between Honduras and Guatemala 
went beyond merely neighbourly relations.  Indeed, the two countries were united by deep cultural 
and historical ties that stemmed from their common roots.  They were also the cradle of the Mayan 
civilization. 
64. The ruins of an important Mayan city that had seen a ceremonial centre and an astronomic 
observatory emerge were to be found in Honduras, in  the department of Copán.  The city of Copán 
also had the most informative pyramid in the Am ericas, the pyramid of the hieroglyphs, with over 
2,500 hieroglyphs, which had been declared  a world heritage site by UNESCO. 
65. From that historical background came the con tinuity and close economic and social relations 
Guatemala currently had with Honduras, relations that had deepened under the Central American 
economic integration framework and were encapsulated in the aspirations of the visionary Francisco 
Morazán. 
66. He wished to share with Members the fact that  in the first half of 2010 the Guatemalan 
authorities had reported that the country's exports to Honduras had risen by 8.1 per cent.  Sales 
amounted to US$343 million and were made up in  particular of plastics, foodstuffs and 
pharmaceuticals.  Imports from Honduras had also s een a sharp increase in 2010, especially chemicals 
and food preparations. 
67. Turning to the Reports for the Trade Policy Re view, his delegation wished to underline the 
considerable efforts made by Honduras to reform  and liberalize its economic and trade regimes.  WT/TPR/M/234 
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  Particular attention was drawn to the fact that , since the previous Review, Honduras had adopted a 
number of new regulations, including legislation on competition policy and on the establishment of 
institutions for its implementation.  That was an  important initiative for the Honduran market in 
ensuring that competition was not distorted or impe ded by abuse of a dominant position or any other 
form of concentration.  It was hoped that those polic ies would lead to efficient allocation of resources 
and, as a result, boost Honduras's national welfare. 
68. He also emphasized that, since 2003, Honduras had not imposed any anti-dumping or 
countervailing measures.  Although they represented a way of protecting trade, some Members used 
such measures as disguised trade restrictions.  Consequently, the Government of Honduras was urged 
to continue implementing its le gislation and harmonizing its procedures with the WTO Agreements. 
69. Lastly, he underlined Honduras's active particip ation in all spheres at the WTO, its firm 
commitment to the multilateral trading system and its efforts to promote the liberalization of trade.  
Indeed, Honduras was one of Guatemala's loyal alli es in the battles to open up trade, as had been seen 
in the lengthy dispute regarding bananas and present ly in protection of the interests and needs of 
developing countries as part of the G-33 and the SV Es grouping.  His delegation hoped to continue 
working together with the delegation of Honduras. 
INDIA 
70. The representative of India noted that Honduras had registered a healthy growth rate of 
5.6 per cent between 2003 and 2008, which unfortuna tely came down due to the difficult internal 
political situation in 2009.  Th e new Government which had take n over on 27 January 2010 had its 
work cut out.  The issues of serious concern that w ould be attracting the attention and energy of the 
Government concerned sustainable socio-economic development, which included reducing extreme 
poverty, estimated to affect about one third of its  people, reducing wealth disparities and providing 
increased incomes for its people.  The other matters which required addressing were the high unemployment rates, continuing high incidences of violence, and calls for concerted efforts by the Government to expand economic opportunities and improve the security situation. 
71. Honduras had been described as a vibrant country, with people from various ancestries, from 
the Mayan Indians, who left the famed Copán s ite, to the Garifuna communities presently found on 
the Islands of Roatan, Cayos Cochinos, etc.  Tourism was a promising sector for creating jobs and the Government of Honduras could focus attention and pr omote investment in that area.  Visitors to 
Honduras continued to be deeply impressed by the genuine warmth of Honduran hospitality. 
72. His delegation had noted that the previous w eek the IMF Mission to Honduras had reached an 
agreement in principle to provide US$196 milli on in support of the Government's economic 
programme.  He hoped that it would become operati onal and that hundreds of people could benefit 
from it immediately. 
73. India and Honduras enjoyed friendly and cordial ties.  India-Honduras bilateral trade, though 
modest at present, was worth nearly US$50 million and encouragingly was growing continuously.  
India's exports included three-wheelers, pharmaceuticals,  chemicals, silk yarn, etc.  In recent years, 
India had extended a line of credit worth US$30 milli on, and had also established an IT Centre in the 
capital.  India also provided a few scholarships for studies and training in India to Honduran scholars as its contribution to human resource development.   His delegation hoped that Honduras would soon 
finalize a decision to open its resident Mission in Delhi, which would enable the two countries to 
deepen ties further.  WT/TPR/M/234 
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  MEXICO 
74. With regard to trends in the Honduran economy,  the representative of Mexico drew attention 
to its positive development, with the exception of 20 09 as a result of the international economic crisis, 
and linked it both to remittances from abroad and fore ign trade.  Remittances from abroad represented 
17 per cent of Honduras's GDP, while its foreign trade currently accounted for over half.  At a time 
when external demand was falling, as was aggreg ate demand in developed countries, notably the 
United States, remittances from abroad were also decreasing sharply, like Honduras's exports.  That 
had had a bearing on Honduras's situation in 2009, but the meeting was reviewing Honduras's trade policy so he considered it useful to point that out. 
75. Honduras's economy faced a number of challenges, the foremost being to combat poverty and 
extreme poverty in the country.  The Honduran G overnment was undoubtedly taking the appropriate 
measures to remedy the extremely complex situation. 
76. The discussant had mentioned the concentration of Honduras's exports on a few products, for 
example, maquila industry textiles, and some ag ricultural products such as bananas, coffee and 
seafood.  That meant that the Honduran economy was highly vulnerable, particularly as exports and 
imports were also concentrated on a few countries. 
77. Despite the immense economic and social challenges faced by Honduras, it had to be 
recognized that the Government was making efforts to  maintain an open international trading regime.  
They included in particular the action taken to fi nd new trading partners th rough regional agreements, 
together with measures to modernize the customs.  Another important measure, as highlighted in the 
Report, had been the adoption of legislation on competition and the creation of a Commission for the 
Defence and Promotion of Competition, action wh ich became even more important when one 
considered that there were high rates of concentra tion in some of its markets.  Such measures would 
undoubtedly reinforce the Honduran economy a nd make its markets more competitive. 
78. As to tariff policy, Honduras's average MFN ta riff was 6.3 per cent and its bound rate 37 per 
cent, so there was a broad margin for lowering th e bound and applied tariffs in the current round of 
negotiations, thereby enhancing predic tability for its trading partners. 
79. The agricultural sector still pl ayed a major role in Honduras's economy.  It had grown at an 
annual average rate of 2.7 per cent between 2003 and 2009, and was one of the sectors least affected 
by the crisis in 2009.  Some 30 per cent of the working population was employed in agriculture and 
the sector generated 50 per cent of foreign currenc y earned from the export of goods.  Although some 
efforts had been made to promote agricultural e xports, there was little diversification and productivity 
was low.  It was a protected sector in which the average tariff was 11.1 per cent, but with dispersion 
ranging from 0 to 164 per cent.  It was important for the Honduran Government to make efforts to 
reduce tariff dispersion and to bridge the gap between the tariffs bound and those applied. 
80. The services sector had become increasingly importa nt in the Honduran economy.  In 2009, it 
had accounted for just over half the GDP with 53 per cent.  During the Uruguay Round, Honduras had 
made commitments in only four of the 12 services se ctors.  Given that the current regime governing 
the supply of services was much more liberal than th at in force at the time of the Uruguay Round, the 
Honduran Government was urged to ensure that its final offer in the negotiating round reflected the 
progress made in its autonomous liberalization and lessened the wide gap existing between its current 
commitments and the legal framework applicable. 
81. As to bilateral relations, Mexico had an FTA  with Guatemala, El Salvador and Honduras, 
which had come into force on 15 March 2001.  Under that agreement, trade relations between Mexico 
and Honduras had become much closer, with the va lue of trade between the two countries increasing WT/TPR/M/234 
Page 14  
 
  almost fourfold since the agreement came into eff ect.  Mexico had in fact become an important 
supplier for Honduras in 2009 and was the third most  important supplier on the American continent 
after the United States and Guatemala.  Despite the negative political climate faced by the Honduran 
people in 2009, Mexico had been the second most important foreign investor after the United States. 
CANADA 
82. The representative of Canada said that Canada  and Honduras had close links that were 
becoming increasingly important in the areas of trade and investment.  After a setback in 2006, trade 
in goods between the two countries had recovered in  2008.  In fact, bilateral trade in goods had 
increased by over 35 per cent in comparison with 2007.  Bilateral trade flows had declined 
considerably in 2009 during the global financial crisis and the domestic political impasse in Honduras, 
although it was expected that trade ties would stre ngthen again in 2010.  Concluding Canada's 
long-standing FTA negotiations with Honduras woul d create new trade and investment opportunities 
for Canadians and Hondurans alike. 
83. Canada noted with satisfaction that the Hondur an Government attached great importance to 
the development of new and fair trade and invest ment policies.  Even though the global economic 
crisis had put a brake on Honduras's positive econom ic performance during the period, Canada had 
high hopes that Honduras would contin ue its gradual liberalization of trade and investment.  Canada 
considered that Honduras would thus be in a bette r position to recover more rapidly from the effects 
of the global recession and once again record economic growth that would enable jobs to be created 
and an increase in the living standards of its people. 
84. Indeed, the Report produced by the Secretaria t highlighted a number of positive developments 
related to Honduras's efforts to modernize its ec onomy.  Increased openness to foreign investment, 
diversification of its export markets, and the intent to open up the services and telecommunications sectors by the new Honduran Government were but a fe w examples.  That said, there were still many 
opportunities for further improvement.  For example,  as pointed out in the Secretariat's Report, 
despite the intent to privatize HONDUTEL since 2000, the company s till remained in the hands of the 
Government. 
85. In the area of measures affecting imports, Cana da recognized the strong efforts of Honduras 
to modernize its customs procedures.  Nevert heless, some of its prohibitions and licensing 
requirements on certain imports, including the sanita ry and phytosanitary measures which prevented 
the import of Canadian beef and ca ttle, were still a concern for Canada. 
86. Canada endorsed Honduras's desire and efforts toward promoting foreign investment in a 
sustainable manner.  In that light, it regretted that the lack of transparency and clarity in the existing 
mining law had prevented foreign mining companies,  including those of Canada, from expanding and 
developing new economic opportunities for Hondurans. 
87. Canada had worked diligently during the 2009 po litical impasse to help the Honduran people 
resolve the crisis and return to democratic and c onstitutional normalcy.  With respect to development 
assistance, Canada continued to expand its deve lopment cooperation programme in Honduras, which 
would likely exceed $20 million in 2010 in the areas of  education, health and food security.  Canada 
would also continue to encourage the Governme nt of Honduras to address the recent increase of 
security-related challenges which - if left unaddressed - might affect foreign investment and economic 
development. 
88. In conclusion, Canada would like to reiterate its support for Honduras's efforts toward market 
liberalization, a strengthened institutional envir onment, and economic diversification since the 
previous Review in 2003.  Ca nada had submitted several questions in such areas as  WT/TPR/M/234 
 Page 15 
 
 
  telecommunications services, mining law, import rest rictions and government pr ocurement.  It looked 
forward to receiving the responses from the Government of Honduras and to a comprehensive exchange of views during the Trade Policy Review process. 
CHILE 
89. The representative of Chile noted that the Secretariat's Report showed that Honduras's 
macroeconomic performance over the period 2003-2009 had been positive:  real growth of 4.5 per 
cent in the GDP and a reduction from 5 per cent to 3 per cent of GDP in the fiscal deficit in 2009, 
together with external debt that had fallen from 71 per cent at the beginning of the period to 23 per 
cent.  Nevertheless, it remained a challenge to im prove opportunities for the third of the population 
living below the poverty threshold. 
90. The Report also indicated that the GDP/internati onal trade ratio was one of the highest in the 
Central American region, reaching an annual averag e of 133 per cent between 2006 and 2008, taking 
both imports and exports.  The trade balance continue d to post a deficit, however, and there was also a 
deficit in the current account, financed to a large ex tent by foreign currency remittances and FDI.  It 
was precisely for that reason that the global ec onomic crisis had had such a strong impact on 
Honduras, causing its GDP to decline by 2.1 per cent in 2009. 
91. In October 1999, Chile and Honduras had entered into a Central American FTA with Chile.  
In November 2005, the two countries had conclude d negotiations on a Bilate ral Protocol, which had 
come into force in July 2008.  The agre ement was awaiting review by the competent 
WTO Committee, but the following were some of its salient elements. 
92. It was an agreement of broad scope under which Honduras gave immediate access to some 
92 per cent of Chile's exports and Chile did the same for around 98 per cent of products from 
Honduras.  Within a period of 12 years for Hondur as and 10 years for Chile, those initial figures 
would rise to around 100 per cent.  The agreemen t also prohibited non-ta riff measures, included 
provisions on cross-border services, and covere d government procurement, all of which were 
guaranteed according to the principles of equality, non-discrimination, transp arency and cooperation 
between the parties.  It should also be emphasize d that Honduras and Chile had agreed to eliminate 
restrictions on agricultural exports and to promote their elimination within the WTO. 
93. Trade had grown steadily since 2000.  Approximately 2,000 per cent for exports from 
Honduras to Chile, and some 50 per cent for Chilean exports to Honduras.  Although trade contracted 
in 2009 as a result of the crisis, it had since recove red and already by July 2010 growth had exceeded 
100 per cent compared to 2009. 
94. In the case of investment, in 1996 the two countries had signed an Agreement on the 
Promotion and Protection of Investment.  From  1990 to 2010, Chile's investment in Honduras 
amounted to US$4 million and went to the forestry sector and airport management. 
95. His delegation welcomed the replies given by  Honduras, which would be examined, and 
further details would be requested if needed.  Chile had two additional questions:  one concerned 
paragraph 49 of document WT/TPR/G/234, in whic h Honduras indicated that its goal in the services 
negotiations was to attract foreign investment to th e country.  In that connection, in addition to the 
negotiations at the WTO, could Honduras indicate what plans it had to promote and attract foreign investment? 
96. The second question was similar and concerned paragraph 52 of the same document relating 
to intellectual property.  Could Honduras describe what action it was planning to strengthen protection 
of intellectual property rights? WT/TPR/M/234 
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  COSTA RICA 
97. The representative of Costa Rica drew attention to the close historical and commercial ties 
linking his country and Honduras.  On 15 September 2010, the two countries, together with El Salvador, Guatemala and Nicaragua, had celebrate d 189 years of Central American independence.  
Trade within the region was of the utmost impor tance for Costa Rica.  Bilateral trade between 
Honduras and Costa Rica, in par ticular, had amounted to US$338 m illion in 2009 and had increased 
at an annual average rate of 9 per cent since 2000.  Costa Rica exported a number of products to Honduras, including food preparations, medicines, to ilet articles of paper, fuel, electric conductors, 
refrigerators, tomato sauce, tomato preparati ons, and insecticides, while Honduras was a major 
supplier of products such as cardboard boxes, ciga rettes and various articles of clothing to the 
Costa Rican market. 
98. Costa Rica welcomed the importance attached by Honduras to the multilateral trading system 
and to the Doha Round negotiations, as well as its active participation in the Central American 
regional integration efforts and in the various trade negotiations in which the two countries 
participated together.  It urged Honduras to pursue its efforts to open up markets and become 
integrated into international trade. 
99. The Secretariat's Report showed what progress Honduras had made in opening up trade and 
the improvements made to its institutional and lega l framework for international trade and foreign 
investment.  The progress made in modernizing th e customs was highlighted, together with the 
adoption of legislation on competition, and modernization of the institutions responsible for administering intellectual property law.  Costa Ri ca also welcomed the efforts made to simplify 
procedures for the formulation and application of t echnical regulations and sanitary and phytosanitary 
measures.  Costa Rica encouraged Honduras to pursue those efforts and to continue to ensure that 
such measures did not constitute barriers to trad e used to achieve purely protectionist goals.  
Furthermore, it was a matter of concern that th e Report mentioned a number of tariff lines on which 
Honduras imposed tariff rates above those bound. 
UNITED STATES 
100. The representative of the United States said that his country and Honduras enjoyed a strong 
trade and economic relationship.  Their partnership took place within the broader context of excellent 
cooperation on a variety of matters of mutual in terest, including global United Nations peacekeeping 
efforts, ongoing regional security and counter-nar cotics efforts.  Trade and economic integration 
between the United States and Honduras was an impor tant element of their bilateral relations and 
generated important benefits fo r both countries and the region.  Bilateral trade in goods was 
US$6.7 billion in 2009. 
101. For many years, the United States' trade relati onship with Honduras had been driven by the 
unilateral trade preferences that the United Stat es provided through the Caribbean Basin Initiative 
trade preferences programme.  The programme had c ontributed to economic growth and development 
in Honduras.  The bilateral relati onship had changed from one based on unilateral trade preferences to 
one based on reciprocal free trade through the DR-CAFTA, a regional FTA between the Dominican Republic, the United States, and five  Central American countries (Costa Rica, 
El Salvador, Guatemala, Honduras, and Nicaragua). 
102. Both the Secretariat's and the Government's reports indicated that Honduras was pursuing a 
strategy of trade liberalization at the multilateral, regional, and bilateral levels.  The United States 
commended Honduras on the direction of its trade li beralization strategy, as it continued to pursue 
greater integration in the global economy by opening  markets, stimulating domestic production and 
promoting national efficiency, diversification, and competitiveness.  On the multilateral front,  WT/TPR/M/234 
 Page 17 
 
 
  Honduras continued to be an important participant in  the Doha Round and in the regular work of the 
WTO.  In the Doha Round, Honduras had submitted proposals individually and with other Members, 
including on market access for agricultural and non-agricultural goods, services and fisheries, 
intellectual property, trade facilitation and dispute settlement.  The Secretariat noted Honduras's high 
priority focus on issues related to agriculture. 
103. The Secretariat's Report noted that, during the review period, Honduras had notified the WTO 
of three subsidy programmes through which it grante d tariff and tax concessions.  Honduras had not 
notified any subsidies for agricultural product exports between 2004 and 2008.  The Secretariat also advised that numerous notifications were pending at  the end of the first quarter of 2010.  The 
United States encouraged Honduras to complete its no tifications with all due speed and enquired what 
plans Honduras had to complete and submit those notifications. 
104. At the regional and bilateral levels, economic integration and preferential trade agreements 
had been increasingly important elements of Hon duran trade liberalization.  Honduras had been 
seeking to further liberalize trade through pref erential agreements with various countries.  
Significantly, Honduras and other members of the CACM  continued to take steps to deepen Central 
American economic integration, including actions  to strengthen instituti ons, harmonize regulations, 
and facilitate trade.  Honduras a nd its Central American partners had completed negotiations on an 
Association Agreement with the European Union in May, and continued negotiating FTAs with 
CARICOM and Canada.  During the review period,  Honduras also had FTAs enter into force with 
Colombia, Panama and Chinese Taipei.  Honduras also had FTAs with Chile, Mexico, and the 
Dominican Republic.  The United States supported tho se undertakings with the expectation that they 
would advance and complement the multilateral trading system. 
105. The DR-CAFTA represented a key trade liber alizing step taken by Honduras during the 
review period.  It had been signed in August 2004 and had entered into force for Honduras on 
1 April 2006.  Under the agreement, the Parties removed tariff and non-tariff barriers to trade and 
investment, which would strengthen regional trade and economic integration.   The DR-CAFTA also 
included important disciplines relating to:  custom s administration and trade facilitation, technical 
barriers to trade, government procurement, inv estment, cross-border trade in services, financial 
services, telecommunications, e-commerce, intellectual property rights, transparency, and labour and environmental protection. 
106. As noted in the Secretariat's and the Government 's reports, the period of review had been an 
active time for trade policy liberalization and ma rket opening in Honduras.  It had implemented a 
number of significant modifications to its domestic trade regime, amending its institutional and legal 
framework to reinforce the trade liberalization process.  During the review period, Honduras had 
enacted a number of new laws and regulations, both dom estically and at the leve l of Central America.  
Many of those changes had been necessitated by commitments that Honduras had undertaken in the 
DR-CAFTA and benefited the multilateral trading system as a whole. 
107. In customs administration, the Secretariat's report noted that Honduras's customs procedures 
were governed by the Central American Customs Code, its regulations a nd the National Customs 
Law.  Honduras had continued with the process of reform, adopting measures to modernize customs 
by introducing a new automated system for admi nistering customs procedures, which had reduced 
clearance times and increased revenues. 
108. Honduras's and the Secretariat's report noted that Honduras had made several amendments to 
its legal framework for intellectual property rights, changing the terms of protection and modernizing 
its institutions and procedures to streamline and stre ngthen administration and protection.  In its own 
Report, Honduras noted the need to further strengthen protection.  The United States welcomed Honduras's focus on strengthening protection. WT/TPR/M/234 
Page 18  
 
  109. The Secretariat report also recognized other notable developments in Honduras's economic 
policy regime during the period of review, including:  increasing the transparency and simplifying the formulation and application of technical regulations and sanitar y and phytosanitary measures;  
working to harmonize SPS measures at the Centra l American level;  adopting competition law and 
establishing a commission to administer it;  and modernizing govern ment procurement. 
110. While the United States applauded those positive efforts, there were, nonetheless, specific 
areas of Honduras's policy regime where action c ould lead to improved trade and investment 
opportunities and flows.  The United States had referred  to them in its questions, but wished to touch 
on some at the present meeting. 
111. As the Secretariat's Report suggested, despite  the tariff and tax concessions that Honduras 
provided under its free trade zone (FTZ) regime, the productivity of FTZ firms had been low and their 
linkages with the rest of the economy were weak .  The United States recognized Honduras's focus on 
developing its manufacturing sector and encour aging exports, however, as Honduras's own Report 
suggested, the country's economic growth would de pend on greater efficiencies and competition and 
the United States encouraged Honduras to continue developing along the path towards open market 
policies and greater integration into the global economy. 
112. In closing, the representative of the United States reiterated his country's appreciation for 
Honduras's active participation in the Doha Round negotiations, and emphasized that the 
United States continued to value its close work w ith the Honduran Government and its WTO partners 
to strengthen and build on the WTO's rules-based and cooperative foundation.  But more work was 
needed to reach a balanced and ambitious conc lusion to the Doha Round.  To achieve a Doha 
outcome that resulted in the global economic growth  necessary to spur development, all key players 
would need to make meaningful market-opening contributions.  As a dynamic economy that saw the 
benefits that trade liberalization had brought , Honduras stood to gain from new market access 
opportunities generated by the Doha Round, particularly in advanced  developing countries.  The 
United States looked forward to continuing its work with Honduras and other Members to ensure that 
those gains were realized. 
TURKEY 
113. The representative of Turkey said that Honduras was one of the Members with which Turkey 
was working closely within the G-33 and, in  that context, it appreciated the insights 
Ambassador Castillo provided as an active particip ant in the DDA negotiations on the perspectives of 
the SVEs, particularly with regard to the Doha agricultural negotiations. 
114. Bilateral relations between Tu rkey and Honduras were still in their infancy with a trade 
volume of US$10 million.  Turkey looked forward to  expanding trade and hoped that bilateral trade 
relations would increase as the world economy was on the way to full recovery. 
115. Turkey also reminded Honduras that its exporters  could benefit from Turkey's GSP scheme.  
However, for full implementation, it was still waiting for information on the competent Honduran 
authorities responsible for issuing the relevant documents. 
116. The Turkish delegation noted a nd extended its appreciation to  Honduras for its success over 
the past decade in terms of economic policy.  It had achieved solid and steady growth with sound 
macroeconomic stability over past y ears.  The fact that foreign i nvestment had increased almost 
sevenfold compared to 2000 was an indication of such positive developments and increased 
confidence in the Honduran economy.  WT/TPR/M/234 
 Page 19 
 
 
  117. Nevertheless, Honduras needed to maintain th is momentum in order to confront the 
challenges of poverty reduction and trade diversifi cation in coming years.  Foreign investment, 
particularly active involvement by medium-sized companies, might need to be encouraged more. 
118. As for trade policy, Honduras had an open and predictable trade regime with fully bound 
tariffs.  It was also commendable that all tariffs were ad valorem .  Honduras had continued to improve 
the SPS and TBT regimes, while modernizing the cust oms administration.  In that context, Turkey 
was also very pleased to hear from Honduras that th e country was resolutely determined to improve 
further the business and trade regime.  The adapta tion of competition policy was also an important 
ingredient in helping to improve the business environment. 
119. In conclusion, Turkey welcomed Honduras' s positive economic development and steady 
reform process in order to improve the business envir onment.  It also looked forward to continuing to 
work with Honduras in the DDA negotiations. 
JAPAN 
120. The representative of Japan noted that Honduras' s average real GDP growth rate from 2003 to 
2009 had been 4.5 per cent.  As a result, the GDP per capita had increased by approximately 
1.5 times, from US$1,200 to US$1,829.  However, as the Secretariat had pointed out, poverty 
remained one of the fundamental issues to address. 
121. As Honduras depended heavily on in ternational trade, it could be seen that the possibility for 
further development of the economy and improvement  of peoples' lives was highly dependent on the 
development of trade and investment. 
122. He wished to comment on the trade and invest ment policies of Honduras.  Japan appreciated 
the fact that Honduras was active in promotin g foreign investment, as seen in the law on 
public-private partnership, which had been passed by the Parliament in August 2010. 
123. The efforts to implement the regional trade agreements, including the CACM, had also 
contributed to the further integration of the Ho nduran economy into the regional and international 
economy. 
124. Honduran exports relied heavily on the maquila industry and on specific agricultural products.  
Japan noted that the Honduran Government was righ tly aware of the need for diversification, and 
reflected its concerns in the Honduras Compite and other programmes.  Japan hoped that Honduras 
would continue to diversify its trade partners, as well as its export industries. 
125. Japan had heard complaints from local business on the high rate of crime.  The Honduran 
Government was expected to take measures agains t criminality in order to establish a safer business 
environment. 
126. With regard to tariffs, Japan was concerned at the mention in the Secretariat Report of 
seven tariff lines whose applied rates were highe r than the bound rates.  Japan urged Honduras to 
revise those tariff rates to comply without delay with its own commitments. 
127. In the area of the government procurement,  Japan noted that the Honduran government 
procurement legislation contained conditions in favour of domestic enterprises and goods.  Japan 
hoped that Honduras would improve its access to public procurement by foreign investors. WT/TPR/M/234 
Page 20  
 
  128. Japan appreciated the progress made in competition policy, namely the adoption of the Law to 
Protect and Promote Competition.  It was hoped th at it would help to establish a more fair and 
competitive market in Honduras, where strong capital concentration was observed. 
EUROPEAN UNION 
129. The representative of the European Union pointed out that relations between the 
European Union and Honduras, and not least in the context of Central America, stretched back over 
30 years.  The partnership included political, economic  and social priorities, where the main focal 
sectors had integrated rural development, environm ent, institution building and economic cooperation, 
as well as political dialogue.  With regard to co mmercial relationships, the EU was Honduras's third 
largest trading partner and a major investor in the re gion.  For many years, its trade relationship with 
Honduras had been driven by the autonomous trade preferences that the EU provided through the 
GSP+ scheme.  That programme had notably cont ributed to economic growth and development in 
Honduras. 
130. The relationship had recently been significantly  upgraded and improved by the agreement on 
bananas and with the conclusion of a region-to-region  Association Agreement with Central America.  
The new partnership included an ambitious trad e pillar where the liberalization foreseen was 
completed by an important set of rules which w ould make trade easier and more predictable for 
economic operators on both sides. 
131. The economic regional dimension of the Agreem ent was of the utmost importance, for the 
circulation of goods, it was true, but also for the development of a functioning regional market in 
Central America and the positive e ffect economic integration would eventually have on the wider 
integration process in the region.  In that perspectiv e, the EU wished to take the opportunity to stress 
the importance of continuing the consolidation of regional economic integration and therefore 
encouraged Honduras to play a key role in maki ng headway in the consolidation process of the 
CACM. 
132. The EU strongly believed that the strengthening of economic ties, combined with a deepening 
of the economic integration of the region, would generate economic growth  which in turn would 
eventually have a catalytic effect on the political  stability of Honduras and the region as a whole.  
That was even truer as the Association Agreem ent concluded also contained strong cooperation 
provisions and put in place the necessary framework for improved political dialogue. 
133. The EU also continued to support trade capacity  in Honduras via its substantial Aid-for-Trade 
programmes at regional and national levels in the Ce ntral American region.  For instance, our support 
under the Aid-for-Trade initiative at Central Amer ican regional level was a project with an 
EU contribution of €23.5 million that aimed to contribute towards the deepening of regional integration in Central America and Panama in terms of SPS and TBT and enhancing access to intra 
and extra-regional markets for Central American products.  Within the framework of the Country 
Strategy Paper 2007-2013 for Honduras, the Eu ropean Commission had ear marked a total of 
€223 million as financial support to the country.  That  was part of a regional integration effort, to 
which the EU was fully committed. 
134. During 2009, the economy of Honduras had been strongly affected by the global slowdown 
and a period of severe political turmoil.  Real GDP fell by about 2 per cent and the fiscal position 
deteriorated significantly.  However, macroec onomic indicators had improved over 2010 thanks to a 
more favourable external environment.  The Secr etariat Report indicated that despite generally 
positive macroeconomic results a nd sound economic growth since the last TPR in 2003, Honduras 
continued to be fragile and rather exposed to exte rnal shocks.  It was worth noting that the country 
remained one of the poorest in Central America - wi th about one third of its population living below  WT/TPR/M/234 
 Page 21 
 
 
  the poverty threshold - which resulted in limited progress in establishing conditions for sustained 
long-term growth. 
135. It was thus clear that improving the situation mu st remain a high priority, and that Honduras 
must continue to pursue a further reduction of pove rty levels and thereby improve the lives of all 
Hondureños.  Trade policy had a role to play in th at, but the fact that trade-led growth had not 
necessarily reduced poverty showed that trade and economic growth on  their own, without 
redistributive policies and the right social policies,  had limitations.  Against that background, the EU 
would be keen to learn more from Honduras about the way in which it tried to link its trade policy measures to a poverty reduction strategy. 
136. It was noted that Honduras had implemented important reforms since its last TPR in 2003.  A 
very important change had been the adoption of legislation on competition policy and the 
establishment of institutions for its implementati on, particularly given the existence of strong 
concentration in the Honduran market.  The EU th erefore encouraged the Honduran Government to 
duly implement those regulations with a view to  stimulating fair competition in its economy and 
fostering the development of the private sector. 
137. There was also room for improvement in furthering the liberalization of certain services 
sectors.  Honduras's multilateral commitments on services were also limited and, as the Secretariat's Report noted, they were not representative of the actua l liberalization levels in the country.  The EU 
would be interested to know whether Honduras was considering increasing its commitments in services, and whether it planned to open to fore ign competition some other services sectors which 
were not yet fully liberalized. 
138. Honduras had also adopted measures to modernize its customs, including the adoption of a 
new automated system for the administration of  customs procedures, known as SARAH.  Despite 
important problems during its initia l implementation, it had been reported that the new system had 
reduced clearance times and increased government revenue .  In that regard, the EU would be grateful 
to learn more about the current implementation of  the system, and the Government's remarks on how 
the initial problems had been solved and whether it planned to undertake any further changes to 
improve it. 
139. He concluded by expressing appreciation for th e active participation in the DDA and hoping 
that Honduras would find value in the comments and recommendations made by WTO partners, and that the TPR exercise would give Honduras additi onal arguments and reasons to pursue trade reforms 
and sustainable development. 
DOMINICAN REPUBLIC 
140. The representative of the Dominican Republic  emphasized that Honduras was an important 
trading partner for the Dominican Republic, under the FTA between his country and the five Central American Republics, in force for a decade, and subsequently under the DR-CAFTA, of which the 
Dominican Republic had been part for four years t ogether with those countries and the United States.  
In that regard, his delegation noted with satisfacti on that Honduras's trade regime was open, with an 
average tariff of 6 per cent in 2010, and minimal use of non-tariff barriers, together with the absence 
of contingency measures.  It also noted with satis faction that progress had been made in simplifying 
the formulation of technical regulations and san itary and phytosanitary measures, legislation on 
competition policy had been adopted, and the governme nt procurement regime had been modernized, 
together with customs procedures.  Honduras was urged to pursue its reforms in the various sectors of 
the economy. WT/TPR/M/234 
Page 22  
 
  141. His delegation had also been pleased to read in  the Secretariat's Report that Honduras's recent 
macroeconomic performance had been positive:  the annual average rate of growth in the real GDP 
had been 4.5 per cent between 2003 and 2009, the aver age inflation rate had been 7 per cent over the 
same period and the fiscal deficit had declined fro m 5 per cent of GDP in 200 3 to 3 per cent 2009.  
Nevertheless, like other SVEs, H onduras had suffered greatly from the negative impact of the global 
financial crisis and around one th ird of its population still lived below the poverty threshold, so the 
Honduran authorities should devote special attention to that aspect. 
142. His delegation noted with concern that Honduras' s foreign trade was little diversified and that 
its leading exports came from the maquila industry,  essentially textiles, most of which were exported 
to the United States.  The Honduran authorities were encouraged to start to seek alternatives in order 
to diversify exportable supply capacity as that woul d lead to higher levels of employment, revenue 
and in general a better standard of living for Honduran citizens. 
143. It was also noted that, despite the protec tion and support programmes given by Honduras to 
the agricultural sector in view of the fact that it absorbed about one third of the working population, 
the sector was still defined by low pr oductivity and modest rates of gr owth.  In such a situation as 
well, the Honduran authorities should start to c onsider the effectiveness of the policy being 
implemented in that sector so as to improve the distribution of resources. 
144. As far as measures affecting imports were con cerned, a price band system continued to apply 
to certain grains and the tariffs imposed on sev en tariff lines were above the bound levels.  The 
Honduran authorities were therefore urged to review the situation in order to bring it into line with the 
WTO's rules. 
BARBADOS 
145. The representative of Barbados noted that, si nce its first Review in 2003, the Honduran 
Government had been taking steady and important steps to strengthen its trade policy framework, 
more recently in the context of the global economi c crisis and domestic political challenges.  While 
the Government and the Secretariat Reports presented evidence of general positive economic 
indicators for 2003-2009, with average annual real GDP growth registering 4.5 per cent, the impact of 
the global crisis, combined with internal political di fficulties, had resulted in a 2.1 per cent contraction 
in real GDP growth in 2009.  Those events ha d triggered a substantial reduction in exports and 
remittances from abroad, but the latter still acc ounted for some 17 per cent of GDP in 2009. 
146. The dependence of Honduras on international trade was noted as being among the highest in 
the Central American region, with a ratio of trad e to GDP representing an annual average of 133 per 
cent over the period 2006-2008.  It was therefore no surprise that the Government Report highlighted 
the fact that Honduran trade policy continued to  be premised on opening markets to increase its 
participation in international trade. 
147. The Honduran trade regime had been described  as relatively open.  The increasing number of 
bilateral agreements and the deepening of regional trade partnerships through the Central American 
integration process had been an important compleme nt to Honduras's particip ation in the multilateral 
trade negotiations.  Barbados also looked forwar d to enhancing its trade relations with Honduras, 
including a regional trade arrangement with CARICOM. 
148. In support of its trade liberalization efforts, Honduras was commended on the regulatory 
measures taken to simplify technical regulations  and SPS measures, as well as the legislative 
developments in competition policy and in the area of intellectual property.  Those initiatives could 
encourage greater levels of openness and transparen cy on the one hand which, by extension, would 
promote a more favourable environment for trad e, investment and development on the other.  WT/TPR/M/234 
 Page 23 
 
 
  149. Notably, while facing a number of persistent economic and social challenges, the small size 
of the Honduran economy, its open structure, lim ited resource base and susceptibility to natural 
disasters, as all the countries in the Caribbean basin, Honduras also had some inherent characteristics 
that reinforced its vulnerability and the need for special consideration within the multilateral trading 
system.  Like Honduras, Barbados recognized the value of Aid for Trade as an important 
capacity-building mechanism that needed to be pred ictable, and facilitate supply-side capacity.  The 
fragile nature of economies, as well as the present st ate of the global economy, suggested that Aid for 
Trade was more relevant than ever to  facilitate recovery from the crisis. 
150. His delegation had been working closely with that of Honduras in seeking effective solutions 
to specific trade-related needs.  Barbados appreciated the very active participation of 
Ambassador Castillo and his team within the SVE grouping and the overall Doha negotiations. 
SEPARATE CUSTOMS TERRITORY OF TAIWAN, PENGHU, KINMEN AND MATSU 
151. The representative of the Separate Customs Te rritory of Taiwan, Penghu, Kinmen and Matsu 
recognized that Honduras adopted an open trade regi me and had many competitive advantages in the 
field of global trade, such as a stabilized social environment, rich natural resources, a special 
geographical situation, an advanced transportation syst em, etc.  Even in times of global financial crisis 
and severe economic downturn, the economic and financial performance of Honduras was still 
impressive.  Especially, in 2008, its growth rate for imports and exports had remained at two-digits.  It 
could be said that the Government of Honduras w as a good example of how to keep a liberalized 
economic and trading system duri ng the global financial crisis. 
152. From the two Reports prepared by the Govern ment of Honduras and the WTO Secretariat, it 
could be seen that Honduras had tried very hard , not only designing its institutional and legal 
framework towards the objective of trade liberaliza tion, but also negotiating and implementing many 
FTAs with its partners, in order to exploit mark et opportunities.  His delegation fully shared and 
recognized the importance of the efforts that a sm all-scale trade-reliant economy must adopt.  As 
indicated in the Reports, the Governments of Hondur as, El Salvador and his Government had jointly 
signed FTAs in 2007.  The FTA between Honduras a nd his Government had come into force in 
July 2008.  Its aim was to create new opportun ities for business and employment, while strengthening 
bilateral trade, investment and technological coopera tion through the elimination of trade barriers.  It 
also represented the continuous strengthe ning of economic and trade cooperation. 
153. Furthermore, all were witness to the fact that  Honduras had actively participated in all areas 
of the DDA negotiations, and in various WTO activ ities under the leadership of Ambassador Castillo 
and his team.  The role played by Ambassador Ca stillo over the long years of the banana war was 
very impressive.  His delegation often found itsel f sharing similar views with Honduras on a number 
of key issues, including agriculture SSM and TRIPS.   In particular, having recognized the difficulty 
that the industries of SVEs were facing, it also  supported additional flexibilities for SVE Members, 
such as Honduras, in many areas of the DDA negotiations. 
COLOMBIA 
154. The representative of Colombia noted that H onduras had identified international trade as 
being one of the engines of its economy because the c ountry needed to generate more wealth in order 
to raise its population's living standards.  Honduras's membership and its commitment to the WTO and the multilateral trading system we re consistent with that goal. 
155. 
His delegation had noted with satisfaction that  Honduras had a relatively open trade regime 
and trade policies:  it made minimal use of non-tariff barriers and did not apply any contingency 
measures;  its procedures for formulating tec hnical regulations and sanitary and phytosanitary WT/TPR/M/234 
Page 24  
 
  measures had been made simpler and more transpar ent since the previous Review;  it had adopted 
measures to modernize and computerize the customs, lessening the time taken for customs clearance and increasing revenue;  it had also adopted legi slation on competition po licy and had established 
institutions for its implementation;  the terms of protection for intellectual property rights had been 
extended and the institutions responsible for admi nistering the relevant legislation had been 
modernized. 
156. At the same time, there was little diversificati on of products and tradi ng partners in Honduras 
and there was a fixed exchange rate regime.  Honduras also had policies that might affect the 
competitiveness of other Members of the Organization such as refunds for expo rters, fiscal incentives 
in free zones and tariff and non-tariff protection in the agricultural sector. 
157. Honduras was facing daunting challenges to its economic situation.  There was a trend 
towards contraction or a low rate of growth in the GDP, a continued balance of payments current 
account deficit, a higher unemployment rate and the pe rsistence of relatively high rates of inflation. 
158. Financing the balance of payments through extern al debt, foreign investment and remittances 
could be in jeopardy as the global financial and ec onomic crisis had not yet ended.  Reducing the 
debt, achieved to a large extent through a multila teral initiative, could only continue if Honduras's 
payment capacity improved. 
159. In that respect, if Honduras's trade policy continued to expose its domestic production to 
international competition and to eliminate those e xport support measures that were inconsistent with 
its WTO obligations, Honduras would have gone a long way along the path to stable economic growth 
and development. 
160. Such policies had to be accompanied by an effort to diversify and add value to the supply of 
exportable products, expand markets for them and implement monetary, exchange and fiscal policies 
aimed at long-term macroeconomic stability. 
161. As the famous Honduran José Cecilio del Vall e wisely said:  "A government which demands 
taxes with one hand should provide increased wealth with the other". 
162. Between 2006 and 2007, Colombia and Hondur as had negotiated an FTA, which had come 
into force on 27 March 2010.  In 2009, the trad e balance between the two countries had been 34 per 
cent less than in 2008, undoubtedly because of the turmoil in the intern ational economy.  At that time, 
Colombia's exports to Honduras declined by 20 per cent, while Colombia's imports from Honduras 
fell by 46 per cent.  It was satisfying to note, however , that in 2010 there had been renewed growth of 
bilateral trade and both exports and imports  had increased in comparison with 2009. 
163. During the period under review, flows of FDI between the two countries had unfortunately 
not been very important.  On the other hand, sta tistics showed that, since 2007, there had been a 
substantial increase in the number of  visitors between the two countries.   It was to be hoped that the 
entry into force of the FTA would increase trade, i nvestment and tourism between the two countries.  WT/TPR/M/234 
 Page 25 
 
 
  PANAMA 
164. The representative of Panama emphasized that the trade agreement with Honduras was of the 
utmost importance for Panama, which hoped that it w ould be able to continue participating in that 
market.  Moreover, the new Economic Integrati on Agreement between Panama and other Central 
American countries represented a positive step and strengthened the region as far as financial, 
maritime and investment service s were concerned.  Finally, Honduras was joining the future 
negotiations with Costa Rica on an agreement with  Peru.  Panama would follow the process closely 
and encouraged Honduras in its future progress.  WT/TPR/M/234 
Page 26  
 
  V. REPLIES BY THE REPRESENTATIVE OF HONDURAS AND ADDITIONAL 
COMMENTS 
165. Before responding to some of the questions raised by Members at the first session, the 
representative of Honduras first wished to state that replies had been given to most of the questions 
raised and could be found in the re levant documents already circulated .  In some instances, however, 
there was a need to provide more  complete information and further details on the issues raised by 
Members.  Bearing that in mind, he wished to gi ve the following indications and further explanations. 
166. Concerning recent macroeconomic performan ce and poverty reduction, it was hoped that, 
with the global economic recovery forecast for 2010, and the monetary and fiscal easing resulting 
from Honduras's macroeconomic discipline, ther e would be a more stable macroeconomic 
environment that would boost the growth of the H onduran economy in 2011.  It was expected that, 
with the recovery that had commenced in 2010,  economic activities would continue, leading to 
growth of 3.6 to 4.6 per cent in coming years, dr iven by the recovery in exports of non-traditional 
products in particular and an increase in consump tion.  It was also hoped to reverse the downward 
trend in the flow of international remittances, in crease FDI and official disbursements for sectoral 
projects and social programmes. 
167. Taking into account the policy defined in the "Law Establishing a Country Vision and 
Adopting a Nation Plan for Honduras", the overa ll income and expenditure budget for the 2011 
financial year gave priority to social spending, earmarking 42 per cent of the budget for expenditure 
on health and education.  The 2011 budget also put spending on a regional basis, as previously and 
extensively discussed with co mmunities and civil society. 
168. As mentioned in Honduras's opening statement,  the Government in office for the period 
2010-2014 was basing its course of action on the defi nition of a country plan founded on 11 guiding 
principles, including:  sustainable development;  democracy and governance;  poverty reduction, generating assets and equal opportunities;  educati on and culture;  health;  security;  regional 
development;  production infrastructure;  macro economic stability;  competitiveness;  and adaptation 
to and mitigation of climate change.  For that purpose, future budgets would be aligned on the 
planning required to achieve the goals and objectives defined, on the basis of a regional approach and 
giving priority to spending  on development with a well-de fined accountability mechanism. 
169. As to measures to diversify trade, Honduras w ould continue to promote preferential trade 
relations that helped to lessen dependence on a si ngle export market.  The process of diversifying 
markets had been gradual.  At the beginning of the present decade, in 2002, the concentration of 
exports with Honduras's leading trade partner had exceeded 60 per cent, wh ereas in 2009, even 
though it was acknowledged that the figure was st ill high, it had fallen to 55 per cent, and it was 
hoped that the expanded opportunities afforded by th e Association Agreement with the EU and other 
FTAs would help to diversify expor t destinations because of the new opportunities they created.  
Likewise, it was hoped that deepening of econo mic integration would raise Honduras's level of 
participation in Central American markets. 
170. Honduras would continue to promote preferential trade relations and therefore encouraged the 
conclusion of FTAs with other trade partners, as alre ady mentioned.  It believed that through regional 
trade agreements, far from contributing towards fragmentation of the multilateral system, it was 
encouraging ordered liberalization of trade and co ntributing with trading standards which in some 
cases dealt with disciplines that were being ne gotiated within the present multilateral forum. 
171. As far as diversification of products was con cerned, approximately 60 per cent of exportable 
supply was at present composed of non-traditional produc ts such as palm oil, farmed shrimps, tilapia, 
melons, water melons, and vegetables, without forg etting that, since the beginning of the 1990s, the  WT/TPR/M/234 
 Page 27 
 
 
  growth of Honduras's textiles and clothing sector had enab led it to become a player at the global level.  
In the agricultural sector, Honduras was promoting various programmes in support of productivity 
and product diversification through projects to enhance agricultural competitiveness under 
programmes such as the Technological Bond, t ogether with programmes in support of rural 
competitiveness, boosting of rural businesses and initia tives, for example, through the Directorate of 
Science and Technology, improving services to  guarantee food safety, enhancing the rural 
infrastructure and national programmes fo r development of the food industry, inter alia . 
172. Using resources from the Inter-American Development Bank, an investment and trade 
promotion programme was being drawn up that w ould improve Honduras's inte rnational position and 
included institutional reform of the entities responsible for foreign trade and investment. 
173. With regard to regional integration, in D ecember 2007, Honduras had signed the Framework 
Agreement Establishing the Central American Customs Union.  The Agreement provided for 
three stages, including the promotion of free movement of goods, trade facilitation, regulatory 
modernization and convergence, and institutional de velopment.  It was hoped that the Framework 
Agreement would enter into force rapidly, but th at had not prevented Honduras from starting work on 
deepening and establishing a customs union.  Under the same framework, work was taking place on 
half-yearly action plans approved by the Council  of Ministers for Central American Economic 
Integration (COMIECO).  The plans were intended to promote the free movement of goods and trade 
facilitation;  harmonization of the common external ta riff was continuing;  rules of origin were being 
updated and regulations were  being formulated for sectors for which none existed at present;  work 
was being undertaken on the mutual recognition of san itary registration of food stuffs and beverages, 
medicines and related products, pesticides for domestic and professional use, and sanitary and 
phytosanitary measures.  As far as customs pro cedures were concerned, the work was aimed at 
amending the International Customs Regulations for International Land Trans it and modernization of 
the systems for the electronic transmission of documents was ongoing. 
174. In addition, work was going ahead on a two-year strategic plan, to be implemented by means 
of various tools for action drawn up and approved twi ce a year by the Council of Ministers in order to 
move towards the customs union gradually and step-by-step with the intention of boosting trade in the Central American region through th e adoption of a series of practical trade facilitation measures that 
would have a positive impact on the competitiveness of production sectors. 
175. As far as the policy for attracting investment  was concerned, since 1992 Honduras had had an 
Investment Law that guaranteed national treatment fo r foreign investment and investors, giving them 
broad guarantees of protection.  The Law was curren tly being revised so as to expand and improve the 
regime for the promotion and protection of inv estment to make it more attractive to foreign 
investment. 
176. The new Law on Public-Private Partnerships , recently approved, would allow private 
participation in the implementation, development and management of public works and services or 
any other activity that could be delegated subject  to government planning, control, regulation, 
supervision and monitoring.  The aim of the Law wa s to encourage private investment in actions and 
programmes of social benefit to be carried out by  the Government, revitalize the country's economy, 
provide security for national and foreign investment, and generate jobs.  At the same time, work was 
going ahead on a national security plan and support w as being given to investment in improvements 
to the production infrastructure. 
177. 
Some Members had expressed concern regarding the new customs administration system 
(SARAH).  The system offered certain trade facilita tion advantages such as:  submission of electronic 
documents from the point of origin;  risk mana gement to allow goods to be made available WT/TPR/M/234 
Page 28  
 
  immediately payment had been made;  streamlining of procedures for public service auxiliaries;  and 
on-line banking. 
178. With SARAH, Honduras had achieved a notable reduction in the time taken for formalities 
and procedures.  For example, in July 2010, an organization independent of the customs had carried out an evaluation, following the guidelines of th e World Customs Organization, and had measured the 
time taken for clearance, finding that the average time required for customs clearance was 29.28 hours 
or 1.22 days.  In contrast, prior to the introduction of  SARAH, up to five days had been required, so 
there had been a significant reduction in the time required. 
179. The introduction of the new system had not encountered any major difficulties as far as 
technology or the training of customs personnel we re concerned, but rather the problems concerned 
outside users because they did not have the necessar y telecommunications infrastructure and were not 
acquainted with the system;  the problems had b een overcome by training users of the system in situ . 
180. Regarding future improvements to the system, it was planned to computerize the registration 
of customs declarations for free zones and the registration of customs auxiliaries, as well as to introduce amendments for electronic bids and electroni c data entry, for example, preparation of the 
manifest and courier declaration. 
181. In relation to other customs issues and custom s valuation, the meeting was informed that a 
customs broker was required for the majority of cu stoms operations with the exception of imports by 
the central Government and its agencies, municipa l authorities, imports originating in the Central 
American region covered by the Central American Single Customs Form, small packages of no commercial value, goods of no commercial value se nt through the post, goods sent through express 
courier firms and packages of a value not exceed ing US$1,000, passengers' luggage and goods other 
than luggage of a value not exceeding US$1,000, imports by legal persons represented by a special 
customs attorney, and diplomatic missions. 
182. Likewise, use of a customs broker was optional for definitive exports, temporary export with 
reimport into the same country, free zone opera tions, customs warehousing, temporary export for 
outward processing and temporary import for inward processing.  Certificates of origin were verified 
by customs officials who, based on the terms nego tiated in various trade agreements, checked the 
information that should appear on the certificate.  That was done manually as the system currently 
only required a certificate of origin when a re quest was made for a tariff preference under a 
preferential trade agreement.  Regarding the require ments for registering the import of health-related 
products, the customs only checked that the import perm it was attached if so required by the Ministry 
of Health. 
183. Honduras applied the Customs Valuation Agreemen t for customs valuation and the internal 
procedures for its implementation were set out in ci rculars giving details of the procedure to be 
followed when determining the value of goods at the time of clearance. 
184. In relation to the concerns expressed by some  Members regarding the seven tariff headings 
identified by the WTO Secretariat to which tariffs higher than those bound were applied, as explained 
in its replies, Honduras would take the action required to bring the app lied tariff rates into line with its 
WTO obligations.  With regard to products subject to licensing, Honduras had notified the WTO of the products subject to the licensing regime in  document G/LIC/N/3/HND/1 of 12 November 2007. 
185. Concerning pending notifications, on 30 June 2010, the WTO Notifications Agency had 
stated that Honduras had nine pending notifications.  Of those nine, two referr ing to the agricultural 
sector had already been submitted.  Among the notifications pending was that on "quantitative 
restrictions", which would be submitted when the Committee on Market Ac cess had defined the new  WT/TPR/M/234 
 Page 29 
 
 
  model for notification.  The remaining five notifica tions were at different stages of preparation for 
submission to the WTO. 
186. With regard to the comment by one Member on tariff dispersion and the reduction for water, 
it was important to note that the bound rate of 164 pe r cent only applied to three tariff headings, the 
result of negotiations under Article XXVIII, and the other bindings ranged from 0 to 50 per cent, with 
a long list of products bound at 35 per cent. 
187. In relation to the Doha work programme, H onduras, as part of the SVE grouping and the 
G-33, continued to strive for effective special and differential treatment, together with other 
flexibilities to enable it to protect the most sens itive sectors of its economy.  In that connection, 
bridging the gap between the bound rates and tho se applied, as well as the autonomous liberalization 
of trade in services, would depend on the progress  made in the multilateral negotiations in those 
sectors of special interest to Honduras. 
188. It should also be pointed out that in all H onduras's preferential trade agreements there had 
been a consolidation of the status quo, with the supply of services being based on a negative list 
approach.  That was the result of the positive evalua tion of the outcome of the negotiations with those 
trading partners with which Honduras had FTAs.  It  gave an element of predictability for services 
operators and at the same time attracted investme nt from those trading partners with which Honduras 
had preferential agreements. 
189. Concerning the method for formulating technical  regulations, mentioned by some Members, 
Honduras wished to explain that the procedure for formulating such regulations and the conformity 
assessment procedure was as follows:  a draft regulation was submitted in accordance with the 
Guidelines for the Drafting and Presentation of Cent ral American Technical Regulations;  review, 
examination and discussion in Central American discussion forums;  notification;  public 
consultation;  receipt of comments and response th ereto;  and, lastly, approval by COMIECO for 
publication and entry into force. 
190. Regarding criteria for inspection and risk assessment in the case of sanitary measures, as laid 
down in the Central American Regulations, Hondur as complied with the time-limits required for 
inspection visits to establishments.  Inspecti on depended on the speed with which the country 
responded to the visit for the purpose of drawing up the Final Resolution.  It should be noted that for the purpose of new inspection of origin, that di d not constitute grounds fo r suspending imports, 
provided that there was no risk warranting the imposition of an emergency measure. 
191. Furthermore, it should be emphasized that Hondur as based the analysis of potential risk of 
goods on consultations and the search for relevant info rmation.  It also requested information from the 
veterinary and phytosanitary services in the e xporting country regarding the country's internal 
organizational structure, the control of diseases or pests and hygiene measures during production.  In addition, it utilized information obtained from th e existing international regulations and assessed the 
risk of possible damage or dispersion based on information from the establishments. 
192. Also in relation to sanitary measures, Canada had asked about the admissibility of Canadian 
bovine meat.  Its questions had been answered in the document containing the replies circulated at the first session.  Canada had also expressed concern rega rding the situation of the Mining Law.  In that 
connection, the Supreme Court of Justice had ruled that certain articles of the Law were 
unconstitutional.  Accordingly, a new legal framework  was being worked out to take into account the 
rulings of the Judiciary and the comments made by ci vil society.  The new law would define the terms 
for exploiting mines in accord ance with economic development objectives and the environmental 
policies in effect. WT/TPR/M/234 
Page 30  
 
  193. El Salvador had asked about the way in whic h the sales tax was applied and its consistency 
with Article III of the GATT.  If there was any inconsistency between do mestic legislation and 
international commitments as a Member of the WTO, the General Law on Public Administration clearly provided that, inasmuch as they were inco rporated into the legal system, the commitments 
undertaken in international agreements and treaties prevailed over domestic law,  so consistency with 
the obligations was ensured 
194. El Salvador also sought information on produc ts exempt from payment of the sales tax.  
According to the Sales Tax Law and amendments th ereto, the products exempt were those contained 
in the basic basket, pharmaceuticals for veterina ry use, electricity generating machinery and 
equipment, machinery, equipment, accessories and spare parts for agricultural and livestock 
production, natural fruit juices, fertilizer, fungicides, insecticides, pesticides, live animals in general, 
frozen semen of animal origin, seeds, bulbs for plan ting, mineral concentrates and salts for animal 
feed.  In the case of the basic b asket, the logic underpinning the exemptions was, on the one hand, the 
need to ensure supplies of products to the population at affordable prices and, on the other, to make 
the agricultural sector competitive. 
195. Concerning export support programmes, because Honduras was covered by Annex VII to the 
Agreement on Subsidies and Countervailing Measures as its per capita GDP did not exceed US$1,000, it was exempt from the obligation to el iminate such programmes as long as it did not 
exceed the aforementioned threshold for three c onsecutive years in 1990 constant dollars, as 
determined in the decisions taken by the WTO. 
196. Moreover, with reference to the comments by  Chile and the United States on respect for 
intellectual property rights, it should be pointed out that the Inspectorate for the Protection of 
Intellectual Property Rights was responsible at the national level for the protection of intellectual 
property rights and carried out the requisite acts either ex officio or following a complaint;  the 
Executive Directorate of Revenue act ed in the case of counterfeit goods, in the various customs posts.  
The Regulations on Border Measures were currently be ing finalized so as to provide more security for 
goods at the various customs posts. 
197. At the administrative level, in 2009 penalti es amounting to some L 6 million had been 
imposed on several cable television operators in th e country because they had failed to comply with 
the requirements laid down by the Property In stitute for transmitting television programmes. 
198. The Inter-Institutional Commission Against Piracy  had been revived and was composed of 
the Executive Directorate of Revenue, the Property Institute, the Public Pr osecutor's Office, the 
National Police Force, the National Telecommunications Commission, the Honduran Private 
Enterprise Council, and the Mini stry of Industry and Trade.  In addition, the National 
Telecommunications Commission supervised cable tele vision operators within the country so as to 
ensure respect for copyright.  Th ere was a strategic alliance between the Property Institute and the 
Public Prosecutor's Office for reporting offences, part icularly in the case of trade marks, and between 
the Property Institute and the Executive Directorate of Revenue for the training of customs personnel 
on intellectual property rights;  furthermore, the Judiciary was given training to ensure that the 
competent judges and magistrates were fully awar e of the relevant international obligations. 
199. Turning to government procurement, althoug h the law gave Honduran businesses special 
treatment, in practice national treatment applied, either because of the provisions in FTAs or de facto.  The State Procurement and Purchasing Standards Offi ce was responsible for ensuring that every firm, 
whether Honduran or foreign, could freely take part  in bidding in Honduras provided that it met the 
terms of the invitation to tender.  WT/TPR/M/234 
 Page 31 
 
 
  200. With regard to financial services, in the docum ent containing replies circulated the previous 
Monday, Honduras had replied to the questions on the criteria for setting up branches of banks and 
insurance companies in Honduras. 
201. Some Members had asked about the exclusiv e rights given to HONDUTEL, and it should be 
emphasized that there were administrative orde rs which clearly stated that HONDUTEL, the 
State-owned telecommunications enterprise, did not have exclusive rights to the supply of telephony 
services and long-distance calls.  All the concession contracts given to mobile telephony operators 
clearly showed that, using their own means, they could freely give their users the direct possibility of making long-distance international telephone calls. 
202. As mentioned in the document containing the replies, the Government was considering 
enacting a law to strengthen HONDUTEL so as to ad apt it to new market demands and improve its 
competitive position;  the law would be supplemented by the enactment of a new telecommunications law that had been examined and w ould be consistent with various international commitments in FTAs 
and with developments in the market. 
203. Some Members had also referred to the situati on of the port services for unloading fuel in the 
Port of San Lorenzo.  He wished to point out in that connection that consideration was being given to 
relocating the pipes in front of the berth for ship s;  the unloading facilities would be moved and would 
be embedded in the quay, thereb y preventing any accidents when be rthing and the facilities would 
only be allowed at the far end of the quay.  It should also be clarified that the National Port Company did not unload fuel and that it was done directly by  the importers, which provided all the equipment, 
accessories and personnel. 
DISCUSSANT 
204. The discussant emphasized that, first of all, it wa s important to highlight the positive tone of 
the various statements made the previous Monday, showing Honduras's commitment to the 
multilateral trading system and drawing attention to  its trade liberalization regime, one that was 
relatively open with a reduced tariff, and also b earing in mind that in general no trade protection 
measures had been applied.  It was also importa nt to highlight the strenuous efforts the Honduran 
delegation was making, and had already made, th roughout the Doha Round negotiations, playing an 
active role directly but also through the SVEs grouping. 
205. Turning to the more specific comments ma de, he believed that Ambassador Redondo had 
fully replied to the various questions raised concerning the introduction of the SARAH customs 
administration system, investment-related competition policy, etc.  He had replied fully to those 
questions, including some aspects that might be consid ered more contentious such as the fact that in 
some cases the tariffs applied were higher than those bound or that some notifications required by 
WTO rules were pending. 
206. Everything had been clearly explained in Hondur as's replies and there was no need to add 
anything more to the detailed comments of Ambass ador Redondo.  What was ultimately important 
was to stress that the case of Honduras should not be  limited to the strictly trade context but should 
also include the serious problem of poverty reduction, and there the efforts made through the Law Establishing a Country Vision and Adopting a Nation Plan for Honduras should be underlined.  It was 
important to point out that some 40 per cent of th e budget for 2011 would go to education and health, 
in other words, would be directly aimed at reducing poverty. WT/TPR/M/234 
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  VI. CONCLUDING REMARKS BY THE CHAIRPERSON 
207. The Chairperson said that the second TPR of Honduras had given Members a better 
understanding of Honduras's trade policies and practices,  of their evolution since its first TPR in 2003, 
and of their outlook.  The reports by Honduras and th e Secretariat, and the responses of the delegation 
of Honduras to the questions by Members, had served as a valuable resource and had made a 
significant contribution to transpar ency.  The high quality of the Review was attributable to the 
participation of the Honduran delegation, led by H.E. Ambassador Melvin Redondo. 
208. Honduras had been praised by WTO Members for its positive economic performance over the 
period under review, with strong economic growth a nd key achievements in substantially reducing its 
inflation rate, fiscal deficit and external debt burden.  Members had encouraged Honduras towards 
further market liberalization.  They had noted that Honduras's economic performance remained highly 
vulnerable to shocks, as experienced in 2009 by the contraction in its GDP growth rate, and urged 
Honduras to continue its structural and trade refo rms so as to strengthen its resilience to shocks, 
reduce widespread poverty and achieve social pr ogress.  The reforms initiated by the Honduran 
Government, together with increased investment in infrastructure and in human capital, would help to 
further diversify the economy and increase its comp etitiveness.  Members had enquired about future 
initiatives to eliminate remaining restrictions to  foreign investment and improve its business 
environment. 
209. Members had appreciated Honduras's strong comm itment to the multilateral trading system, 
including the DDA.  Nonetheless, they had indicated  that Honduras's key goal was to consolidate the 
CACM, and that other regional a nd bilateral initiatives were an increasingly important element of 
Honduras's trade policy;  Members expected that they would complement Honduras's commitments in 
the multilateral trading system.  Members had expressed appreciation for the steps taken by Honduras recently to further streamline its trade regime in areas such as SPS and TBT, competition policy and government procurement.  Members had raised questions regarding the procedures to develop 
technical regulations and sanitary requirements, while  others had also noted that, for a handful of 
products, applied tariffs exceeded bound levels.  Honduras had indicated that that was due to a 
transposition of tariff nomenclature and that the necessary corrections would be made as soon as 
possible.  Honduras was encouraged to lower its bi ndings in the context of the DDA, as well as to 
complete its WTO notification commitments. 
210. On sectoral issues, Members had noted that the agricultural sector remained supported, 
including through relatively high tariffs and a pric e band system.  They had also asked Honduras 
about the steps to be taken to address inefficien cies in the manufacturing sector, which continued to 
benefit from incentives provided under the differe nt export promotion regimes.  Members had 
indicated that further liberalization of services might improve the efficiency of Honduras's economy and the competitiveness of its exports, especially by  reducing costs related to financial services, 
telecommunications and transport.  Members had also encouraged Honduras to increase its GATS 
commitments to reflect the applied regime, which was considerably more liberal. 
211. Members had sought clarification on a number of issues, notably:  customs procedures and 
valuation;  rules of origin;  internal taxation;  import licensing, permits and prohibitions;  contingency 
trade remedies;  free zones;  and protection of intellectual property rights. 
212. The delegation of Honduras had provided written and oral answers to the questions posed 
during the Review and had undertaken to supply re plies in writing to any outstanding issues.  The 
replies provided had made a considerable contri bution to the Review and Members had clearly 
appreciated them.  WT/TPR/M/234 
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  213. In conclusion, Members valued Honduras's effort s to improve its economic environment.  As 
a small economy that was highly dependent on forei gn trade, Honduras had a lot to gain from a free 
and open trade environment.  He encouraged  Honduras to continue improving its multilateral 
commitments, both on goods and services, with a vi ew to further improving its transparency and 
predictability, and to integrate trade policy into its overall poverty reduction strategy.  He also urged 
Members to support Honduras's reforms by providin g greater market access to its goods and services, 
as well as "Aid for Trade" and other assistance. 
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