The Central American Common Market includes all the countries on the isthmus, with the exception of Panama, and consolidates its free trade area and common external tariff. At the same time, Guatemala and El Salvador are making strides in the establishment of a customs union, and Guatemala, El Salvador and Nicaragua are engaging in a speedy process of integration through the tri-national pact. Central America also has bilateral and multilateral trade agreements with Colombia, Venezuela, Mexico and the Dominican Republic. They have a Free Trade Scheme among themselves, whose objectives are limited mainly to the area of trade. There are some things that Governments can do, and there are other things that only the Private Sector can do.
Governments can reduce the barriers to the free flow of goods, services and capital.
This process is already well advanced through the network of Bilateral and Multilateral FTAs at the subregional level. Within the ACS framework, we propose to complement this with a Preferential Tariff that embraces all or most of the States in the Caribbean Basin. Thus, a precedent has been set for the larger member states of the ACS to recognise these principles, and for the latter to be used in other spheres. The CPT thus has a two-fold function. First, it is a means of stimulating and facilitating trade within the Greater Caribbean.