El Salvador’s Minister of Economy said there is interest from the South American bloc. There is progress in the terms of reference for negotiating.
El Salvador’s Ministry of Economy (MINEC) has on its wish list to begin negotiations on a trade agreement with the countries of the Common Market of the South (MERCOSUR), which together is the fifth largest economy in the world.
The minister of the branch, María Luisa Hayem, confirmed the interest of the parties a few weeks ago.
“MERCOSUR has been quite interested in being able to negotiate a free trade agreement with El Salvador,” Hayem said in September during a radio interview.
MINEC has said that it has brought positions closer to “achieving the terms of reference for the negotiation of a trade agreement with the MERCOSUR countries,” according to its most recent report of work, with a 50 per cent advance to July 2024.
The limit set for starting this negotiation is May 2025, according to this document. The country is also interested in signing a trade agreement with Belize and signing a free trade agreement (FTA) with China.
MERCOSUR is a process of integration promoted by Argentina, Brazil, Paraguay and Uruguay, which was then joined by Venezuela and Bolivia, which is in the process of accession. However, Venezuela is currently suspended.
The objective of this union of countries is to promote a common space that generates trade and investment opportunities through the competitive integration of national economies into the international market, according to its official website.
MERCOSUR has signed trade, political or cooperation agreements with various countries and agencies.
In 2023, MERCOSUR trade was $668,731 million outside this region; within MERCOSUR, trade recorded $47,411 million.
The main products exported by MERCOSUR are oil, soybeans, corn, sugar and iron ore; and the destinations for which these products are sent are China, the European Union, the United States, Chile and Mexico.
The other negotiations
“We are looking to open new markets, we are open negotiations with Belize, an interesting destination,” Hayem said on this other possible agreement.
In August 2023, MINEC signed the general framework for negotiations on a Partial Scope Agreement with Belize.
“We hope that this free trade agreement will be able to open the way for this export of agricultural goods to our country, and thus diversify the origin of where agricultural products come to our country,” the official added.
There is also interest in an FTA with Peru, which was evident last August, during the visit of the foreign trade minister of that country to El Salvador.
“I am pleased to announce that we are pushing the negotiations on a free trade agreement between Peru and El Salvador,” said Peru’s Minister of Foreign Trade and Tourism, Elizabeth Galdo Marín, during a microfinance summit.
The negotiation of the FTA with China is another of the commercial fringes opened by MINEC.
The first round of negotiations was held between 26 and 28 August in Beijing, the capital of the Asian country, according to the Chinese Ministry of Commerce.
“We conducted discussions on the overall objective of the negotiations, as well as institutional arrangements and other more specific aspects related to trade in goods and services, investment, achieving positive results,” the entity said in a statement.
MINEC, for its part, published a thread on social network X in which it cited some of the areas under negotiation: protection of intellectual property, access and distribution of Salvadoran products in the Chinese market, trade facilitation, digital economy for the promotion of e-commerce, recognition and support for SMEs, cooperation for the strengthening of economic capacities, among others.
On the opportunities for El Salvador with this new FTA, economist Ricardo Monge commented that a broad trade relationship with this power would be beneficial for many economic sectors of the country: not only for exporters, but also for net importers of products.
This article has been translated after first appearing in La Prensa Grafica