One significant way Central American countries have worked to improve their economies is through trade agreements, particularly through the Central America Free Trade Agreement (CAFTA), which includes the United States and several Central American nations (Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua). This agreement, implemented in 2006, aimed to reduce tariffs and trade barriers, thereby facilitating increased trade and investment among the member countries.
CAFTA-DR (CAFTA plus the Dominican Republic) has helped the region by promoting exports, attracting foreign investment, and enhancing economic growth. The agreement covers a wide range of products and services, allowing for duty-free access to the U.S. market for many goods produced in Central America. Additionally, it includes provisions for intellectual property protection, labor rights, and environmental standards, fostering a more stable and favorable environment for economic development.
Overall, such trade agreements have allowed Central American countries to integrate more closely with the global economy, diversify their exports, and boost their economic performance.
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