On October 1, the Harper government announced that the Canada-Honduras Free Trade Agreement (CHFTA) has officially been entered into force. The CHFTA is the result of extensive trade negotiations first launched in 2001 and, since 2007, has been a key foreign policy objective as part of the government’s increased political and economic engagement in the Americas.
According to the official press release, “The historic free trade agreement... will create enhanced market access opportunities through tariff elimination” noting that it “includes provisions on market access for goods, services, investment and government procurement. Almost 98 percent of each country’s tariff lines will ultimately be duty-free once the agreement is fully implemented.”
A bulletin issued by Foreign Affairs, Trade and Development Canada states that the trade deal “will benefit Canadian businesses and workers in regions across the country and in many sectors of the Canadian economy, including agriculture, professional services, value added food processing and manufacturing, as well as commodity- and resource-based industries.”
Canada’s two-way merchandise trade with Honduras as of 2013 stands at $278.7 million with $43 million of that being exports, the vast majority consisting of machinery and chemical products. While historically dependent on the export of bananas and coffee, Honduras has diversified its export base in recent years to include apparel and automotive parts assembly.
The troubled country of 8.5 million is one of the poorest in Latin America and has the unfortunate distinction of having world’s highest murder rate. Honduras also scores quite badly in terms of both corruption and economic freedom, ranking well below the world index on such matters and remains subject to a 2013 travel warning by the U.S. State Department.
Additional information regarding the Canada Border Service Agency’s implementation of the CHFTA can be found here.