Trade and Tariffs

The fish sector includes processed and unprocessed fish products contained in chapters 3 and 16 of the Harmonized Tariff System. Fish accounted for less than 1 percent of total Central American industrial imports from the United States in 2003, totaling a bit over $4 million. U.S. exports in the sector are lead by shrimp, mollusks, and sardines. Guatemala is the leading export market in Central American for U.S. fish, accounting for almost 50 percent of total U.S. fish exports to the region.

Central American tariffs on fish range from 0 to 15 percent, with averages of 10.1 to 9.9 percent, depending on the country.

U.S. fish imports from Central America in 2003 were about $294 million, or approximately 11
percent of total U.S. industrial imports from the region. Honduras is the leading exporter of the five countries, accounting for 42 percent of Central American exports in the sector.

The United States imposes tariffs on fish of 0 to 35 percent, with an average of 2.0 percent for the sector. The highest tariffs are applied to processed tuna. All products in the sector except processed tuna are duty-free under the Caribbean Basin Initiative (CBI) and Caribbean Basin Trade Promotion Authority (CBTPA) tariff preferences.

Tariff Elimination

Tariffs will be phased out according to four tariff elimination categories: immediate elimination, equal cuts over five years, equal cuts over 10 years, and non-equal cuts over 10 years. Duties on products in the last category will decrease by 2 percent for the first two years, by 8 percent for the next four years, and by 16 percent for the last four years.

Overall, 91 percent of U.S. fish exports to Central America will be duty-free immediately upon implementation of the agreement. Tariffs on the other 9 percent of exports will be eliminated over five years.

Under CAFTA, the United States agreed to consolidate all CBI and CBTPA tariff preferences into the final tariff elimination schedules. This means that for all fish imports from Central America except two canned tuna tariff lines will receive duty-free treatment upon implementation of the agreement. For these 2 lines, the base rate from which tariff cuts will be made will be the 2005 CBTPA preference rates. These base rates will be eliminated according to a 10-year non-linear staging schedule. Duties on products in the last category will decrease by 2 percent for the first two years, by 8 percent for the next four years, and by 16 percent for the last four years.

Non Tariff Barriers

Many U.S. exporters face consular transactions – complex paperwork requirements stipulating that documents be certified in the United States at the embassy or consulate of the Central American country that will receive the goods. Consular transactions will be eliminated immediately upon implementation of the agreement.

Dealer protection laws have led to severe consequences for U.S. exporters when they terminate a contract with a dealer or distributor in Central America. The agreement requires each Central American country to amend its laws such that U.S. products cannot be denied the right of importation due to contract disputes.