GENEVA — Trading partners including the U.S. lauded the open trade regime of Honduras in a World Trade Organization forum, but also urged the Central American nation to diversify its export mix, currently heavily dependent on coffee, bananas and apparel products from export processing zones.
“Honduras has continued on a path toward integration into the global economy,” Michael Punke, deputy U.S. Trade Representative, told a two-day WTO review session of Honduras’ trade regime that ended Wednesday.
“The United States and Honduras continue to enjoy a strong trade and economic relationship,” Punke said. “The United States is Honduras’ leading partner in both exports and imports. Our bilateral trade in goods was $10 billion in total in 2015.”
Alluding to the Central America Free Trade Agreement that includes Honduras, Punke noted that regional and bilateral economic integration and preferential trade agreements “have been increasingly important elements of Honduran trade liberalization.”
Exports of goods processed in duty-free and tax-free export processing zones, or maquilas, last year totaled $2 billion and accounted overall for nearly half of Honduras’ total goods exports of $4.3 billion, according to a report by the WTO secretariat used as the reference document for the review.
The main maquila manufacturing exports included made-up apparel articles (63.5 percent of the total) and knitted fabrics (12.5 percent.). However, Honduran exporters of apparel, trade economists said, are facing stiff competition from Asian, notably Vietnam, in the U.S. market.
WTO analysts noted that fabrics have accounted for more than 70 percent of imports of inputs for maquila processing, with the U.S. the principal supplier.