Economy, Foreign Trade
SIECA, Association of Caribbean States, Central American Common Market, CACM, Salvadorans
El Salvador has been working to diversify its economy, which depends heavily on exports, and to increase nontraditional agricultural exports, but it still imports goods worth more than twice what it exports. This serious trade deficit remains a weak point in its economy.
Salvadoran exports totaled $1,342 million in 2000, while imports totaled $3.8 billion. These figures were up from 1993 exports of $731.7 million and imports of $1.9 billion. Principal exports were coffee, sugar, and frozen shrimp, sold primarily in the United States, Guatemala, Costa Rica, Honduras, and Germany. Nearly half of El Salvador’s exports now go to the nations of the Central American Common Market (CACM). El Salvador’s imports consist mainly of petroleum and other raw materials, consumer goods, and capital goods from the United States, Guatemala, Mexico, Japan, Venezuela, and Germany.
El Salvador’s trade deficit was partially offset by substantial amounts of economic assistance and credit from the United States and other Western countries and by about $800 million in payments sent from Salvadorans living abroad to their families. El Salvador had an external debt of $2.2 billion at the end of 1994, equal to about one-fifth of its GDP.
El Salvador is a member of the World Trade Organization (WTO) and is participating in talks with the United States, Canada, and Mexico on creating a free-trade association in the Western Hemisphere. El Salvador was a founding member of the Central American Common Market in 1960 and in the 1990s has been a leader in rebuilding the Central American Economic Integration Movement (SIECA). In 1995 El Salvador joined in the formation of the Association of Caribbean States (ACS), which works to create a free-trade zone among member countries in the region.
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