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Central America Prosperity Project: The Northern Triangle Is Ready for a Digital Trade Agreement with the United States

The George W. Bush Institute – SMU Economic Growth Initiative believes that these Northern Triangle countries would strongly benefit from entering into an agreement with North America that emulates the digital trade chapter of the U.S.Mexico-Canada Agreement and incorporates the kinds of regulatory cooperation and capacity building approaches embodied in other new digital economic partnership agreements.

Report by Matthew Rooney Andrea Durkin February 23, 2021

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EXECUTIVE SUMMARY

The governments of El Salvador, Guatemala, and Honduras will be renovating and modernizing their digital economy governance frameworks over the next two years. The George W. Bush Institute – SMU Economic Growth Initiative believes that these Northern Triangle countries would strongly benefit from entering into an agreement with North America that emulates the digital trade chapter of the U.S.-Mexico-Canada Agreement and incorporates the kinds of regulatory cooperation and capacity building approaches embodied in other new digital economic partnership agreements.

The Bush Institute – SMU Economic Growth Initiative tested this concept with Central American partners by conducting a negotiation simulation toward a U.S. digital trade memorandum of understanding with the Northern Triangle. The results we describe in this report show that these countries are ready and willing:

  • The direction of laws and regulations under development in all three countries is broadly in line with the core digital trade provisions in the most recently concluded agreements, including USMCA, the U.S.-Japan Digital Trade Agreement, and the Digital Economy Partnership Agreement.
  • Northern Triangle countries seek to achieve interoperability through compatible technical and regulatory standards.
  • The countries have identified specific areas where trade capacity building and regulatory cooperation under a digital trade agreement would provide critical support to current domestic policy and legal initiatives.