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WT/TPR/M/336 1 July 2016 (16-3556) Page WT/TPR/M/336 1 July 2016 (16-3556) Page: 1/36 Trade Policy Review Body 2 and 4 May 2016 TRADE POLICY REVIEW HONDURAS MINUTES OF THE MEETING Chairperson: Ms Irene Young (Hong Kong, China) CONTENTS 1 INTRODUCTORY REMARKS BY THE CHAIRPERSON ....................................................... 2 2 OPENING STATEMENT BY THE REPRESENTATIVE OF HONDURAS ................................. 4 3 STATEMENT BY THE DISCUSSANT ................................................................................ 9 4 STATEMENTS BY MEMBERS ........................................................................................ 12 5 REPLIES BY THE REPRESENTATIVE OF HONDURAS AND ADDITIONAL COMMENTS ..................................................................................................................... 31 6 CONCLUDING REMARKS BY THE CHAIRPERSON ......................................................... 35 Note: Advance written questions and additional questions by WTO Members, and the replies provided by Honduras are reproduced in document WT/TPR/M/336/Add.1 and will be available online at http://www.wto.org/english/tratop_e/tpr_e/tp_rep_e.htm. WT/TPR/M/336 • Honduras - 2 - 1 INTRODUCTORY REMARKS BY THE CHAIRPERSON 1.1. The third Trade Policy Review of Honduras was held on 2 and 4 May 2016. The Chairperson, Ms. Irene Young (Hong Kong, China), welcomed the delegation of Honduras headed by Mr. Melvin Redondo, Under-Secretary for Economic Integration and Foreign Trade; the rest of the delegation of Honduras; and the discussant, Dr. Shin-Yuan Lai (the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu) (hereinafter referred to as Chinese Taipei). As agreed by Members earlier, the United Nations Industrial Development Organisation was attending this meeting as observer on an ad hoc basis. 1.2. The Chairperson recalled the purpose of the Trade Policy Reviews and the main elements of the procedures for the meeting. The report by Honduras was contained in document WT/TPR/G/336 and that of the WTO Secretariat in WT/TPR/S/336. 1.3. Questions by the following delegations had been submitted in writing before the deadline and had been transmitted to the delegation of Honduras: Mexico; European Union; Australia; Canada; China; Peru; Brazil; Chinese Taipei; Guatemala; Dominican Republic; and Chile. The following delegations submitted written questions after the deadline: Colombia; United States; Ecuador; Argentina; El Salvador and Thailand. These questions had also been transmitted to the delegation of Honduras. 1.4. At the previous TPR meeting in 2010, Members had praised Honduras for its strong economic growth and achievements in reducing inflation, fiscal deficit, and external debt burden. Members had encouraged Honduras to continue its structural and trade reforms, so as to strengthen its resilience to external shocks, reduce widespread poverty, and achieve social progress. It was encouraging to see that, during this review period, Honduras' economy had been able to recover from the aftermath of the global financial crisis and the fall in demand for its main exports such as coffee and bananas. Nevertheless, its GDP growth had not been sufficient to mitigate the huge deficit in its balance of payments, and indeed some development indicators had worsened. Reforms to increase competitiveness, attract investment and improve governance were necessary to bring about more fundamental changes, and this was precisely what Honduras had done. Key initiatives during this review period included a tax reform, and new or revised trade-related laws - two of which seemed to have attracted Members' attention in particular. 1.5. The first one was the new legislation in 2013 to create Employment and Economic Development Zones (ZEDEs), which aimed at, inter alia, developing the services sector. These were independent customs zones, which could help their own internal policies and regulations, including fiscal and monetary policy. 1.6. The second one was the Investment Promotion and Protection Law, which had been introduced in 2011 to provide greater protection to investors and streamline investment procedures. Members recalled that at the last review, there had been questions about Honduras' future initiatives to eliminate restrictions to foreign investment and improve its business environment. So, the new legislation was most welcome and, the Chairperson believed, would be a topic of great interest in the discussion. 1.7. As an economy largely dependent on international trade, Honduras had to maintain strong and mutually beneficial economic relationships with its trading partners. In the last review, Members had acknowledged Honduras' strong commitment to the multilateral trading system and had noted its efforts in regional economic integration. How it had since then reached out to negotiate or implement free trade agreements with other trading partners such as the EFTA and Canada was a matter of interest to some Members. To sustain economic growth in the longer term, it was crucial that Honduras diversify both the products and the markets for its exports, but changes had not been apparent so far. Members wished to know what strategies Honduras had developed to further promote this cause. 1.8. With regard to specific trade measures, in 2010 Members had expressed appreciation for the improvements that Honduras had made in areas such as SPS and TBT, competition policy, and government procurement, and they had encouraged Honduras to remove the price band system and to reduce tariffs on a handful of products for which the applied tariff exceeded bound rates. They were pleased to note that Honduras had made further progress in competition policy and WT/TPR/M/336 • Honduras - 3 - government procurement. However, judging from the advance questions, it seemed to the Chairperson that those issues relating to the tariff regime were yet to be fully addressed. 1.9. Other issues that continued to feature in Members' advance questions included customs procedures and customs valuation, export support regimes, and intellectual property rights. It would be helpful to hear from Honduras the policy actions that it had taken in these areas. 1.10. This meeting would be a good opportunity for Members to discuss in greater detail issues of interest to them and of systemic importance to the multilateral trading system. The Chairperson looked forward to a fruitful exchange. WT/TPR/M/336 • Honduras - 4 - 2 OPENING STATEMENT BY THE REPRESENTATIVE OF HONDURAS (MR. MELVIN REDONDO) 2.1. Honduras is particularly pleased this morning to be presenting the third review of its trade policies. I would especially like to thank Dr Shin Yuan Lai, Permanent Representative of the Customs Territory of Taiwan, Penghu, Kinmen and Matsu, for agreeing to serve as the discussant in this review. 2.2. We thank Argentina, Australia, Brazil, Canada, Chile, China, Colombia, the Dominican Republic, the European Union, Ecuador, El Salvador, Guatemala, Mexico, Peru, the Customs Territory of Taiwan, Penghu, Kinmen and Matsu, and the United States for their questions. Our thanks also go to the WTO Secretariat for its report on the trade policies of Honduras and for assisting our Government with the preparation of the review. We have replied to the questions posed by Members and have requested the Secretariat to circulate them for the purposes of this review. However, as some of the questions were received at a late stage, the relevant institutions are still responding to them, so the answers will be submitted at the second review session. We were interested to note some of the questions raised by Members concerning recent aspects of our economic policy, such as those relating to the Employment and Economic Development Zones (ZEDE), public private partnerships, and matters pertaining to Central America's regional economic integration. We have also noted the interest expressed by Members in topics relating to our country's experience in implementing its preferential trade agreements and in specific issues being discussed in the agreements' joint administrative bodies. These questions have been addressed and replies given in a spirit of transparency, on the understanding that the bodies concerned will be able to provide further details. 2.3. For Honduras, this third trade policy review provides an opportunity to describe the progress made in the conduct and performance of its economic and social policies since the second review in 2010 and to highlight Honduras' commitment, within a long term policy framework, to raising living standards for all Hondurans. Honduras still faces a number of social and economic challenges, which are growing as global economic recovery gathers pace following the 2009 economic and financial crisis, as well as challenges arising from the effects of climate change, to which Honduras is particularly vulnerable. 2.4. Since its second review, Honduras has undertaken to maintain a series of policies geared towards setting the country back on the path to economic growth, remedying fiscal imbalances, promoting job creation, modernizing infrastructure, improving social security, combating corruption and impunity, and fighting crime. 2.5. In terms of macroeconomic policy, the primary feature of the review period is the consolidation of macroeconomic stability, as illustrated by the improvement in macroeconomic variables and recovery in growth. This has helped Honduras regain trust and credibility at international level, as evidenced by the improved risk profiles published by the principal
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