Honduras Trade

Subchapters:

  • Business Relationships
  • Foreign direct investment
  • FTAs ​​and Treaties
  • Development Cooperation
  • Prospective fields of study (MOP)

Business relations

Trade relations with the EU

Honduras is the EU’s 89th trading partner, with an increase in the volume of goods traded between Honduras and the EU in the past year. EU exports to Honduras experienced a significant share, but EU imports from Honduras did not lag behind either. In 2021, goods worth €1.210 billion were imported from Honduras to EU countries (mainly coffee, palm oil and shrimp) and products worth €585 million were exported (mainly machinery for the textile industry).

  • Allcountrylist: Overview of major industries in Honduras, including mining, construction, transportation, tourism, and foreign trade.
2017 2018 2019 2020 2021
Exports from the EU (million EUR) 425 468.7 464.5 345.3 585.1
Imports into the EU (million EUR) 1,134.90 1,026.60 977.8 1,085.20 1,210.40
Balance with the EU (million EUR) 709.9 557.9 513.3 739.9 625.3

Source: European Commission

Trade relations with the Czech Republic

In 2021, there was a significant revival of the Czech Republic’s exports to Honduras, after it had remained in lower numbers for the past three years. Exports from the Czech Republic are mainly focused on products with a higher added value, especially plastic products, weapons and cartridges. On the contrary, imports from Honduras to the Czech Republic have had a constant downward trend since 2016, and these are mainly textile products, coffee, cigars and tropical fruits.

2017 2018 2019 2020 2021
Exports from the Czech Republic (billion CZK) 0.1 0.2 0.1 0.2 0.3
Imports to the Czech Republic (billion CZK) 0.3 0.1 0.1 0.1 0.1
Balance with the Czech Republic (billion CZK) 0.2 -0.1 0 -0.1 -0.2

Source: CZSO

Trade relations with countries outside the EU

Honduras’ main trading partner is the USA, which accounts for up to 50% of exports and imports, other partners include mainly the surrounding Central American countries (Guatemala, El Salvador, Nicaragua, Costa Rica), Canada, Mexico, and Taiwan.

2017 2018 2019 2020 2021
Exports from countries outside the EU (million EUR) 3,347.9 3 139.7 3,063.5 3 176.8 3,685.3
Imports to countries outside the EU (million EUR) 7,095.5 8,089.1 7,823.2 6,528.9 10,126.0
Balance with non-EU countries (million EUR) -3,747.6 -4,949.4 -4,759.7 -3,352.1 -6,440.7

Source: EIU, Eurostat

Foreign direct investment

During the last years, there has been an increasing growth of foreign investment in the Honduran economy. In 2021 alone, foreign investment in Honduras increased by 57%, with this increase due to both the reinvestment of profits in local subsidiaries and an increase in the interest of foreign capital to invest in Honduras. The main target was primarily the service sector (mainly finance, followed by hospitality and public services), but also the manufacturing industry. The main source of these investments are the states of North and South America, in third place in the EU.

Foreign direct investment in Honduras also flows to a lesser extent from the Czech Republic, primarily into private residential projects on the island of Roatán.

FTAs and treaties

The most important FTA for Honduras is clearly with the USA (DR-CAFTA) and the EU (Association Agreement). However, Central American trade integration is also of great importance, especially the subordinate Customs Union between Guatemala, Honduras and El Salvador, which enables simple cross-border trade and uniform conditions for the movement of goods between these countries.

Treaties with the EU

In 1993, the Framework Agreement on Cooperation between the EU and the countries of Central America was signed, and in 2003, a new Agreement on Political Dialogue and Cooperation was signed. In 2004, during a meeting at the highest level, it was decided that the new framework document for regional cooperation would be the Association Agreement. Honduras participated in the negotiations on the EU-Central American Association Agreement. The actual association agreement was signed on 6/29/2012 during the Central American Summit in Tegucigalpa (Honduras). The agreement consists of three basic pillars: politics, cooperation and free trade. With Honduras, the trade part of the Association Agreement has been provisionally implemented since August 1, 2013. With the entry into force of the agreement, the EU abolished 99% of the tariff items related to industrial products and fisheries. Conversely, Central America has committed to

Contracts with the Czech Republic

The contractual framework is limited to an agreement on the abolition of the visa requirement. An “Association Agreement between the EU and Central America” ​​was negotiated at the EU level, to which both Honduras and the Czech Republic are a part. The economic relations between the Czech Republic and Honduras are without significant problems. There are no obstacles in relations in the form of administrative restrictions or restrictions of a political nature.

Developmental cooperation

Honduras is a net recipient of development aid. One of the largest donors in the country is the EU, with programs in the amount of USD 235 million implemented in Honduras for the period 2014-2020. Within the framework of the new integration instrument for development cooperation NDICI-GE (the instrument for neighborhood and development and international cooperation of the EU), an additional EUR 128 million has been allocated for development programs in Honduras for the period 2021-2027. These programs are to be focused on two thematic areas:

  • Sustainable management of natural resources and climate change: 45%,
  • Employment, decent work and growth: 25.7%,
  • Rule of law and democratic governance: 20.7%

In addition to the MIP, the annual action plan for Honduras for 2021 was also approved, in which EUR 18.45 million was allocated to the “Cooperation Instrument for Honduras” programs (support measures for institutional strengthening of the public sector, strengthening of civil society and for strategic communication and public EU diplomacy) and “Towards a decarbonised economy: Adapting agricultural production to climate change in the context of the EU-Honduras Voluntary Partnership Agreement”.

The Czech Republic also implemented several smaller development projects in Honduras. In 2017, a small local project of the Ministry of Foreign Affairs of the Czech Republic “Construction of two wells in the community of the Church of the Moravian Brethren” was implemented in Honduras, which was followed the following year by a similar project for the construction of wells and solar panels in the same Christian community. In 2019, development aid focused on making agriculture more efficient in the Mosquitia area, and last but not least, in 2020, a project aimed at promoting decent work and empowering women and young people in the Catacamas region was implemented.

Prospective fields of study (MOP)

Honduras is not included in the ILO.

Honduras Trade