Mexico signed a free trade agreement with five Central American countries on Tuesday, giving them preferential access to Mexico's sugar market.
Consolidating a series of smaller trade accords, the agreement signed in San Salvador creates an import quota scheme that will allow Central American nations to export sugar to Mexico without paying tariffs.
Mexican Economy Minister Bruno Ferrari said Guatemala, the region's biggest sugar producer, would receive a 22 percent share of future sugar import quotas, Honduras would receive 8 percent, Costa Rica 5 percent and El Salvador 8 percent.
Nicaragua, which already has a duty-free sugar deal with Mexico, will retain its 10 percent share.
This means the five Central American countries will account for more than half of each sugar import quota Mexico announces in future.
Low production has forced Mexico to issue import quotas in the past few years, but the government has also been prompted to issue quotas because exports of Mexican sugar to the United States have increased.
"What we have negotiated is that when there are these shortages (of sugar) in Mexico there will be a sugar import quota for the region," Ferrari said.
"These existed before but in a very limited way." According to government estimates, Mexico will produce 5.4 million tonnes of sugar during the 2011/2012 harvest.
The country normally charges $360 per tonne duty on sugar imports.
Trade between Mexico and the five Central American nations has increased almost four-fold in the last decade to $6.5 billion in 2010, and Mexico's economy ministry said it expected this trend would continue with the new agreement.
Central American exports of textiles, paper and electrical conductors will receive favourable treatment under the deal, while Mexico won concessions for exports of dairy products and for its auto industry.
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