Central American integration through infrastructure development

A case study of Costa Rican hydropower

in Regions and Cohesion

At the turn of the 21st century, protectionist policies in Latin America were largely abandoned for an agenda that promoted free trade and regional integration. Central America especially experienced an increase in international, interstate, and intraregional economic integration through trade liberalization. In 2004, such integration was on the agenda of every Central American administration, the U.S. Congress, and Mexico. The Plan Puebla-Panama (PPP) and the Central America Integrated Electricity System (SIEPAC), in particular, aimed to facilitate the success of free trade by increasing energy production and transmission on a unified regional power grid (Mesoamerica, 2011). Meanwhile, for the United States, a free trade agreement (FTA) with Central America would bring it a step closer to realizing a hemispheric trade bloc while securing market access for its products. Isthmus states considered the potential for a Central America Free Trade Agreement (CAFTA) with the United States, their largest trading partner, as an opportunity to enter the global market on a united front. A decade and a half on, CAFTA, PPP, and SIEPAC are interwoven, complimentary initiatives that exemplify a shift towards increased free trade and development throughout the region. As such, to understand one, the other must be examined.

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Regions and Cohesion

Regiones y Cohesión / Régions et Cohésion