Guatemala, Honduras see growth boost as customs union takes effect

Honduras' President Juan Orlando Hernandez speaks to the media after his arrival at Mariscal Sucre Airport in Quito, Ecuador May 23, 2017 ahead of Ecuadorean president inauguration. REUTERS/Henry Romero

TEGUCIGALPA (Reuters) - A Honduran-Guatemalan customs union aimed at boosting prosperity and stemming illegal migration to the United States could lift economic growth in the two countries by more than one percent, the Honduran government said on Monday.

At an event to mark the start of the union in the Honduran border post of Corinto, President Juan Orlando Hernandez said it could increase gross domestic product growth in the nations by about 1.2 percent, citing estimates by the United Nations Economic Commission for Latin America and the Caribbean (ECLAC).

Initially agreed in 2015, the step to facilitate movement of goods and people between the neighboring states should also lift bilateral trade by up to 2.4 percent, Hernandez said alongside his Guatemalan counterpart, Jimmy Morales.

The Central American nations of Guatemala, Honduras and El Salvador are home to the bulk of undocumented migrants who seek to cross the Mexican border into the United States. All three suffer from high levels of violence and poverty.

The three nations, along with Mexico and the United States, have pledged to work together to improve conditions in Central America to reduce the outflow of migrants, and officials from the nations met in Miami earlier this month for that purpose.

U.S. President Donald Trump has made cutting illegal immigration to the United States one of his top priorities. This has caused friction with Mexico due to Trump’s vow to build a border wall to keep out immigrants and have Mexico pay for it.

Reporting by Orfa Mejia; Editing by Sandra Maler