How did civil wars disrupt Central American trade during the 1980s?

During the 1980s, civil wars and internal political instability severely disrupted trade in Central America, leading to economic stagnation and decline across the region. The impact on trade manifested in several ways:12

• Collapse of Regional Integration: The Central American Common Market (CACM), which had previously facilitated significant growth in intraregional trade, suspended its activities in the mid-1980s due to violence, internal political instability, and protectionist pressures.2
• Trade Barriers and Tensions: Ongoing conflicts, particularly tensions between the revolutionary government of Nicaragua and its neighbors, disrupted commerce between nations. Additionally, trade was hindered by the imposition of various restrictions and tariffs, such as those implemented by Guatemala in 1983.32
• External Embargoes: The United States imposed a trade embargo on Nicaragua in 1985, which, combined with the costs of defending against counterrevolution and internal economic mismanagement, exacerbated the country's economic decline.45
• Humanitarian and Economic Costs: Armed conflict and poor social conditions contributed to widespread economic decline, forcing most countries to seek foreign aid from institutions like the World Bank. The unrest also caused mass displacement, with up to 1,000,000 people fleeing their homes, further destabilizing local economies.1