 COMMERCE AND TRADE |
As a member of the World Trade Organization, Guatemala is firmly committed to the principles of free trade, an open market economy and becoming part of the Free Trade Area of the Americas by 2005. To this effect Guatemala is taking steps to eliminate tariff and non-tariff trade barriers and has entered an agreement with the other countries of the region establishing the Central American Integration System (SICA) which will harmonize the region's macroeconomic policies, further reduce tariffs and promote exports and help attract foreign investment by providing additional regional incentives as well as a larger market.
Agriculture continues to play a major role in the economy, contributing roughly a quarter of total output and 70 per cent of total exports, and employing a quarter of the labor force. "To the investors in Guatemala there are open arms to them in the agriculture, forestry, livestock and hydro biological sectors, giving the largest opportunities for investment. Whatever information is wanted about these sectors they can contact us and without any hesitations we will provide it to them", said the Minister of Agriculture and Livestock, Mr Leopoldo Sandoval Villeda.
Despite aggressive economic diversification policies and the diminished relative importance of traditional agricultural exports, coffee, sugar and bananas still account for nearly half of total exports. Non-traditional export products, especially cut flowers, specialty fruits and berries, shrimp, and textile assemblage for export (maquila), are of increasing importance to the economy.
Guatemala's most important trading partner continues
to be the United States of America. United States
exports to Guatemala in 1999 totaled US$ 1.8 billion,
down from 1998's US$ 1.93 billion. Exports of United
States products to Guatemala are forecast to grow
by 12 per cent during 2000 and should reach US$1.9
billion. Mid-year exports in 2000 reached US$880.3
million. Guatemalan exports to the U.S. reached
US$2.3 billion in 1999, an increase of US$194 million
over 1998. Guatemala became the United States' 42nd
largest export market during 1999, and Guatemala's
exports to the U.S. market reached US$1.3 billion
at mid-year 2000. of Central America, SIECA, 2000. |
Guatemala, as a beneficiary of the Caribbean Basin Initiative and the Generalized System of Preferences (GSP), enjoys duty-free access for most exports to the United States market. Guatemala can also access on October 1, 2000 the benefits of the newly enacted Africa CBI Trade Bill, which provides eligible Caribbean Basin Initiative countries additional preferential tariff treatment through 2008 or before that if the FTAA or other significant trade agreement do not enter into force first. The Bill provides immediate tariff reduction to North American Free Trade Agreement levels for imports now excluded under the CBI. Goods covered include footwear, handbags, luggage, flat goods, work gloves and leather-wearing apparel, canned tuna, petroleum and petroleum products, as well as more liberal quotas for various types of textiles and clothing.
The Northern Triangle Countries (El Salvador, Honduras and Guatemala) recently signed a Free Trade Agreement with Mexico, to be implemented January 1, 2001, once the legislatures of the three Central American countries and the Mexican Senate ratify the Agreement. The Central American countries have also concluded free trade agreements with Chile and the Dominican Republic. Guatemala and Cuba endorsed a bilateral trade agreement in 1999.
In compliance with its WTO obligations, Guatemala has implemented Tariff Rate Quotas (TRQs) for apples, pears, rice, corn, wheat and wheat flour, poultry and beef. The Ministry of Economy has executed a new import policy for poultry that enlarges the TRQ to the level of Guatemala's final WTO commitment and reduces the in-quota tariff. |
