Guatemala Enters Regional Free-Trade Pact with U.S.

July 7, 2006

GUATEMALA CITY – Guatemala this week became the fourth country to enter into the U.S.-Central American Free-Trade Agreement (CAFTA) with mixed emotions.

Guatemalan business owners are optimistic about the accord going into effect, while campesinos and leaders of social organizations called it “a day of national mourning” because they believe it will increase poverty and end the country’s sovereignty.

Over the past week, some 300 indigenous families have invaded farms in the interior of the country to protest CAFTA, according to campesino leader Aparicio Pérez.

According to the National Coordinator of Campesino Organizations (CNOC), the trade agreement will plunge millions of Guatemalans into poverty while enriching the affluent corporate class even more.

Some 94% of the products that Guatemala exports to the United States will be admitted duty free, while 82% of U.S. products will enter the Guatemalan market duty free, according to Economy Minister Marcio Cuevas.

Last year, Guatemalan exports reached $3.4 billion, of which 52.5% was sold on the U.S. market. At the same time, imports amounted to $8.8 billion, with 38.7% coming from the United States.

Cuevas estimates that in CAFTA’s first year in operation it could create 10,000 new jobs.

Nonetheless, a survey by the Social Studies and Research Association (ASIES) discovered that eight in 10 Guatemalan business owners are not prepared to deal with the challenges of the trade agreement, and that only two in 10 have invested in the technology and personnel training that will enable them to meet the demands of the trade pact.

In Central America, Costa Rica is the last remaining CAFTA holdout.

 

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