GUATEMALA

GUATEMALA
 A multicultural country. During the 20th century it had different
military and civilian governments and experienced a guerrilla
conflict for 36 years. In 1996 the government signed a peace
agreement and the country has managed to achieve
macroeconomic and political stability. Guatemala is the biggest
economy in Central America, however it is also the most
populous with a GDP per capita roughly the middle of the Latin
American average. It faces development challenges such as
ensuring revenues to finance public spending on education,
health and infrastructure. Also, Guatemala needs to foster
inclusive growth and address social inequalities. 
SIZE AND POPULATION

Guatemala has an area of

42,043 square miles
(108,890 sq km), which is
about the same size as the
state of Tennessee.
 Guatemala, a Central American country south of Mexico, is
home to volcanoes, rainforests and ancient Mayan sites.

 The small Central American country of Guatemala spans the

narrow strip of land between North and South America,
touching both the Pacific Ocean and the Caribbean Sea. Its
border also touches Mexico, Belize, El Salvador, and Honduras.

  The dominance of an Indian culture within its interior uplands

distinguishes Guatemala from its Central American neighbors. 
THE CURRENT POPULATION OF GUATEMALA IS 18,343,796 BASED ON PROJECTIONS
OF THE LATEST UNITED NATIONS DATA. 
 Guatemala is the most populous country in 
Central America.

 The capital of the country is Guatemala City, with about a

million people living there. 

 Despite the size and growth of its economy, inequality

persists. Poverty is widespread, with the country’s
indigenous population being disproportionately affected,
and the gap between rich and poor is among the highest in
Latin America. Guatemala suffers from high malnutrition
and infant mortality rates. Guatemala’s crime rate is among
the highest in all of Latin America, and violence is
negatively affecting the country’s economy, according to
the World Bank.
In 2019 Guatemala was the number 68
economy in the world in terms of GDP
(current US$), the number 85 in total
exports, the number 79 in total imports, the
number 110 economy in terms of GDP per
capita (current US$) and the number 82
most complex economy according to the
Economic Complexity Index (ECI).
 MAIN TRADE OF GUATEMALA

 The United States is Guatemala’s primary trading partner in both

imports and exports. Other trading partners include Mexico, China, 
Honduras, El Salvador, Nicaragua, Canada, and Panama. In 1960
Guatemala joined in the founding of the 
Central American Common Market (CACM), which fostered trade
between Central American countries but was only moderately successful
in stimulating intra-isthmian trade. CACM suspended its activities in the
mid-1980s but renewed its efforts in the 1990s. By 1993 El Salvador,
Guatemala, Honduras, and Nicaragua had ratified a new Central
American Free Trade Zone (later signed by Costa Rica) to reduce
intraregional trade tariffs gradually over a period of several years,
though implementation was subsequently delayed until the realization
of SIEPAC in 1996.
 MAIN EXPORT OF GUATEMALA

In 2019, Guatemala was the world's biggest

exporter of Nutmeg, mace and cardamon's
 ($653M)
The top exports of Guatemala are Bananas
 ($1.16B), Raw Sugar($707M), Coffee
 ($692M), Nutmeg, mace and cardamons
 ($653M), and Palm Oil ($399M), exporting
mostly to United States ($3.92B), El Salvador
 ($1.38B), Honduras ($987M), Mexico ($571M),
and Nicaragua ($552M).
WHAT DOES GUATEMALA EXPORT TO THE
WORLD?
 The major exports are chemical products and coffee, followed by
sugar, bananas, crude petroleum, and cardamom. The exports of
vegetables, fresh fruits, cut flowers, and seafoods are of increasing
importance.

 Guatemala is the Mecca for coffee farmers — and for very good
reasons. Guatemala's unique growing region, with a mild subtropical
climate, combined with nutrient-rich volcanic soil, create an ideal
environment for growing some of the most delicious coffee beans in
the market.
Guatemala's Top Exports in 2020:
 9.74% ($1.13 billion) - Nutmeg, mace and cardamoms.
 8.19% ($955 million) - Bananas, including plantains, fresh or dried.
 5.6% ($653 million) - Coffee, whether or not roasted or decaffeinated; coffee husks and
skins; coffee substitutes containing coffee in any proportion.
 4.97% ($579 million) - Cane or beet sugar and chemically pure sucrose, in solid form.
 3.99% ($465 million) - Palm oil and its fractions, whether or not refined, but not
chemically modified.
 2.75% ($320 million) - Ferro-alloys.
 2.4% ($280 million) - Men's or boys' shirts, knitted or crocheted.
 2.32% ($271 million) - Jerseys, pullovers, cardigans, waist-coats and similar articles,
knitted or crocheted.
 2.22% ($259 million) - Medicaments (excluding goods of heading 30.02, 30.05 or 30.06)
consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in
measured doses (including those in the form of transdermal administration systems) or
in forms or packings for retail sale.
 2.04% ($238 million) - Women's or girls' blouses, shirts and shirt-blouses, knitted or
crocheted.
 WHAT ARE THE TOP 3 IMPORTS OF GUATEMALA?

 Guatemala's main import partner is the United States (38 percent of

total imports). Others include: Mexico, China, and Central America.

 The top imports of Guatemala are Refined Petroleum ($2.34B), 

Broadcasting Equipment ($579M), Packaged Medicaments ($488M), Cars
 ($483M), and Delivery Trucks ($332M), importing mostly from 
United States ($6.77B), China ($2.34B), Mexico ($2.15B), El Salvador
($965M), and Panama ($667M).
 In 2019, Guatemala was the world's biggest importer of Iron Ingots($63.1M)
Imports structure to Guatemala in 2020 represented by the following
main commodity groups:

 11.8% (2.15 billion US$) - Mineral fuels, mineral oils and products of

their distillation; bituminous substances; mineral waxes
 8.5% (1.54 billion US$) - Electrical machinery and equipment and
parts thereof; sound recorders and reproducers, television image
and sound recorders and reproducers, and parts and accessories of
such articles
 7.78% (1.41 billion US$)- Nuclear reactors, boilers, machinery and
mechanical appliances; parts thereof
 6.8% (1.23 billion US$) - Vehicles other than railway or tramway
rolling stock, and parts and accessories thereof
 5.94% (1.08 billion US$) - Plastics and articles thereof
 3.78% (689 million US$) - Paper and paperboard; articles of paper
pulp, of paper or of paperboard
 3.77% (687 million US$) - Pharmaceutical products
 3.7% (674 million US$) - Iron and steel
 3.01% (549 million US$) - Cereals
 TRADE AGREEMENT OF GUATEMALA

 In 2004 Guatemala ratified a new Central America Free Trade Agreement with the United
States. Implementation of the agreement divided Guatemalans: peasant, labor, and
indigenous groups staunchly opposed it, while businesses and the government believed
it would attract more foreign investment and promote economic growth.

 Imports include mineral fuels, electrical machinery, transport equipment, pharmaceutical

and other chemical products, textiles, and food. The major exports are chemical products
and coffee, followed by sugar, bananas, crude petroleum, and cardamom. The exports of
vegetables, fresh fruits, cut flowers, and seafoods are of increasing importance.
 The cornerstone of the U.S. commercial policy for the region is the United States –
Central America – Dominican Republic Free Trade Agreement (CAFTA-DR).
TRADE AGREEMENT OF GUATEMALA

 Guatemalan GDP reached an estimated USD 78.45 billion in 2018,

with an estimated 3.0 percent growth rate in 2018.  The United
States and Guatemala enjoy a growing trade relationship, which
became even stronger after the entering into force of the U.S.-
Central America-Dominican Republic Free Trade Agreement
(CAFTA-DR). As of January 1, 2015, 100 percent of U.S. consumer
and industrial goods enter CAFTA-DR countries duty free (for
goods that meet the country-of-origin requirements). The United
States is Guatemala’s largest trading partner accounting for
nearly 40 percent of Guatemala’s trade.
TRADE AGREEMENT OF GUATEMALA
THE NORTHERN TRIANGLE
 Central America established a common external tariff schedule in
1998.  Six Central American countries signed a revised protocol
for economic integration and macroeconomic coordination in
October 1993.  The integration protocol allows Central American
countries to advance at varying rates toward more open trade.   
 Guatemala, El Salvador and Honduras have moved the most
rapidly towards eliminating trade barriers among themselves. In
February 2015, the presidents of Guatemala and Honduras signed
a general framework agreement to establish a customs union
between the two countries. 
 TRADE AGREEMENT OF GUATEMALA
THE NORTHERN TRIANGLE
 In January 2016, the Guatemalan Congress approved the protocol to enable a customs
union with Honduras, which has allowed for the free movement of people and goods
between the two countries.  Guatemala’s protocol to enable the customs union with
Honduras went into force in May 2016.   After completing regulatory, technical, and
administrative procedures, the two countries implemented the first stage of the
customs union process in June 2017.
 El Salvador began negotiations to join the customs union between Guatemala and
Honduras in October 2017 and deposited its instrument of adhesion to the customs
union between Honduras and Guatemala with the General Secretariat of the Central
American Integration System (SICA) in August 2018. El Salvador signed a resolution
to join the customs union process on legal and administrative aspects with Guatemala
and Honduras in November 2018.
 TRADE AGREEMENT OF GUATEMALA
STRONG MEXICO-GUATEMALA TRADE RELATIONS

 The free trade agreement between Mexico and Guatemala is regulated by the Northern
Triangle Free Trade Agreement. The in 2001 enforced agreement covers Mexico, Costa Rica,
Nicaragua, and the Northern Triangle.

The main objective of this agreement is to establish a free trade zone for all member states.

The objectives of the agreement between Mexico and the Northern Triangle are:
• the establishment of  shared rules and regulations to improve the flow of trade, to boost
foreign direct investment, enhance international trade in services, simplify procedures of
intellectual property rights (trademarks, copyrights, etc.), dispute resolution 
 Mexico is one of Guatemala’s top import and export destinations. Guatemala exports an
average of US$509 million of goods to Mexico. Guatemala’s imports from Mexico are worth
US$1.63 billion, which is almost 12% of Guatemala’s total imports. Imported products are
mainly medicines, electric energy, electronics and iron products. In return, Guatemala
exports bananas, sugar and textiles.
TRADE AGREEMENT OF GUATEMALA
TAIWAN-GUATEMALA FREE TRADE AGREEMENT

 The free trade agreement between Guatemala and

Taiwan, enforced in 2006, is primarily based on the
extension of free tariff treatments of agricultural
exports. As part of that, Guatemala exports US$40
million in products to Taiwan and imports US$90 million.

The main exports from Guatemala are sugar and coffee.

In return, Taiwanese exports to Guatemala include
tobacco, seafood (shrimps and lobsters), copper articles,
plastic materials, and some other.
 TRADE AGREEMENT OF GUATEMALA
COLOMBIA-GUATEMALA FREE TRADE
 In 2006, Colombia initiated negotiations towards a free
trade agreement with the Northern Triangle countries. In
2009, Guatemala was the first country to agree on free
trade with Colombia. As close neighbours, Colombia
represents an attractive market for Guatemalan exporters.
The developing country is the third-largest economy in
Latin America, and houses a swelling middle class that
appear to be seeking variety in the products available to
them.
TRADE AGREEMENT OF GUATEMALA
GUATEMALA AND THE EUROPEAN FREE
TRADE ASSOCIATION
 Guatemala signed the free trade agreement with the
European Free Trade Association in 2015. This
agreement aims to enhance economic ties and promote
trade and investment between the EFTA states (Iceland,
Lichtenstein, Norway and Switzerland) and Guatemala. 
 This gives Guatemala significant international reach and
incentives to trade abroad, offering new options and
alternatives to these markets. Exporters should consider
the advantages available to them as traders based in
Guatemala.