Guatemala Trade

Subchapters:

  • Business Relationships
  • Foreign direct investment
  • FTAs ​​and Treaties
  • Development Cooperation
  • Prospective fields of study (MOP)

Business relations

Trade relations with the EU

The European Union is the fourth most important exporter and importer of Guatemala. Guatemala ranks 79th in terms of EU trade relations. Mutual trade is increasing every year, but from 2020 the EU will import more goods from Guatemala than it will export to the country. The most exported to Guatemala are products of the chemical industry (26%), followed by products, machinery and equipment with high added value (20%), and finally, to a lesser extent, food and basic natural resources. In terms of imports, the highest imports into the EU are agricultural products (79%), specifically vegetables and fruits, fats and oils, as well as coffee, tobacco and spirits.

  • Allcountrylist: Overview of major industries in Guatemala, including mining, construction, transportation, tourism, and foreign trade.
2017 2018 2019 2020 2021
Exports from the EU (million EUR) 954.2 947.6 1000.10 907 1,133.30
Imports into the EU (million EUR) 931.8 899.2 980.6 925.7 1,260.60
Balance with the EU (million EUR) -22.3 -48.4 -19.5 18.8 127.3

Source: European Commission

Trade relations with the Czech Republic

The table shows a sharp increase in Czech exports to Guatemala in 2020, which was repeated in 2021. Exports to Guatemala are mainly focused on weapons and also on products with a higher added value (motor vehicles, textile machinery). On the contrary, rum, textiles, fruit, spices and cane sugar are mainly imported from Guatemala to the Czech Republic. After years of negative balance, in 2019 it was possible to reverse the trend by reducing imports (by reducing the import of primary agricultural crops), while the balance of the trade balance has been in positive values ​​for the last three years. However, the potential of the business relationship is still unfulfilled, especially in the areas of products with higher added value.

2017 2018 2019 2020 2021
Exports from the Czech Republic (billion CZK) 0.2 0.2 0.2 0.3 0.3
Imports to the Czech Republic (billion CZK) 0.1 0.2 0.2 0.2 0.2
Balance with the Czech Republic (billion CZK) 0 0 0 -0.1 ON

Source: CZSO

Trade relations with countries outside the EU

Guatemala’s main trading partner is the United States, other partners include its Central American neighbors, Mexico and China.

2017 2018 2019 2020 2021
Exports from countries outside the EU (million EUR) 8,380.5 8,376.1 8,494.1 8,529.1 9,338.7
Imports to countries outside the EU (million EUR) 14,698.9 15,823.5 15,918.8 14,549.1 19,903.2
Balance with non-EU countries (million EUR) -6,318.4 -7,447.5 -7,424.7 -6020.0 -10,564.5

Source: EIU, Eurostat

Foreign direct investment

The government is trying to support foreign direct investment in areas where local entrepreneurs do not have sufficient knowledge and technology – energy, environmental protection technology, agricultural technology, mining and quarrying machinery and food industry technology. There is also great interest in infrastructure investments (Guatemala is the least urbanized country in Latin America). The energy and telecommunications sectors are already open to foreign investors. There is a possibility of using “Public Private Partnerships” projects precisely in the area of ​​infrastructure. However, foreign direct investment often carries with it the risk of disputes with the local, mostly indigenous, population.

There is no information on direct foreign investments of the Czech Republic in Guatemala.

FTAs and treaties

The most important FTAs ​​for Guatemala are clearly with the US (DR-CAFTA), the EU (Association Agreement) and Mexico, which together cover about 75% of Guatemala’s trade. The Central American integration system is also of great importance, especially the subordinate Customs Union between Guatemala, Honduras and El Salvador, which enables simple cross-border trade and uniform conditions for goods. Other FTAs ​​are concluded with Colombia, Taiwan, Chile and the Dominican Republic.

Treaties with the EU

The association agreement between the EU and the countries of Central America was signed on 6/29/2012 during the Central American Summit in Tegucigalpa (Honduras). The agreement consists of three basic pillars: politics, cooperation and free trade. The trade part of this agreement has been provisionally implemented with Guatemala since 1 December 2013. With the entry into force of the agreement, the EU abolished 99% of the tariffs related to industrial products and fisheries. Conversely, Central America has pledged to provide duty-free access to all industrial products and fisheries by 2025.

Contracts with the Czech Republic

Mutual relations between the Czech Republic and Guatemala are governed by a series of agreements, which include in particular:

  • Agreement between the Government of the Czech Republic and the Government of the Republic of Guatemala on the abolition of the visa requirement for holders of diplomatic, consular and service or official passports negotiated by exchange of notes (Prague 17/10/2000, entry into force 17/11/2000).
  • Agreement between the government of the Czech Republic and the government of the Republic of Guatemala on the abolition of the visa requirement negotiated by exchange of notes (Place of signature 13/08/2004 Guatemala, entry into force 13/09/2004).
  • Memorandum on cooperation between the foreign ministries of the Czech Republic and Guatemala – signed in Ciudad de Guatemala on 11 July 2005 during the visit of min. abroad C. Svobody (entry into force 11.7.2006).
  • Agreement between the Czech Republic and the Republic of Guatemala on the support and mutual protection of investments (Prague, 8 July 2003).
  • The Agreement on Mutual Promotion and Protection of Investments entered into force on 4 May 2011 after a renegotiation process.
  • Memorandum on cooperation between the ministries of defense of the Czech Republic and Guatemala (signed in Guatemala City, 21/04/2022)

Developmental cooperation

The country is a net recipient of development aid, which focuses mainly on climate change, improving socio-economic conditions (especially for indigenous populations) and security (which is closely related to migration). Guatemala is one of the main recipients of EU foreign development aid in the Latin American region, with EUR 16 million spent on project implementation for the period 2014-2020. For the period 2021-2027, €141 million has been provisionally earmarked for Guatemala, which is the highest amount of any Central American country. The priority target sectors of the projects are to be:

  • Support for ecological transformation
  • Support for employment and digitization
  • Support for stronger institutions and civil society

In addition, the EU programs “Effective Domestic Revenue Mobilization for Inclusive Growth” and “Promoting Decent Employment in Guatemala” have been approved in Guatemala for 2021 and 2022.

Prospective fields of study (MOP)

Guatemala is not included in the ILO.

Guatemala Trade