Ruben Cantu

Ruben Cantu

The inability of the government of Guatemala to serve as a “safe third country” has sparked the anger of the U.S. federal administration, deeming the Central American country as not complying with its prior commitment to help resolve the humanitarian crisis.

The initiative, which would have required migrants passing through Guatemala to petition for asylum there before coming to the U.S., was stuck down by Guatemala’s supreme court. The court ruled the action by president Jimmy Morales unconstitutional unless approved by congress.

I am no expert on U.S. law, Mexican law or much less Guatemalan law (or anything else for all intents and purposes), but I do understand the democratic principle of a government with multiple independent branches.

I also understand that dealing with one individual such as the president must be much easier than convincing a large number of legislators when each one of them must have their own independent position on certain subject-matter (Have we seen that somewhere else? Mmmm).

President Donald Trump has announced the U.S. is considering imposing tariffs on Guatemala, unless they agree to act as a “third safe country,” which seems unlikely to occur – at least at this point – so let’s analyze the U.S. commercial trade with Guatemala.

The U.S. has been a signatory of the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR), which was signed in 2004 with Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic.

Different parts of the agreement went into effect between 2006-2009.

According to the Office of the United States Trade Representative, U.S. goods and services trade with Guatemala totaled an estimated $13.7 billion in 2017 (latest data available). Exports were $8.6 billion; imports were $5.1 billion. The U.S. goods and services trade surplus with Guatemala was $3.4 billion in 2017.

Guatemala is currently our 46th largest goods trading partner with $10.9 billion in total (two way) goods trade during 2018. Goods exports totaled $6.6 billion; goods imports totaled $4.2 billion. The U.S. goods trade surplus with Guatemala was $2.4 billion in 2018.

Trade in services with Guatemala (exports and imports) totaled an estimated $2.8 billion in 2017 (latest data available). Services exports were $1.7 billion; services imports were $1.1 billion. The U.S. services trade surplus with Guatemala was $541 million in 2017 (latest data available).

According to the Department of Commerce, U.S. exports of goods and services to Guatemala supported an estimated 34,000 jobs in 2015 (latest data available) (25,000 supported by goods exports and 9,000 supported by services exports).

Exports

Guatemala was the United States’ 37th largest goods export market in 2018 with $6.6 billion, with the top categories being: mineral fuels ($2.2 billion), medicinal and pharmaceutical products donated for relief ($622 million), machinery ($417 million), cereals (corn) ($369 million), and electrical machinery ($319 million).

U.S. total exports of agricultural products to Guatemala totaled $1.3 billion in 2018. Leading domestic export categories include: corn ($196 million), soybean meal ($170 million), wheat ($133 million), poultry meat and products (ex. eggs) ($123 million), and cotton ($99 million).

U.S. exports of services to Guatemala were an estimated $1.7 billion in 2017 (latest data available), leading services exports from the U.S. to Guatemala were in the travel, transport, and financial services sectors.

​Imports

Guatemala was the United States’ 53rd largest supplier of goods imports in 2018, totaling $4.2 billion in 2018, with the top categories being: edible fruits and nuts (bananas, plantains) ($1.3 billion), knit apparel ($1.2 billion), coffee, tea and spice (coffee) ($340 million), woven apparel ($290 million), and vegetables (legumes) ($222 million).

U.S. total imports of agricultural products from Guatemala totaled $2.2 billion in 2018. Leading categories include: bananas and plantains ($963 million), coffee, unroasted ($326 million), other fresh fruit ($260 million), fresh vegetables ($150 million), and processed fruit and vegetables ($135 million).

U.S. imports of services from Guatemala were an estimated $1.1 billion in 2017, leading services imports from Guatemala to the U.S. were in the travel, transport, and technical and other services sectors.

On top of getting the long end of the stick, the U.S. needs to look into the pros and cons of being involved in yet another trade war with a friendly nation. Just something to consider.

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