In 1995, the United States trade surplus with Guatemala was $119 million, $47
million greater than it was in 1994. U.S. merchandise exports to Guatemala in
1995 were $1.65 billion, a $291 million increase over those in 1994. Guatemala
was the United States' forty-second largest export market in 1995. U.S. imports
from Guatemala were $1.5 billion in 1995, up 19 percent from those in 1994.
The stock of U.S. foreign direct investment in Guatemala was $133 million in
1994, 2.9 percent less than that in 1993. U.S. direct investment in Guatemala is
concentrated largely in manufacturing, petroleum and finance.
Guatemala, along with other members of the Central American Common Market
(CACM) (Costa Rica, El Salvador, Honduras and Nicaragua) is working toward full
implementation of a common external tariff (CET) of between 5-20 percent for
most products. However, in 1995 the members of the CACM agreed to reduce the CET
to O-15 percent, but allowed each member country to determine the timing of the
changes. With the agreement of the CACM, in 1995 Guatemala dropped the MFN
tariff on capital goods to one percent from the CACM base rate of five percent.
With certain exceptions, there are no duties for products traded among CACM
Customs Valuation Policies for Poultry
Notwithstanding agreement to switch to transaction value for the calculation
of tariffs on chicken parts as part of its Uruguay Round commitments, the
Government of Guatemala continues to use a reference price methodology. As a
result, for tariff purposes, imports are valued at about double their actual
prices. Additional protection for chicken producers is provided by a 300 metric
ton per month tariff rate quota (TRQ). Imports within the quota pay a 20 percent
duty while imports in excess of the TRQ pay a 45 percent duty.
Failure to Expand the Poultry Tariff Rate Quota
Guatemala has failed to meet its commitment to expand the TRQ on poultry
imports from 3,600 mt per year to 5,500 mt effective January 1, 1995 and 5,650
mt effective January 1, 1996. Lost U.S. sales because of this protection are
estimated at $2.5 million for 1995.
Apple Import Permits
The Government of Guatemala agreed during its GATT accession and in its
Uruguay Round commitments
U.S. companies have cited the uncertainty of obtaining a license as the
reason they have not expanded their investment to distribute U.S. apples. The
result is an estimated $ 1 million in lost export sales.
Grain Price Bands
Price bands for corn and rice were eliminated in late 1995. Guatemala is
likely to eliminate the price band for sorghum, the only grain still covered, in
STANDARDS, TESTING, LABELING AND CERTIFICATION
Under Guatemalan law, products sold in the domestic market must be registered
and carry labels in Spanish. Both enforcement of and compliance with the law are
irregular. If fully enforced, the requirement could restrict and/or delay the
entry of an estimated $39 million of U.S. exports due to the time required to
test and register products.
Under the government procurement law, all government purchases over $161,000
must be submitted for public competitive bidding of no less than five bidders.
Foreign suppliers must meet pre-qualification requirements and submit bids
through locally-established representatives. Exceptions exist only when a
project is considered to be so urgent as to be declared a national emergency, in
which case the government can forego the bidding process and may acquire the
goods or services from local firms or through dealers for direct importation.
The embassy is unaware of any discrimination against products of U.S. origin,
which generally enjoy good success in the government procurement market.
LACK OF INTELLECTUAL PROPERTY PROTECTION
Although Guatemala is making some efforts to modernize its IPR regime, its
protection of intellectual property rights remains inadequate.
A 1992 law authorized a Government of Guatemala regulatory entity to enforce
the international IPR obligations of local cable TV operators. To date, however,
no implementing action has been taken and the entity has not been established.
In 1994, on the basis of agreements between Guatemalan cable TV operators and
the Motion Picture Exporters Association of America (MPEAA), a 1991 GSP petition
alleging persistent copyright infringement and piracy of satellite signals was
withdrawn. In October 1995, citing violations of those agreements by cable
companies, the MPA (successor to the MPEAA) voided the 1994 agreements and
instructed cable operators to cease transmission of MPA signals. A number of
cable companies ignored the demand and continued pirating the signals while they
sought to reopen negotiations with the signal providers. Video piracy apparently
has diminished. Guatemalan law does not expressly protect computer software.
Guatemala's patent law is out of date and deficient in several areas. These
include limiting protection to only fifteen years (ten years for food,
beverages, medicines and agrochemicals), broad compulsory licensing and parallel
import requirements. A number of subject areas are not patentable including
mathematical methods, living organisms, commercial plans, surgical, therapeutic
or diagnostic methods, and chemical compoundsor compositions. Under the WTO
TRIPs Agreement, Guatemala was required to establish a patent "mailbox" for
pharmaceutical and agricultural chemical products by January 1, 1995, but has
not done so.
Guatemala's law does not provide sufficient protection for owners of
well-known trademarks as the right to exclusive use is granted to the first to
file. This has permitted third parties to register and use (or prevent others
from using) internationally-known trademarks. Sales of falsified name-brand
clothing and other merchandise are wide spread in Guatemala. Guatemala is a
signatory of the 1994 revision of the Central American Convention for the
Protection of Industrial Property. If the convention comes into force and is
ratified by Guatemala, some of these deficiencies would be overcome. In January
1996, however, the Guatemalan Congress voted against ratification of the
Majority foreign ownership in telecommunications services is not permitted.
Professional services, such as legal and medical, may be offered by anyone who
has passed the Guatemalan licensing exams and has properly incorporated. The
major U.S. CPA firms have affiliates in Guatemala.
Guatemala generally welcomes foreign investment, although the complex, often
confusing welter of laws and regulations can sometimes be discouraging.
Legislation designed to assure national treatment, clarify investment rules and
speed-up registration was adopted in 1995, but has yet to be implemented.
Restrictions on foreign investment remain in several sectors of the economy
including public utilities, auditing, insurance, mineral exploitation, forestry
and the media. In response to the need for additional investment in
telecommunications and electricity supply, the government is continuing to seek
ways of encouraging further foreign participation.