Final Text of Guatemala Trade Agreement Signed
The U.S. and Guatemala signed a reciprocal trade deal Jan. 30 that spares Central America Free Trade Agreement-compliant goods in textiles, apparel, luggage and bags from reciprocal tariffs, and implements the usual carve-outs from reciprocal tariffs, such as agricultural goods, pharmaceutical inputs, aircraft parts. It is quite similar to the El Salvador agreement signed one day earlier (see 2601290031).
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This agreement will "enter into force 30 days after the date on which the Parties have notified each other in writing of the completion of their respective applicable legal procedures, or on such other date as the Parties may decide."
The text includes dozens of pages of annexes with Harmonized Tariff Schedule codes for goods that will return to duty-free status, rather than facing either most-favored nation rates + 10% or 10%, when the goods qualified for CAFTA benefits.
Some slight differences between the two pacts include that Guatemala committed to recognizing U.S. withhold release orders on goods made with forced labor and to prohibiting imports from those entities.
Guatemala also promised to improve labor laws in "special economic zones, including export processing zones, or sector-specific laws or regulations that have lesser labor protections than the overall economy."
Where El Salvador promised to address unfair practices of any company that was responsible for below-market price exports to the U.S. or harmed U.S. exporters, Guatemala promised to do so only for those companies owned or controlled by countries outside Guatemala that operate in Guatemala.
Guatemala promised to adopt "measures of equivalent restrictive effect as those adopted by the United States to encourage shipbuilding and shipping by market economy countries," as El Salvador did, but the text says that Guatemalan and U.S. officials "shall discuss the structure and effect of such measures and recognize that non-Parties may also impose similar measures."