The United States Warning to establish a new specifications to agricultural products, in addition to the uncertainty that has been generated in Guatemalan economic agents, also has a legal, legal and commercial coverage established in the Free Trade Agreement (FTA).
The ex -negociators of the aforementioned commercial agreement Rubén Morales and Luis Pedro Cazali, provided a perspective on the meaning of breaking the rules agreed in the FTA, what should be done and how to react, if these measures will be materialized to Central America.
What does the implementation of a tariff regime mean in the context of a FTA?
Tariff regimes are optional from countries, since they are import taxes. But as part of the import regime, they are also subject to being negotiated for their reduction or management according to the commercial policy of each country. They are increased, maintained or reduced, depending on the objective you want to achieve.
Tariffs are an important part of the negotiation of the FTAs, but as they reach their relatively rapid reduction goal; They cease to be effective. That is why now they are reestablishing them in the US, and the retaliation by their affected commercial partners.
The case of USA, and very likely any country, can reestablish tariffs that had already been reduced with the argument of safety, health, environment, among others, and there may not be violation of the FTA, but that must be defined later.
“I believe that the Ministry of Foreign Affairs and the Ministry of Economy should go to Washington DC, look for spaces with state department officials”
Rubén Morales, FTA exnegociator
Why is it said that there is a BTC break, when a tariff is imposed by one of the parties?
This break is given because the agreement is to maintain the tariff according to the relief program and there should be maintained; It is said that tariffs are frozen. Any modification would be a violation of the agreed.
In his experience and knowledge, what should Guatemala do with the announcement of the possibility of an imposition of tariffs on agricultural products by the US?
I consider that the Ministry of Foreign Affairs and the Ministry of Economy should go to Washington DC, find spaces with officials of the State Department, office of the United States Commercial Representative (USTR), senators and congressmen to probe what they have thought for the countries of Central America and depending on that, and prepare.
In the legal, legal and commercial part, what are the recommendations that economic agents must prepare?
Economic agents must be aware that US measures may come at any time for Central America, but I consider that at this time we are not in the sight of the United States government. The fact that the first tour of Secretary of State Marco Rubio has been in the region, was to talk about migration, security, drug trafficking, China and other issues, but not to “inform” about possible effects on the FTA. At the moment, I estimate that we are out of that danger, but only if what they raised is done.
Luis Pedro Cazali
What does the implementation of a tariff regime mean in the context of a FTA?
In a FTA, the tariff situation of all products is agreed, including those that will not be deduced. For those who, if they will have benefits, it is established that countries undertake not to increase rates again, except for very special situations.
Why is it said that there is a BTC break, when a tariff is imposed by one of the parties?
Because it is a breach of the provisions of the FTA. The legal impossibility of retreating is not established, concessions cannot be withdrawn and less unilaterally. Then the term “break” is used as a synonym for “breach.”
In the international legal framework, this is unthinkable, is to go against the principles that support the commercial agreements.
In his experience and knowledge, what should Guatemala do with the announcement of the possibility of an imposition of tariffs on agricultural products by the US?
From this situation we must learn that it is very necessary to open markets. Finish agreements that have years without being completed, as well as make more effort to take advantage of those in force.
My impression is that the application of tariffs will be selective, about products that are obtained in the United States. Therefore, for example, tropical fruits and coffee should not be affected. Otherwise in tobacco and several vegetables.
In processed foods, there are few exports, except in alcoholic and non -alcoholic beverages that are agribusiness sectors with greater danger.
“From this situation we must learn that it is very necessary
Luis Pedro Cazali, exnegociator of the FTA
In the legal, legal and commercial part, what are the recommendations that economic agents must prepare?
These times are very unpredictability for trade to the United States. They will have to evaluate costs and, although the tariffs are paid by the importer, prices will have to remain competitive in entering that market.
Scenarios must be handled, as the plan changes if the same rate is applied to all countries, or if there are exceptions to competitors of our products. And in the case of non -perishable goods or with a higher period of use, they would have to review the possibility of shipments during March. What is happening is harmful to all and destroys the system built to generate economic growth through trade.