The development of future negotiations with the United States will be decisive for the issue of tariffs to Guatemala. Bring technical approaches to the table between the public and private sector with the authorities of the United States, is what it recommends Rodolfo Pérez expert from the firm of consultants Ey Guatemala.
The specialist, indicates that in the texts of the Free Trade Agreement (FTA) and those released in the United States there are “exceptional” elements that producers and exporters must first know.
What are the first impressions in the region about tariff measures?
The first analysis for the region is that it was something that had been announced, so economic agents should already be prepared how they were going to impact them. Those who managed to do so will have alternatives and scenarios.
The large group of the national and Central American entrepreneur, has not been given the task of doing the full exercise, so then, it is visualized that there is a punitive tariff, in the region except for Nicaragua, they have the lowest penalty.
This percentage, let’s say in a competitive environment, that stresses business but still leaves us certain advantages, that they must take advantage of.
What attitude should the producer and exporter take?
Caution, prudence and that is not entered into a panic, because even, in the midst of this Guatemala scenario and the rest of the countries, they continue to have an advantageous position.
Of course, there is an element that will raise the costs and there is the decision to transfer the final consumer, a portion or fraction will be consumed and it may also be that it enters a very particular negotiation at tables with the central government to know which products could be excluded.
On the horizon, what do you perceive?
At this time, uncertainty reigns, although it was an official and formal announcement, which will have an effect, as will be structured and what categories would be to be applied. You have to make an analysis of the small letter and although it is a reciprocal tariff, there are some small clauses that have left the windows open.
These elements must be reviewed, which are not many, there are exceptions, which, although the announcement is global for the entire universe of exports, there are some products and goods that were left without the application, which in Annex three of the official document, there are some woods, fungicides among others.
A recommendation to business is to know the detail of how it will impact us and the structuring of the supply for some of the goods that are imported from the USA.
For exporters, review the elements where I am supplying to manufacture what I am dispatched, since, although it is 10% of the tariff, that structure can be distrustful to determine how onerous the impact will be so to determine if there are some elements to lighten the load of the tariff.
What are countries doing?
In Costa Rica, the authorities have already announced some technical meetings measures, so Guatemala should not be left behind, because there are opportunities for how the tariff percentage can be reduced to the US.
In your opinion, what elements should that negotiating table have?
As a country we know which are the sectors that benefit most from foreign trade, which must be at the forefront at level one. The other is to bring to the table to what the US authorities have led him to apply tariffs, to tie the conditions. It is logical that there is a disproportion in the commercial balance, which is a technical element that should be raised.
There you can say that it is not punished with 10%, so those that generate value of key elements can be released.
What would be the main recommendations?
Use the technical elements of tariffs that can be used in the instrument of the FTA with the USA., Which are the exceptions. The economic groups must establish an agenda and carry the top three to take to that technical table, because it will be the one that will least affect the economy and by sector that can be agricultural, costumes and textiles, but having the clarity which is the one that has the most weight.
The sectors must go from Nearshoring to the new concept of FriendShoring As El Salvador is doing in helping the US, which is achieving that economic link, so Guatemala has many opportunities in that way.