The Guatemala Chamber of Industry (CIG) coincides with other business chambers that it is necessary that commercial and diplomatic negotiations are at the highest level and that they must be urgently done.
Enrique Font, vice president of the Board of Directors of the CIG comments on the effects by adding other loads to logistics cost overruns that are already experienced in the country. And that it must be operated in three ways to solve the commercial barriers indicated by the United States.
The CIG is part of the Business Committee of International Commercial Negotiations (CENCIT), entity of the private sector that is made up of several associations to promote actions and negotiations on commercial opening. The Cencit has released data from the impact of the new 10% tariff of the United States to Guatemalan products, since several buyers are requiring that the new tax is assumed by exporters.
What has detected the CIG and how much ascends the amount of payment of tariffs by exporters?
Considering the 10%tariff, it is estimated that, for Guatemala exports, there will be an impact of more than US $ 40 million per month.
If the topic of the 10% tariff is not solved soon, for how much more time the companies can endure absorbing those costs and how are they affecting them today?
For companies, 10% tariff represents a significant impact, especially in those products in which consumer price sensitivity is very high, since this price increase subtracts us immediately competitiveness and puts us at a disadvantage with countries to which that 10% tariff is not being applied, as the case of Mexico.
The utility margins of the companies have been decreasing due to the increases of costs associated with the increase in the minimum wage, to those envelopes logistics due to the poor state of the roads, the delays in ports, among others.
Adding one more factor that increases costs and subtracts competitiveness puts companies in a worrying situation for their sustainability in the short term.
It has been mentioned that negotiations are needed to be at the highest level What do you think?
We insist that commercial and diplomatic negotiations at the highest level should be urgently done, as we express it to the President (Bernardo) Arévalo last week, since, if any competitor country manages to carry out an early negotiation with respect to Guatemala, the panorama is much more complicated for Guatemalan companies, especially micro, small and medium -sized companies and that is why the sense of emergency It becomes even more critical.
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It is extremely important to emphasize that Guatemala is a great ally of the United States in the region, because we have issues that are of common interest to both nations, such as employment generation to reduce irregular migration, safety promotion, especially on borders and the generation of safe supply chains that strengthen commercial exchange, to mention some.
What responses have received from the government?
We held a meeting last week with President Arévalo and members of his cabinet.
We sent the messages that this issue should be addressed urgently and this was even before the announcement of the suspension of tariffs for 3 months (for countries with higher rates) and the application of a global 10%, with some exceptions.
At the moment, we have not had answers about the concrete negotiation approach that the Government will have, but we continue in permanent communication with the Ministry of Economy and the Ministry of Foreign Affairs, emphasizing our proposal to present specific and short -term actions to solve the findings in the report of the Office of the United States Commercial Representative (USTR) on the barriers found for the United States trade with Guatemala. We consider that we can meet more specific actions at the beginning of next week.
What does Cencit and business chambers propose to negotiate with the United States to eliminate tariffs and what proposal the government has made them known to negotiate?
As a business sector, we emphasize that it is critical for the country to expedite Guatemala’s proposal to eliminate the tax of 10% and that, in addition, the improvement opportunities submitted in the Ustr report are urgently attended.
The simplification of procedures in the State dependencies, the improvement in efficiency in customs processes, and the promotion of transparency must be priority.
As a private sector, we have presented proposals to address these priorities that affect national and international entrepreneurs and exhort that the Government reacts with the speed that this issue merits.
And, as an industrial sector, we have already had approaches with the ministries to present concrete proposals for the simplification of procedures, the digitalization of processes, the improvement of efficiency and the reduction of discretion in the processing of files because it opens the door to corruption.
For example, the implementation of computer systems that allow the traceability of the processes and allow 100% online procedures, the use of unique windows for foreign trade operations, such as the agile import window (VAI), and the implementation of compliance or compliance systems within public entities to reduce corruption risks.