The cuts to the global economy that the International Monetary Fund (IMF) and the World Bank (BM) associated with the US tariff policy, the effect it will have for Guatemalan exports in the near future and a low execution in the different public investment programs, They forecast a conservative scenario of economic activity for Guatemala.
Although the effect is macro, there may also be a micro effect, on the side of personnel cut in those export business activities that depend on businesses with the United States and that can be affected or for the transfer of companies to other countries that do not have the tariff quota, It was explained during a forum.
And although the entry of family remittances have registered a double digit growth in the first quarter of the year, It is uncertain about the near future that can impact internal consumptionit was exposed.
Complicated situation
Deputy Julio Héctor Estrada Domínguez, president of the Finance Commission of the Congress of the Republic, declared that everything depends on the impact that is generated by the uncertainty that has been generated in Guatemala exports to the United States, the decisions adopted by companies regarding their investments, by the international tariff movement in the United States.
On the other hand, he mentioned that it will also depend on how Guatemala can take advantage of that opportunity, to be able To be able to achieve a negotiation to eliminate Guatemala from the imposition of 10% of the Aranche.
“If you get to take that opportunity, there may be the need to promote legislative actions, The authorities have been summoned to know the work plan and how can you adapt to what can be done in Congress”He said.
He recalled that for the fears of Guatemalan migrants, this year he started with a strong “avalanche” family remittance, but it is certain that there will be a contraction, which will be the following year and when shipments weaken, Economic growth for this year will depend on consumption, and how this risk is handled by the administration of President Donald Trump.
He added that there is the component of public investment and the budgetary execution of the central government, that when there is an expansive budget with a fiscal deficit of 3.5% in relation to the Gross Domestic Product (GDP) that, when executing at local and national scale, represents between 1% and 1.5% additional because it is a lawsuit adds, but if it does not execute ”It stays in reserve and does not add in the economy “.
“Drastic measures have to be taken, there are proposals, there are ideas, but it depends on the Executive to complete the procedures and that acceleration of public spending has to occur to exist local investment and aggregate demand”
Julio Héctor Estrada Domínguez, president of the Finance Commission
The IMF estimates a 4.1% growth for Guatemala, but the BM adjusts it towards the decline in 3.5%, so according to the parliamentarian “that difference can be in the low execution in public investment since in the first four -month period there is no acceleration in public works compared to last year, despite having a higher budget,” said Estrada Domínguez.
“Drastic measures have to be taken, there are proposals, there are ideas, but It depends on the Executive to complete the procedures and that acceleration of public spending It has to occur to exist local investment and aggregate demand, ”he said.
RESULTS URGEN
The Business Commission of International Negotiations and Trade (CENCIT) of the Organized Private Sector, urged the competent authorities to present the concrete and verifiable results at the political and technical level, of high level that are aimed at resolving long -term non -tariff barriers indicated by the Office of the United States Commercial Representative (USTR, for its acronym in English).
“The resolution of these barriers is essential to initiate a negotiation process that allows to solve the tax tariffwhich is seriously affecting the competitiveness of our products in the US market, at an approximate cost of US $ 1.5 million per day, ”says a Cencit statement.
It is indicated that the UST has received 18 formal proposals from different countries and only for this week 34 meetings are scheduledto strengthen those bilateral commercial alliances.
The statement adds that these actions demonstrate a proactive commitment to resolve commercial disputes and preserve preferential access to the US market.
He reiterates that Guatemala cannot be left behind, so it is urgent that the Government, through the Ministry of Economy (Mineco), a high -level bilateral meeting is requested with the USTR, in order to present concrete advances in the elimination of non -tariff barriers and with it, according to Cencit, negotiate the exemption to the tariff measurement imposed.
EFFECT TO EMPLOYMENT
The 10% tariff can negatively and positively impact workers. Adolfo LACS Palomo of the Trade Union Federation of Banking and Insurance Employees (FESBS) declared that in the case of Nicaragua in which the tariff quota was 18% some companies can settle in Guatemala by having 10%, but that in Mexico they do not exist and can migrate.
“The most important issues are not being given here in Guatemala but in the United States for conflicts and great players, so you have to wait if the measure is temporary or ultimately”
ADOLFO LACS PALAMO, trade unionist FESBS
In his opinion for workers there may be a “neutral” effect That defined that there may be companies that can close operations, some reduce operations and reduce production, but at the same time also new companies will also be installed, so there would be no effect on the number of places.
“The most important issues are not being given here in Guatemala but in the United States for conflicts and great players, so you have to wait if the measure is temporary or ultimately,” concluded the trade unionist.
New negotiation fronts
The authorities of the Ministry of Economy went to a summons with the Foreign Relations Commission of the Congress of the Republic, where they explained that they are advancing with the work plan to solve eight non -tariff barriers with which they will seek to negotiate so that the United States reduces or eliminates the 10% tariff in force at the moment.
However, they also stated that there is an inter -institutional table in search of opportunities in other markets worldwide, and that they are not necessarily related to the imposition of the tariff, since this instance was formed before. They have received interest to market with United Arab Emirates (Agricultural Products) and Türkiye (Manufacturing and Agricultural Products).
“Negotiation fronts are being seen, this had already been working before, not specifically when the issues with the United States began and this is to diversify the market and find new opportunities for both MSMEs and SMEs”, Said Ligia Hernández, advisor to the Vice Ministry of Integration and Foreign Trade.
Hernández too He said that among the possibilities is also Japan and the Caribbean community (Caricom)but they are still in analysis.
Meanwhile, Valeria Prado, Vice Minister of Investment and Competition stated that the negotiations for the imposition of the tariff are leading the Ministry of Foreign Affairs.
He added that, in the case of processing, which is one of the technical barriers mentioned by the United States, referring to extensive deadlines to issue health records in the country, They have chosen to simplify and digitize systems to expedite processes.
The deputies were skeptical about work and requested a circumstantial report on the plan to solve these barriers. The head of the Ministry of Economy, Gabriela García did not attend the citation, since she is traveling in PErú, where he signed a free trade agreementas justified by the vice ministers that reached the summons.