Guatemala - International trade

The United States, Latin America, and Europe are the most frequent destinations for Guatemala's exports, composing 51.5 percent, 26.6 percent and 11.3 percent

Trade (expressed in billions of US$): Guatemala
Exports Imports
1975 .624 .733
1980 1.520 1.598
1985 1.057 1.175
1990 1.163 1.649
1995 2.156 3.293
1998 2.582 4.651
SOURCE: International Monetary Fund. International Financial Statistics Yearbook 1999.

of the export market respectively in 1998. In addition to its membership in the Central American Common Market trade group, Guatemala also holds free trade agreements with Panama, Chile and the Dominican Republic. Guatemala exports a wide variety of products with a mainly agricultural base, while it imports goods of an industrial nature, including machinery, road vehicles and apparel. This combination of exports and imports reflects Guatemala's position as a developing country that must rely partially on outside advancements to sustain and promote industrial activities within its own economy. As Guatemala becomes more developed and expands its manufacturing sector, it should depend less on industrial imports from the United States and other developed nations.

Guatemala has consistently imported more than it has exported over the past 25 years, but this trend has sharpened over the past 5 years or so, with imports surpassing exports by significant margins and resulting in a considerable trade deficit . In 1998, Guatemala exported only US$2.582 billion worth of goods while importing US$4.651 billion worth. Increasing imports can be a sign that the Guatemalan economy is strong enough to afford large quantities of goods from abroad, but they can also throw off the stability of the nation's trade regime if not matched by growth in exports.

The unprecedented level of Guatemala's imports in 1998 might also be a result of the end of la violencia , or the civil war, in 1996. The political space created by the peace agreement may have encouraged deeper interaction between Guatemala and the global market and may have opened up new trade opportunities with economic players who had previously withheld their trade partnership as a political gesture.

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