The Belize-Guatemala PSA was signed in 2006 and entered into force in 2010. It is the first bilateral trade agreement signed by Belize. Its objective is to strengthen the economic and political relations between Belize and Guatemala by facilitating, promoting, diversifying and expanding trade in goods that fit the origin criteria outlined within the Agreement. In accordance with this objective, the PSA primarily focuses on:
- Granting preferential margins on tariffs, eliminating non-tariff barriers to trade and establishing clear technical regulations and sanitary and phyto-sanitary measures;
- Promoting investments through the establishment of a legal framework aimed at ensuring legal certainty;
- Facilitating land transportation of goods through the elimination of discriminatory transit barriers; and
- Establishing an efficient, transparent and effective system to resolve trade disputes.
The agreement is only partial in scope, as its name suggests, meaning it allows for reciprocal (two-way) trade between Belize and Guatemala on a small number of goods. The Agreement covers 150 specified tradable products between both Parties; seventy two (72) products originating from Belize and seventy eight (78) products originating from Guatemala.
Tariff concessions refer to the reduction or elimination of import duties imposed on the importation of a good included in the list of goods covered by the Agreement when such good satisfies the origin criteria as spelt out in the Agreement. The PSA specifies for the elimination and or reduction of tariffs applied to these products based on three categories: A, B and C.
Category “A”: Parties are to eliminate tariffs by 100% or reduce them by 50% immediately. This means that when the Agreement entered into force, Guatemala granted Belize immediate preferential (duty free, in many instances) access to their market. All seventy two (72) Belize originating products fall under this category. This allows Belize to sell products at preferential tariff margins to Guatemala such as, tilapia, yellow maize (up to 20,000 MT at 0% duty), black beans (up to 875 MT at 0% duty), rice, and toilet paper, doors, windows, wooden and wicker furniture, among others.
Category “B”: Belize is to eliminate tariffs on products originating from Guatemala by 50% or 100% in three (3) equal annual cuts. Seven (7) Guatemala originating products fall under this category.
Category “C”: Belize is to eliminate tariffs on products originating from Guatemala by 50% or a 100% in five (5) equal annual cuts. Eight (8) Guatemala originating products fall under this category.
The list of products for which both Belize and Guatemala grant preferential tariffs on can be found in Annex I & II of the Agreement.
Expanding Trade with Guatemala
Belize has a trade deficit with Guatemala. i.e. Belize imports more from Guatemala than we export. There are tremendous export opportunities to be explored from the PSA with Guatemala. Data shows that Guatemalan imports products that Belize can seamlessly supply on a predictable and consistent basis. These products include:
- Orange juice (in all its forms)
- Kidney beans
- Fresh fish
- Livers and roes
- Frozen shrimps and prawns
- Fish crustaceans
- Live poultry
Guatemala currently imports the above products from the United States, Nicaragua and Ecuador. Noting that the provisions of the PSA provides for efficient land transportation, and based on Belize’s proximity to Guatemala, it is imperative that Guatemala be viewed as one of Belize’s export markets.
The Agreement provides for investment promotion between both countries. It ensures that both countries maintain a favourable investment climate to attract investment. Emphasis on the discouragement of anti-competitive business practices is enshrined in the chapter on Investments. The agreement also contains provisions to ensure that investments, of either party, are not nationalized, expropriated or subjected to measures that would nullify their value, or have effects equivalent to nationalization or expropriation. It also contains provisions for the settlement of disputes between an investor and the country in which the investment is made, concerning any breach of obligations under the Agreement.
Chapter Ten of the PSA covers land transportation with the objective of facilitating the trade of goods between Belize and Guatemala. The chapter also contains key provisions on freedom of transit, in which vehicles and their drivers should be allowed to transport between the countries freely, without any hassle. Transportation in the chapter does not refer to local load or cabotage; it is limited to the transportation of goods originating in Belize and Guatemala only.