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Economy & Business - August 2003

GUATEMALA: Free-trade negotiating team dropped

In a surprise move, the government has changed the team that has been negotiating a free-trade agreement between Central America and the US. Out has gone the team leader, Salomón Cohen, his chief of staff, Francisco Pérez, and Marí­a Pascula, his assistant. 

The sacking of Cohen will please the other Central Americans. Cohen had been pursuing an independent line, which was noticeably more pro-US than the Central American consensus. In June, he suggested that Guatemala should dismantle more tariffs, faster, than the rest of the region to secure a better deal with the US. 

Even Cohen and the Guatemalans had doubts about some of the US suggestions for the FTA. A recent seminar on rules of origin for industrial and agricultural products heard a succession of Guatemalan experts argue that the US suggestions were equivalent to non-tariff barriers. The US seems particularly hostile to allowing any non-Central American inputs in sweeteners, chocolates, processed fruit and vegetables, shoes and leather goods. This policy will mean that almost all the products produced in the region's freezones, which invariably use some Asian inputs, will be excluded. 

The new chief Guatemalan negotiator is Guido Rodas. The economy minister, Patricia Ramí­rez, will also be more involved in the negotiations. There are now three of the scheduled nine rounds left. The final session is scheduled for the US in December. Issues such as agriculture still have to be tackled.

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