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International Trade Law
Guatemala is the largest of the Central American Common Market (CACM) countries in terms of both population (11.5 million) and the overall size of its economy (with its gross domestic product [GDP] for 2004 estimated at $26 billion). Like El Salvador, however, its per capita income at $2,078.00 is in the midrange for the region. The distribution of income and wealth in Guatemala is highly skewed, with 80 percent of the population living in poverty, and two-thirds of them in extreme poverty. The high poverty levels in the country are reflected in its literacy rate, which at 55 percent is the worst in the region.
Agriculture continues to dominate the Guatemalan economy, accounting for 23 percent of GDP and 25 percent of exports. Although not reflected in official employment statistics, half the population is believed to be engaged in some form of agriculture, often at the subsistence level outside the formal economy. Traditional agricultural exports—coffee, sugar, and bananas—are still important export products, although their relative importance has diminished in recent years because of both declining prices and an increase in nontraditional exports, such as cut flowers and specialty fruits and vegetables.
Manufacturing accounts for 13 percent of GDP and 72 percent of merchandise exports. Official statistics are believed to underestimate the importance of manufacturing to the local economy, however, because they do not take into account maquila production (mostly textiles and apparel). Manufactured products include prepared food, clothing and textiles, construction materials, tires, and pharmaceuticals.
The United States is Guatemala’s largest trading partner, representing in 2003, 36 percent of Guatemala’s imports and 54 percent of exports. The other four CACM countries together represent the second largest market for Guatemala’s exports, receiving 25 percent of the total, according to sources interviewed.
Most of Guatemala’s freight movement is handled by its three major maritime ports: Santo Tomás de Castillo and Puerto Barrios on the Atlantic Coast, and Puerto Quetzal on the Pacific. La Aurora International Airport in Guatemala City is the only airport in the country equipped with full passenger and freight facilities, with the cargo area managed by a nonprofit private sector association, known as Combex-Im. Shipments by truck have been increasing with further integration of the CACM countries and as a result of free trade agreements among member countries and Mexico. Land transportation is hampered, however, by poor infrastructure and lack of security.
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