Commercial Association Agreement with Europe Represents More than 10 Niche Markets for Non Traditional Exporters

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The Guatemalan Exporters Association, AGEXPORT, analyzed the multiple opportunities opening for the Small and Medium Enterprises, SMEs, starting on June 29th, when the Commercial Association Agreement is signed.

Main importer of fresh fruits and vegetables; second largest consumer of fish worldwide; growing segment of gourmet food; over 38% of organic food consumers; and a 50% chance to buy green products here than in the U.S., are some of the opportunities the Commercial Association Agreement with Europe will bring to the country, according to an analysis done by the export sector of non traditional products, AGEXPORT.

As a small country, Guatemala should always underpin the global market. And, with the signing of this agreement, this country and Central America in general will have a solid legal basis for its trade relations with the region of 27 European countries, which will directly stimulate our economies providing more jobs, more production, more income and less poverty, said Engineer Francisco Menéndez, president of AGEXPORT.

According to the president of AGEXPORT, Europe is the second trade partner of Latin America, and in the case of Guatemala, is the third largest trading partner after the U.S. and Central America. In recent years, exports to Europe have been increasing and at the end of 2011, we exported the amount of U.S. $ 538 million.

The European Union is a market of 500 million, representing 7% of world population and a GDP per capita annual income above U.S. $30,000. Countries like Germany, United Kingdom, France and Holland are the largest importers of fruits and vegetables, and the 38% of Europeans who buy food from organic agriculture. These are some niche opportunities identified, but in general, all sectors have high chances, ensured Menéndez.

In order to seize these opportunities, in the short term there are plans to bring a delegation of European buyers to the show MANUFEXPORT 2012, which will take place on 12 and 13 July. On the other hand, the agricultural sector is planning trade missions to Spain, England and Holland, to identify new business opportunities. Also, in February 2013, Guatemalan fresh products will participate in Fruit Logistica, the organic sector will go to BIOFACH and the ornamental sector will participate in trade fairs in Germany. These actions are part of the importance the platform AGRITRADE is putting on the European region.

Definitely, Holland is one of the biggest markets for the ornamental sector and, although the prices    have fallen because of the crisis, Europe is a great buyer. This is why we are going to the fair Hortifair in Amsterdam, Holland, to be held from October 30 to November 2 and we will try to consolidate sales and make new customers in Europe, said the Coordinator of the Ornamental Commission of AGEXPORT, Briggit Obrock.

Between the achievements of this trade agreement, there is free access to over 95% of total tariff of Central America and Panama. And rules of origin in accordance with the conditions of production chains, as well as the long term relief for those sectors that felt threatened by European industry.

In the case of the Textile Sector, they reached 70 million units, 7 for Guatemala, to achieve in 5 years the 10 million requested because of a granted growth of 9%. Likewise, was achieved access for goods produced in free zones and special customs regimes. And, the Service Sector landed successfully in the financial services and professional services.

The Contact Centers & BPO sector in Guatemala, serves today France accounts and the investments from Spain, who have supported the growth of the sector. In the case of sustainable tourism, the European market is looking for new opportunities in unconventional tourism, such as agrotourism, ecotourism, cultural and archaeological tourism. This commercial relationship comes at a good time, when Guatemala is celebrating the change of the Mayan Era, which has generated much interest from the European market. Finally, in the case of software development and digital content, we have demands for services from Germany in partnership with GIZ and the consulting firm Cap Gemini, says Rubén Morales, Manager of the Service Sector of AGEXPORT.

The President of AGEXPORT, Francisco Menéndez, concluded by saying that many chances are coming but it is important to prepare as a country and region to take advantage. We have to work hard on the certifications of quality and safety as well as the green stamps. On the regional level, Central American governments and the private sector should advance the issue of Central American integration. This is one of the most important issues from the original objectives intended to agree negotiations, said Menéndez.

Additional data

The craft commission will have an active participation on the fairs Tendence and Environment in Frankfurt, Germany and, for the New World Crafts Fair 2012, they will focus on bringing buyers. The commission of furniture and forest products will strengthen the export niches for coffins to Italy. Miscellaneous manufactured articles will seek to increase the export of footwear, now made to Germany.

Challenges for Guatemala and the Region:
Approaching clients to national fairs and local participations.
Regulatory compliance, the certification of safety and plant (labeling, packaging, intellectual property, quality standards, technical standards, environment and others).
Managing and working on regional projects, using Al Invest, from the European Union.
Trade and competitiveness facilitation, improving the country indicators.

Guatemala: Indicators of Global Competitiveness 2012
Doing Business: position 97 of 183 countries.
World Economic Forum: position 84 of 142 countries.

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Marlene Martínez
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