International trade opportunities between the United States and Guatemala - Essay Example

In the years between 1950 and 1990, the U.S. supplied the Guatemalan army with guns, military training, and financial resources. This period in Guatemalan history is filled with much political conflict and civilian bloodshed. Despite the growing economy, Guatemala is still a very poor country with 56% of the roughly 12 million inhabitants living below the poverty line. During the civil war as many as 1 million people left Guatemala and took refuge in the United States. Today remittance from Guatemalans working in the U.S. brings an amount of money to the country equalling the value of two-thirds of all exports (Guatemala, 2008).

Half of the work force in Guatemala participates in the agriculture industry. The main exports are coffee ($473 million per year), fruits and nuts ($367 million per year), and sugar ($261 million per year) (International Trade Centre, 2005). Textiles, petroleum, perfumes, and other foods including plantains make up most of the other products exported from Guatemala. The manufacturing sector has been an important part of the international export industry. Clothing and textile fabrics account for a large proportion of exports as well.

The United States is the recipient of nearly $1.1 billion worth of all of these export items each year. In return, Guatemala imports from the United States more than $676 million each year of grains including wheat and corn, soybeans, meats and animal fats, pharmaceuticals, paper products, and communications equipment. The United States provides over 34% of all Guatemalan imports and takes in over 42% of all its exports, making the U.S. one of its most important trade partners (Guatemala Times, 2008).

Current barriers to trade with Guatemala include past allegations of corruption from government officials. Confidence levels of investors may have been weakened by concerns about security in this historically war torn Central American country. However, Guatemala is