The free trade agreement between Israel and Guatemala came into force today after being signed by Minister of Finance Bezalel Smotrich. Guatemala will reduce customs duties on Israeli food and agricultural products, with a full exemption for plants, olive oil, and matza, and reduced duties on seeds, nuts, nut products, halva, and wine. Guatemala will cancel or gradually reduce duties on Israeli industrial products such as drugs, cosmetics, plastics, ceramics, glass, jewelry and diamonds, iron and steel, electronic machines and components, and medical equipment.
For its part, Israel is reducing duties and opening up to imports of products from Guatemala, among them agricultural products such as meat, flowers and decorative plants, nuts, and vegetables. Duties have been abolished altogether on bananas, spices, forest fruits, and halva, and on industrial products including plastic and rubber products, ceramics, electronic machines and components, and jewelry.
Guatemala thus joins the list of Latin American countries that have free trade agreements with Israel: Mexico, the Mercosur countries (Brazil, Argentina, Uruguay, and Paraguay), Panama, and Colombia. Even beforehand, Guatemala was for years one of the countries most friendly to Israel, and it was one of the first to move its embassy to Jerusalem.
In October, Guatemala’s previous foreign minister, Mario Bucaro, expressed unreserved support for Israel at the UN General Assembly. Since January 15, a new government has been in power, headed by President Bernardo Arévalo, who studied at the Hebrew University of Jerusalem while his father was Guatemalan ambassador to Israel.
Guatemala has the largest economy in Central America in terms of population – 17 million – and GDP – $95 billion in 2022 according to the World Bank, with average annual growth over the past decade of 3.5%. On the other hand, the country has a high rate of poverty (55.2%) and a black economy estimated to be 49% of GDP, with a high rate of emigration and extensive dependence of households on transfer payments.
Published by Globes, Israel business news – en.globes.co.il – on February 29, 2024.
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