Peruvian producers are against the import quotas that were approved in the trade agreement between the two countries, arguing that sugar production in Guatemala is subsidized.
Monday, May 13, 2019
The dispute goes back several years, since the imposition of tariffs on Guatemalan sugar is the reason why the entry into force of the trade agreement was postponed, which had been signed by both countries in December 2011.
After many delays in February this year, Guatemalan authorities announced that the negotiations with the South American country were almost finished, so the agreement would soon enter into force.
Regarding the disapproval of Peruvian sugar manufacturers, Larepublica.pe states that "... Last April 9 was classified as confidential information the document signed by the deputy minister of Foreign Trade of Peru and his counterpart in Guatemala regarding amendments to the FTA between the two countries, which according to information collected by growers, agreed an entry quota of 120 thousand tons of sugar per year to Peru, a figure that would increase to 400 thousand tons over 10 years. This agreement is objected to by the sugar manufacturers as a harmful measure for the sector."
The article published on May 8, 2019 adds that "... According to the main guilds and sugar companies, this measure is unfair, since Guatemalan sugar production has protectionist policies that allow them to export their surplus production at very low prices, which would affect local producers.” See "Sugarcane producers demand that Congress modify the FTA with Guatemala".
Regarding the statements made to the Guatemalan sugar sector, Luis Miguel Paiz, general manager of the Guatemalan Sugar Association (Asazgua), told Elperiodico.com.gt that "... sugar producers in Guatemala have no subsidies of any kind. Moreover, before the World Trade Organization (WTO) there is currently a consultation process for the case of subsidies that the government of India grants to its producers.”
Paiz added that "... Guatemalan sugar mills are known worldwide for their efficiency and productivity. On the basis of information from the Ministry of Economy (Mineco), a sugar quota was agreed with the Peruvian government.”
Because Guatemala is the only country in the region still negotiating an FTA with the Asian country, sugar producers estimate that they have stopped selling about 400,000 metric tons.
Months ago it was reported that Guatemalan authorities would travel to South Korea in the first week of October, with the aim of restarting the Free Trade Agreement (FTA) negotiations.
Both countries agreed to increase from 60,000 to 125,000 tons the export quota of Guatemalan sugar that enters the Asian nation free of tariffs.
In the framework of the Second Meeting of the Administrative Commission of the Free Trade Agreement between Guatemala and the Republic of Taiwan, held in Taipei, Taiwan on July 8 and 9, both parties agreed to eliminate tariffs for the entry of certain products, informed the Ministry of Economy of Guatemala.
According to Guatemalan sugar producers, Africa and New Zealand are two of the markets that in recent years have generated growth opportunities for exports of the sector.
According to figures from the Bank of Guatemala, sugar exports to New Zealand increased from $11 million from January to August 2017 to $33 million for the same period this year.
Producers from the Guatemalan sugar industry have not accepted the Peruvian proposal.
Although the Guatemalan government has said that agreements have been approved by Peruvian authorities, representatives from the sugar industry indicate that negotiations related to this topic are not over yet.
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