US Strengthens Central American Ties with New Trade Agreements with Guatemala and El Salvador
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the United States announced reciprocal trade agreements with Guatemala and El Salvador on November 13,2025,poised to significantly reduce tariffs and bolster economic partnerships in the region. The agreements, detailed on the White House website, represent a commitment to deepening the alliance established under the 2006 Dominican Republic-central America Free Trade Agreement (CAFTA-DR).
The move signals a strategic effort to enhance bilateral trade and reward both Central American nations for demonstrating a commitment to improving the trade relationship. The US will eliminate reciprocal tariffs on goods that cannot be readily produced domestically, as well as on products already covered under CAFTA-DR, such as textiles and clothing.
Guatemala Poised for Tariff Reductions
According to carolina Palma, a Tax and Legal Services Partner at Deloitte Marketplace Central America, Panama and the Dominican Republic, the impact on Guatemalan exports will be substantial.”It is important to highlight that more than 70% of the products that Guatemala exports to the United States will have zero tariffs; Regarding the remaining 30%, most products will have a 10% tariff, which is the minimum tariff applied to the rest of the countries in the world.”
The US commitments secured from Guatemala focus on dismantling non-tariff barriers to trade. These include:
- Streamlining regulatory approvals for US exports, particularly in the pharmaceutical and medical device sectors.
- Eliminating restrictions on remanufactured goods and adopting American automotive standards.
- Ensuring access for US agricultural products to the Guatemalan market, with acceptance of US regulatory oversight and certifications.
- Strengthening intellectual property protection and addressing concerns raised in the Office of the United States Trade Representative’s Special 301 Report.
- Facilitating digital commerce and avoiding taxes that could impact US digital services.
- Maintaining best practices in customs procedures.
El Salvador Commits to Trade Clarity and Regulatory Reform
El salvador has also pledged critically important reforms to facilitate increased trade with the US. A partner at Deloitte noted that a key commitment from El Salvador is to prioritize transparency in its regulatory processes. “el Salvador acquired several commitments,one of them is to publish the regulatory measures,including the proposed texts,conduct public consultations on said measures and announce the regulatory policy priorities that are being developed,modified or eliminated.”
Specific commitments from el Salvador include:
- Simplifying regulatory requirements and approvals for US exports, focusing on pharmaceuticals and medical devices.
- Removing import restrictions on remanufactured goods and accepting american automotive standards.
- Ensuring access for US agricultural products through US regulatory oversight and acceptance of US certifications.
- Advancing international intellectual property treaties and providing transparency regarding geographical indications for products like cheese and meat.
- Eliminating barriers to digital and services trade and avoiding discriminatory taxes on digital services.
- adopting good regulatory practices and correcting industrial subsidies that could distort trade.
the agreements are currently awaiting formal signing, but represent a significant step forward in strengthening economic ties between the US and its Central American partners. These developments underscore the ongoing evolution of trade relationships in the region and the commitment to fostering mutually beneficial economic growth.
Pro tip: Keep an eye on the implementation of these agreements, particularly the dismantling of non-tariff barriers, as this will be a key indicator of their success.
Reader question: Will these agreements impact smaller US businesses looking to export to Central America? – Yes, the streamlined regulatory processes and reduced tariffs are designed to benefit businesses of all sizes.
