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An agreement on nearshoring and investment between the United States and Guatemala advances

by | Mar 24, 2023

The Guatemalan Minister of Economy, Dr. Janio Rosales, and Foreign Minister Mario Búcaro, Minister of Foreign Affairs, participated in a meeting on Monday, February 14th, with the United States delegation led by Lindsey Zuluaga, Principal Advisor for Economic Affairs of the Office of the Vice President of the United States, Kamala Harris.

Also participating in the meeting were: Ryan Gwinn, Central America Strategist, Office of Central American Affairs and Office of Western Hemisphere Affairs; Jonathan Fantini Porter, Executive Director, Association for Central America; Mark Lopes, President/COO of the Partnership for Central America; Ann Marie Brouillette, Director of Programs, Alliance for Central America; Danielle Orihuela, Program Manager, Alliance for Central America, Whitney Dubinsky from USAID and John Szypula from the US Embassy in Guatemala.

The joint agreement on nearshoring and investment between the United States and Guatemala will trigger increased foreign direct investment

The joint agreement on nearshoring and investment between the United States and Guatemala will strengthen the attraction of foreign direct investment. This result will come to fruition through the new Central America Forward Plan. The plan maps out a course of action that includes a series of investment events and economic tours in the United States and Guatemala. These activities will strengthen economic and trade ties between the two nations.

Likewise, the Government of Guatemala is working together with its country’s private sector within the framework of the plan Guatemala No Se Detiene (Guatemala Does Not Stop). Guatemala No Se Detiene has prioritized attracting foreign investment to generate more opportunities for Guatemalan workers. With this program, economic officials seek to increase the country’s competitiveness.

Guatemala-based companies can reduce supply chain risk

The global economy is highly interconnected, and disruptions in one region can significantly affect businesses and economic conditions in other regions. In particular, opportunities have been identified in the joint agreement on nearshoring and investment between the United States and Guatemala for companies with a nearshoring model in the textile, mining, medical device, and food safety sectors, among others.

During his speech, the Minister of Economy thanked the attendees for their presence and the support received from the United States. Also, he highlighted the work of Ambassador William Pop for his commitment to Guatemala. Ambassador Pop commented, “all these important advances and the achievements that we are having in economic matters are of great value. We need to continue working on actions to strengthen the Guatemalan economy. This will improve the living conditions of Guatemalans and will generate more prosperity, security, and a better future”.

The United States is helping transform Guatemala

The United States government has been a crucial part of this transformation. It has contributed to the economic development of Guatemala by building walls of prosperity by attracting more foreign investment. The companies that aim to supply important markets and implement a nearshoring model are significant ones.

From this account, progress has already been made in the joint agreement on nearshoring and investment between the United States and Guatemala. But, most importantly, it promotes the creation of jobs. In addition, it addresses the fundamental causes of migration within the framework of “good governance and good jobs.” With this in mind, it seeks to increase supply chain resilience through a strategy directed by the Guatemalan Ministry of Economy and the country’s Office of the Executive.

Alliances such as the Centroamérica Adelante (Forward Central America) initiative and Vice President Harris’ Call to Action are essential to future economic growth. They aim to strengthen the commitment of companies that invest in and support the comprehensive development of people and their families in the region.

The goal is to generate stable, long-term supply chains

The nearshoring model and the diversification of sources of raw materials and components is an essential additional step in the growth of companies. Achieving this will contribute to the long-term stability of corporate supply chains by investing in local suppliers and developing local production capacities.

For example, companies such as Walmart, Pricesmart, Nestlé, Millicom, Nextil, Target, and Yazaki have trusted in the productivity of the Guatemalan workforce and have benefited from the country’s strategic location.

As indicated, strategies to attract important companies have also been developed between the Ministry of Economy through PRONACOM and the Project Creating Economic Opportunities of USAID. This alliance has led to the establishment of Guatemalan operations by companies such as Yazaki, which has pioneered the country’s move toward more sophisticated industrial sectors with trained and qualified human resources.

During the meeting on the joint agreement on nearshoring and investment between the United States and Guatemala, various American Guatemala-based companies testified to the excellent business climate they have encountered while doing business in the country.

Contact LATAM FDI to discuss your foreign direct investment plans in Latin America.

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