Global Tax Alert (News from Americas Tax Center) | 3 December 2013

Association Agreement with European Union enters into force for Guatemala

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The trade pillar of the Association Agreement between the European Union and Central America (i.e., Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama) signed in June 2012 (the Agreement) is now in force for Guatemala as of 1 December 2013.1

The Agreement is comprised of three interdependent and fundamental pillars: political dialogue, cooperation and trade.

The trade pillar establishes a free trade area among both regions. The key benefits of the Agreement include:

  • Reduction or elimination of customs tariffs and non-tariff barriers to trade
  • Facilitation of trade in goods
  • Liberalization of trade in services
  • Promotion of economic regional integration regarding customs procedures
  • Effective, reciprocal and gradual opening of government procurement markets
  • Adequate and effective protection of intellectual property rights
  • Promotion of free and undistorted competition
  • Establishment of an effective, fair and predictable dispute settlement mechanism
  • Promotion of international trade and investment between the parties

Additionally, through this Agreement, all parties confirm their commitment to effectively implement and comply with the rules contained in several multilateral agreements of the International Labor Organization.

As a result, the trade pillar of the Agreement is now in force for the whole region (Honduras, Nicaragua and Panama as of 1 August 2013, Costa Rica and El Salvador as of 1 October 2013, and Guatemala as of 1 December 2013).

The political dialogue and cooperation pillars will enter into force when national parliaments of all 28 member States of the European Union ratify the Agreement and the Central American countries complete their internal approval process.


1. The Agreement was ratified by the Guatemalan Congresses on 13 June 2013 through Decree Number 2-2013. The latter was signed by the President on 27 June 2013 and published in the Official Gazette on 2 December 2013.

For additional information with respect to this Alert, please contact the following:

Ernst & Young, S.A., Guatemala City
  • Manuel Ramirez
    +502 2386 2400
Ernst & Young, S.A., San José, Costa Rica
  • Alexandre Barbellion
    +506 2208 9800
  • Rafael Sayagues
    +506 2208 9880
Ernst & Young LLP, Latin American Business Center, Houston
  • Priscila Maya
    +1 713 750 8698

EYG no. CM4005