US embassy cable - 05GUATEMALA229

UNCLAS  GUATEMALA 000229 
 
SIPDIS 
 
 
USTR FOR CHARLIE HOOKER 
 
E.O. 12958: N/A 
TAGS: ETRD, WTO 
SUBJECT: WTO SERVICES NEGOTIATIONS: ACCESS PRIORITIES FOR 
GUATEMALA 
 
REF: SECSTATE 270998 
 
1. Guatemala provides national treatment for most services 
providers, as reflected in the limited number of 
nonconforming measures for Guatemala listed in the agreed 
text of the Central America Free Trade Agreement (CAFTA). 
Exceptions to national treatment include maritime 
transportation and financial services.  In the latter 
category, banks may create branches but must meet capital 
adequacy ratios based on the branch's own balance sheet and 
are given a shorter period than domestic banks for remedying 
capital shortfalls. In addition, insurance companies must 
incorporate locally and may not open branches (to be phased 
out under CAFTA).  Otherwise, the principal obstacle to the 
U.S. services sector is in the standard array of professional 
services where service providers must meet domestic academic 
and certification criteria.  CAFTA calls on parties "to 
develop mutually acceptable standards and criteria for 
licensing and certification of professional service 
suppliers." 
 
2. Branches and subsidiaries of U.S. firms provide 
professional services in a wide variety of areas such as 
banking, insurance, telecommunications, accounting and 
advertising, but a number of other areas are largely 
untouched, reflecting the country's relatively low level of 
development, a history of internal conflict, and a 
post-conflict environment of violent crime that dissuades new 
investment and associated services.  The potential interest 
of various sectors to U.S. suppliers should increase to the 
extent that CAFTA attracts new investors who will seek high 
quality U.S. services and as the security environment 
improves. 
 
3. The list of services below is keyed to reftel and includes 
an access priority ranking (1 - 5) and a market openness 
ranking (high, medium or low).  Explanatory notes follow 
rankings, as appropriate. 
 
--Legal services (4, medium) - Non-discriminatory 
educational, exam and bar association requirements. 
--Architectural services (5, medium) 
--Urban planning and landscape architecture services (5, 
medium) 
--Computer and related services (3, high) 
--Research and development services (5, high) 
--Real estate services (4, medium) - A history of clouded 
land titles makes consistent enforcement of property rights 
difficult and dissuades real estate sector investment. 
--Advertising services (3, high) 
--Rental leasing services (5, medium) 
--Market research and public opinion, polling services (4, 
medium) 
--Management consulting services (3, high) 
--Technical testing and analysis services (4, high) 
--Services incidental to agriculture, hunting, fishing and 
forestry (3, medium) 
--Services incidental to mining (3, medium) - Recent violent 
protests and interference in a major gold mining project are 
a reminder that mining has historically been a sensitive 
issue in Guatemala. 
--Energy services (2, high) - Recent efforts by the 
semi-autonomous Human Rights Ombudsman to oppose subsidy 
reductions and rate structure rationalization diminish 
investor confidence in the sector. 
--Services incidental to energy distribution (2, high) 
--Placement and supply services of personnel (4, medium) 
--Investigation and security (2, high) 
--Related scientific and technical consulting services  (4, 
high) 
--Maintenance and repair of equipment (3, high) 
--Building-cleaning services (4, high) 
--Photographic services (4, high) 
--Packaging services (3, high) 
--Printing, publishing (3, high) 
--Convention services (3, high) 
--Courier services (2, high) 
--Telecommunication services (2, high) - Allegations of 
interconnection abuse by a dominant carrier and a weak 
regulatory institution detract from an open legal framework. 
--Audiovisual services (4, high) 
--Construction and related engineering (3, medium) 
--Distribution services (4, medium) - CAFTA commitment to 
eliminate exclusive distribution contracts grandfathered by a 
1978 law. 
--Educational services (2, high) 
--Environmental services (2, high) - Will need to comply with 
the CAFTA environmental chapter. 
--Tourism and travel-related services (1, high) - High crime 
rates continue to plague the tourism industry.  However, the 
GOG is actively recruiting foreign investment into this 
sector. 
 
 
--Recreation and sporting services (2, high) - Linked to 
tourism. 
HAMILTON 
 
 
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