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IDB approves $5 million sector facility loan to improve Guatemala's trade opportunities

The Inter-American Development Bank today announced the approval of its first Trade Sector Facility project, a $5 million loan to Guatemala to improve the country’s capacity to negotiate for better foreign trade opportunities.

The operation is also the first Bank operation approved following the Quebec Summit of the Americas, during which the Bank pledged to deepen its ongoing activities in Latin America and the Caribbean to support the process of free trade in the Americas.

The IDB Trade Sector Facility is one of the several special fast-track, priority areas subject to a new policy for flexible lending instruments approved by the Bank in 2000.

The resources of the current loan will be used to strengthen the technical capacity of the Vice Ministry of Foreign Trade and Integration,* which will be enabled to better design, analyze, and evaluate trade policy and instruments. The program will also increase technical capacity to negotiate trade agreements more effectively, including current negotiations, such as the Free Trade Area of the Americas; bilateral trade agreements with other Latin American countries; preferential trade initiatives; and multilateral trade negotiations.

Mechanisms that allow the Vice Ministry of Foreign Trade to coordinate with other government agencies and to consult with the private sector will also be strengthened.

The loan is for a 25-year term, with a four-year grace period, at the variable interest rate, now 7.1 percent. Local counterpart funds total $1.25 million.

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