In the past three years, the Administration has moved to substantially increase U.S. aid levels for Guatemala from $18.3 million in FY84 to a proposed $149.7 million in FY88. Budgetary limits on the overall size of the U.S. foreign aid program may cause reductions in the proposed 1988 levels, however, independent of any choices related to the Guatemalan, situation. This issue brief provides basic information on the U.S. aid program and on the general situation in Guatemala. It also outlines major issues that have arisen in the aid debate.

As part of its overall trade strategy, the Bush Administration over the last year began negotiating bilateral free trade area (FTA) agreements with four regional blocs or countries. Negotiations on a U.S.-Central American Free Trade Agreement (CAFTA) involving Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua began in late January 2003 and are currently scheduled to conclude this December. While negotiators have reportedly made progress in a number of areas, efforts to formulate a framework for handling agricultural trade have been slow.