Cotton in Guatemala – Case Study

  • In the 1980s, 75% of Guatemala’s cotton crop was exported. The income generated was used to buy pesticides, machines, and equipment for future crops.
  • However, if Guatemala had processed its raw cotton into finished clothes, and then exported these instead, its export earnings would have been greater.
  • More significantly, only 1% of the land devoted to cotton production would have been needed to generate the same income, leaving Guatemalans able to grow other crops and open new markets.
  • Instead, WTO policies made this difficult. Guatemala was tied to exporting raw cotton until competition from other countries ended production completely in 2005.
  • TNCs now import raw cotton into Guatemala and use its workforce to produce cheap T-shirts for export.