Central America-Dominican Republic Free Trade Agreement

The Central American Free Trade Area -Dominican Republic (CAFTA-DR) is a treaty that removes tariffs and promotes trade between the United States and a number of Central American nations such as Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. The Dominican Republic, an island state in the Caribbean, was then added to the agreement. CAFTA-DR requires that tariffs and quotas be managed in a transparent, non-discriminatory, market-compliant and trade-based manner that allows importers to make full use of import quotas. Each Member State will eliminate export subsidies for agricultural products destined for another cafta-DR country. [9] In January 2002, U.S. President George W. Bush made CAFTA a priority and won congressional power to negotiate. Negotiations began in January 2003 and an agreement was reached with El Salvador, Guatemala, Honduras and Nicaragua on 17 December 2003, as well as with Costa Rica on 25 January 2004. In the same month, negotiations with the Dominican Republic for CAFTA membership began. Since the U.S.-Dominican Free Trade Agreement (CAFTA-DR) for the United States and Nicaragua came into force on April 1, 2006, Nicaragua`s exports to the United States have increased by about 70%. The other signatories to the agreement are Costa Rica, the Dominican Republic, El Salvador, Guatemala and Honduras. CAFTA-DR creates the second largest U.S. export market in Latin America, behind Mexico.

CAFTA-DR strengthens the rights and conditions of workers in the region by imposing the protection of the work to which their workers are entitled under the national laws of the federal states. These include the first conflict under a free trade agreement to ensure that Guatemalan workers can exercise their rights under Guatemalan law. We remain committed to helping Guatemala achieve this and achieve the benefits that flow from the application of the internationally recognized Workers` Rights Act. The main provision of THE CAFTA-DR called for the immediate abolition of certain tariffs and others over a period of 15 to 20 years. Tariffs on more than half of U.S. agricultural exports were eliminated as soon as the agreement came into force. The main U.S. exports to CAFTA-DR countries were petroleum products, machinery, cereals, plastics and medical devices. Major U.S. imports included coffee, sugar, fruits and vegetables, cigars and petroleum products. Other CAFTA-DR provisions are expected to enable the United States to improve access to Central American markets in the banking, telecommunications, media, insurance and other service sectors, as well as procurement by the Central American and Dominican governments.

The trade agreement included measures to ensure transparency and efficiency in all transactions and to protect workers` rights and the environment. The official start of the negotiations was announced by the U.S. Trade Representative and the ministers of Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua on January 8, 2003 in Washington D.C. and negotiations between the United States and four of the Central American countries were concluded on December 17, 2003. On January 25, 2004, an agreement was reached between Costa Rica and the United States. On 18 February 2005, the seven CAFTA members signed two agreements to facilitate the transposition of environmental provisions into their free trade agreement. Chapter 17 (Environment) of the Dominican Republic – Central America – U.S. Free Trade Agreement (D.R.

– CAFTA) states that “each party ensures that its laws and policies provide for and promote a high level of environmental protection and strive to further improve these laws and policies.” The agreement establishes an Environment Council (ECJ) to strengthen implementation and review progress made in this chapter.