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Daily News - 24 July 2002

Mejia meets Bush
President Hipolito Mejia met President Bush for about 30 minutes yesterday at the White House. The meeting was to last 10 minutes but was extended for another 20, as reported in El Caribe and Diario Libre. The informal encounter took place when President Bush walked into a meeting Mejia was having with National Security Advisor Condoleeza Rice. 
“President Bush has a full understanding of the Dominican reality and I do not have any doubt that our relations will significantly improve in the coming years,” Mejia told the press at the end of the meeting. 
The three-day visit to Washington sought to open doors for talks that could lead to a free trade agreement with the United States.
He said that Hugo Guiliani Cury, the newly-appointed Dominican ambassador to Washington, would hold follow-up talks with US Trade Representative Robert Zoellick. The DR seeks equal treatment as that the US may grant to Central American nations. 
When asked if given the position of the US Congress the request for opening trade agreement talks was not mission impossible, Mejia responded: “I don’t miss out on anything because I am a planner. I believe you have to be present during all the steps, be ready for the least expected moment, that is my strategy.” 
In line with the trade agreement objective, President Mejia visited the Department of Commerce where he met with Robert Zoellick for 35 minutes. 
During his visit to the White House he was accompanied by Minister of Foreign Relations Hugo Tolentino Dipp, fashion designer Oscar de la Renta; Technical Secretary of the Presidency Rafael Calderon; appointed ambassador Hugo Guiliani Cury; outgoing ambassador Roberto Saladin; president of the Dominican Telecommunications Institute Orlando Jorge Mera; businessmen Jose Clase, Manuel Enrique Tavares, Ramon Menendez, Ramon Baez, protocol director Carlos Guzman, spokesman for the President Luis Gonzalez Fabra, Mayor General Carlos Luciano Diaz Morfa. 
At the White House, Mejia also met with US Secretary of State Colin Powell. 

Meeting at the OAS
During his visit to Washington, President Mejia met with Adjunct Secretary General of the Organization of American States Luigi Einaudi and Washington-based OAS ambassadors. During the meeting he urged the US, France and Canada to show greater interest in the economic and social crisis that affects Haiti. He requested their assistance to help the Dominican Republic with the heavy burden of Haitian migration. 
Spokesman for the President, Luis Gonzalez Fabra told El Caribe, that during the meeting President Mejia emphasized that the Dominican Republic, Panama and Belize need to receive equalitarian trade treatment from the United States.

Understanding recent trade moves 
Pavel Isa, an economic analyst, writing for El Caribe, focuses on the recent changes in Dominican trade policies that seek to strengthen Dominican-US relations. More than actual steps towards the signing of a free trade agreement, in his writing Isa seems to imply that the changes in trade policy respond to a public relations strategy that seeks psychological advantages. 
Isa says that the seeking of a free trade agreement with the United States contradicts the position maintained up to now at World Trade Organization (WTO) and Free Trade Agreement (FTA) levels. 
Isa points to alliances made with other developing countries such as Indonesia, Tanzania, Egypt and Honduras under the WTO umbrella. And through FTA talks with the Andean and Caricom blocks seeking to consolidate leverage for a better negotiating position and differentiated trade treatment for less developed countries. 
Isa admits that the US has discouraged any special treatment for developing countries. He also points out that the Dominican Republic would be at a major disadvantage if it sat down to bilateral trade talks with the United States. 
So what could be on the minds of the new strategists? 
He said it is very unlikely that Central America will achieve a free trade agreement with the US before the FTA is passed, implying that new lobbying efforts are futile.
But he speculates that what could be behind the trip to Washington, D.C. is the unfolding of efforts to accomplish at least three new covert objectives, more in line with psychological and public relations messages than concrete achievements. The new objectives would be: 
1) To send out a message to investors that the country will not isolated.
2) To calm down US government officers that are irritated with the Dominican Republic for its alignment with other less developed countries.
1) To calm down businessmen in the Dominican Republic, especially free zone manufacturers, that fear the DR could be at a disadvantage now that Central America can tout the opening of talks for the signing of a free trade agreement with the United States. 

More US loans for the DR
The US Eximbank has approved a US$960 loan portfolio for development projects in the Dominican Republic, as reported in El Caribe. Loans would fund telecommunications, housing, power, transportation, petroleum and manufacturing projects. Mejia met in Washington with the acting president of the organization, Eduardo Aguirre. 
New Eximbank loans portfolio for the Dominican Republic include: 
US$23.9 million for the construction of housing projects implemented by the Instituto Nacional de la Vivienda. 
US$54.1 million for the Pan American Games. 
US$13.1 million for the construction of a public hospital in the Cibao. 
US$22 million for the purchase of coastguard ships to be used to combat drug smuggling, illegal migration surveillance and rescue of persons at sea.

Agreement with Smith Enron
Diario Libre reports that the government reached an agreement with Smith-Enron to end now the contract that expires in 2015. The Dominican government sought out of the contract that obliged the country to pay US$4.5 million a month, regardless of whether the plant was in operation or not.
The government agreed to pay the company US$11 million tomorrow, US$20 million in 60 days when another contract is signed and another US$11 million in December. The company also agreed to turn on the plant in mid August. The operation of the Smith-Enron power plant in Puerto Plata is expected to put an end to long power outages that affect the Cibao region.

Fixing the 1.5% tax on gross sales
Minister of Finance Jose Lois Malkum confirmed that the Mejia government has sent a bill that would fix the 1.5% duty on gross sales to Congress. Businesses have to pay the 1.5% minimum tax on gross sales every month, regardless of whether the sales are cash or credit, and regardless of whether they have earnings or losses in the month.
The duty, part of the 2001 tax reforms package, would have expired in 2003. Malkum denied the government would increase this duty to 2.5%, or that the ITBIS tax would be increased from 12 to 14%. 

Urbaser sues municipality
Urbaser, the contractor for garbage collection in eastern Santo Domingo, is suing the city government for RD$540 million in damages, double that they say is overdue in receivables. Urbaser demands payment before resuming its garbage collection services.

Mejia tied with Fernandez
President Hipolito Mejia and former President Leonel Fernandez would be tied if presidential elections were held today. A Rumbo-Gallup poll placed Mejia with 46.5% and Fernandez with 46.1% in the preferences of voters. 
The poll showed that the lower income voters prefer Mejia to Fernandez, 47.3% versus 45.5%. The affluent favor Fernandez, 50.8% to 41.3%. In the middle-income sectors, Fernandez obtained 47.8% versus 43.9% of Mejia. 
The younger segment of the population prefers Fernandez. Fernandez received 58.7% of the vote of those 18-24 years, and 48.6% of those 25-39 years old. Those 40-54 favor Mejia with 52.8% of the vote. 
By gender, 49.6% of the men prefer Mejia, 49.4% of the women favor Fernandez. 
When running against Jacinto Peynado (PRSC), President Mejia would receive 52.1% of the vote versus 36.3% of Peynado. The survey also showed that the trend is for 70% of the PRSC voters to prefer Fernandez, and 25% Mejia.
The survey was carried out from 28 June to 4 July. One thousand two hundred Dominicans eligible to vote in the 2004 presidential election were polled.

Air travel down 13.61%
Listin Diario reports that Central Bank statistics show that the foreign tourist air arrivals are down 13.61% in the first half of the year. This means 184,010 less foreign visitors arrived by air this year from January to June of this year, compared to last year. 
Broken down by arrival terminal the arrivals were (numbers in parenthesis correspond to 2001 arrivals): 
Las Americas (Santo Domingo):
301,263 (363,256) 
Puerto Plata: 255,105 (356,100)
Punta Cana: 486,051 (526,826)
La Romana: 109,031 (94,266) 
Cibao: 9,378 (6,683)
Herrera (Santo Domingo): 6,974 (4,681)

Dry cell plant closes
The Ray-O-Vac manufacturing plant closed in Herrera, Santo Domingo yesterday. The president of the Association of Industries of Herrera, Jose Ernesto Sanchez said that the high tariffs on imported inputs put the company out of business. In its heyday, the company exported US$4 million a year, primarily to Haiti. 
Sanchez said this is a warning that the government needs to revise customs tariffs that make Dominican business non competitive in the global world. 

Pan Am sports venues update
The Minister of Public Works Miguel Vargas Maldonado toured construction sites of 18 installations for the 2003 Pan American Games yesterday. He assured reporters that all sports venues would be completed by February of next year. He said the government has disbursed RD$324 million of the RD$996 million budget for the constructions. 
The Mejia government is building 26 sports venues for the Games.

Mining for Dominican diamonds
The Dominican Republic has become a major source of baseball talent, producing more major-leaguers than any other foreign country. Nearly every team - including the Phillies, who opened an academy this spring - has facilities in the small Caribbean nation to develop young players. Philadelphia Inquirer journalist Jim Salisbury, focuses on the scouting process, the training and the tryouts that make dreams come true. See http://www.philly.com/
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