It is important to note that as a member of the World Trade Organization, all subsequent treaties and laws passed and adhered to by the Dominican Republic are subject to the rulings and norms contained within that global trade framework.  In other words, multilateralism prevails over bilateralism, despite the global trend for the signing of regional and country-to-country agreements. In the case of the DR, in its quest for global integration, the country is associated to three major reciprocal trade agreements (US, Central America, Caribbean) and a fourth with the European Union pending for completion this year, with the complexities of managing different rules of origin, tariffs and terms of implementation of each.

The DR signed trade agreements with Caribbean Community (Caricom) and Central American Common Market (MCCA) in 1998 (that would be implemented 2001-2002). In 2003 the DR signed a Partial Scope Agreement with Panama and in 2005 DR-CAFTA was signed to be implemented in 2007. At present the DR is working along with Cariforum countries in negotiations for an Economic Partnership Agreement with the European Union for 2007.

To prepare for this onset of free trade, the DR initiated in 1993, 2000 and 2005 major tariff cuts that have resulted in an opening of Dominican markets to foreign imports. The fiscal reform of 2005 reduced to zero the tariff on imports of raw materials and capital goods from all around the world.

Trade negotiations and the subsequent managing of trade agreements in the DR are handled by two government departments – the Ministry of Foreign Relations and the Ministry of Industry and Commerce. The Ministry of Foreign Relations (Minister Carlos Morales Troncoso) is responsible for negotiations leading to the treaties, through its National Commission for Trade Negotiations. Foreign Relations Minister Morales heads the negotiations office. Juan Giulliani Cury is the Deputy Minister of Foreign Relations in charge of Trade Negotiations at the Ministry of Foreign Relations. At the Ministry of Industry and Commerce (Minister Francisco Javier) the signed trade treaty follow up is handled by Vilma Arbaje.

With the entry of the DR into a trade block with the United States (DR-CAFTA), and the granting of trade advantages, the position of the Dominican Republic is to equally open up its markets to other blocks, in order to create the conditions for market competition that will benefit local consumers.

In recent years the Dominican Republic has entered into many agreements and accords with the hopes of strengthening its economic output and stability. The Dominican Republic also hopes to capitalize on its economic strengths and take advantage of the recent recovery of its economy.

Trade negotiations and developments are under study with Panama, Mexico, Canada, Taiwan, Korea, Cuba, China, Chile, Colombia, Haiti and multilateral negotiations with the European Union and Mercosur (Argentina, Brazil, Paraguay, Uruguay).

General Trade Overview for the DR

The Dominican Republic's excellent geographic location offers the country a definite trade advantage. Global trends for increased free trade open new opportunities and challenges for the DR as the potential is there for the country to become a springboard for third countries interested in accessing the US market, especially after the the DR-CAFTA agreement came into effect in 2007. 

The United States is the Dominican Republic’s leading trade partner. Large export manufacturing zones have installed themselves in the DR for offshore assembly of goods intended to the US market. The lower cost of assembly in China, though, has brought about major changes as local companies adapt to the competition.

The implementation of the DR-CAFTA (US-Central America and the Dominican Republic free trade) provides for duty-free access to US markets, plus certain rule of origins advantages for raw material imports from NAFTA-signatory countries (Mexico and Canada). The DR also has a free trade agreement with the Caribbean Community (Caricom) countries.

The Dominican Republic has yet to take advantage of the free trade agreements signed with the English-speaking Caribbean (Caricom) and Central America. The strategic alliance between the Caribbean and Central America that would represent a market of 60 million consumers and the political pull of 20 votes in leading international organizations, has yet to provide fruits for the DR. Central American countries have been more successful exporting to the DR. Higher production costs at home, including high power costs, taxes and trucking monopolies, have been cited as major obstacles for the local manufacturing sector to take advantage of the agreements.

Dominican and European trade relations are strong. Dominican exports also have duty-free entry to the 320 million affluent consumer market in the European Union (EU), the world's largest consumer market. Under the Cotonou Accord, Dominican products that meet certain requirements have duty-free access to Europe. Negotiations are under way for a reciprocal trade agreement, the European Economic Partnership Agreement that is scheduled to enter into effect in 2008. (Reviewed 13 June 2007)