The announcement of the resuming of talks for a free trade agreement between Canada and the Dominican Republic is expected to increase trade and investment between both countries. Imports from Canada have stagnated. But still, after Cuba, Trinidad and Tobago and Guatemala, the DR is Canada's largest market in the Caribbean and Central American region.

Canadian exports in 2004 were C$101 million and consisted mainly of beans, paper products, fish, and machinery parts. However, Canadian statistics do not capture several large Canadian exports to the DR such as telecommunications equipment, wheat and several other products, which are delivered to DR clients through locations in the United States.
Canadian imports from the Dominican Republic originate mostly from the Free Trade Zones; apparel, electrical equipment, and medical supplies. From the agricultural sectors the most notable imports are fresh fruit (melons) and cocoa beans (CAN$14 million annually). Cigars are a traditional import and tourism figures heavily as a imported service with over 500,000 Canadians taking their winter vacations in the DR every year.
Source : Statistics Canada

Challenges to Canadian Trade
The DR is, by far, the main and largest commercial partner of the US in this region with bilateral trade reaching US$4.5 billion for the period January-June 2005. With the approval for implementation of DR-CAFTA in March 2007, the dominance of US products is expected to gradually increase even more, to the detriment of other countries, including Canada.

The recent tax reform resulted in higher products for Canadian food products that had never paid VAT or sales tax, and are now being charged with the 16% sales tax that most products already pay in the DR. Since this tax is calculated based on the CIF price plus all applicable duties and taxes, it will increase the final price of Canadian products more than that of American or Central American products.