PUCMM economy professor Federico Cuello forecasts that the DR could have a free-trade agreement in place with the United States in about 200 days? time. In his view, the DR would have to accept the same terms as those negotiated
with Chile and Central America. Cuello, a former leading trade negotiator for the country and ambassador to the World Trade Organization, says this combines the two least amenable scenarios for the country ? docking and bilateral talks. He says that
to negotiate the Central American Free Trade Agreement (CAFTA) in equal terms, we would first have to have entered into the Central American Common Market that unites Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. Negotiations are
scheduled to wrap up by January 2005, according to Robert Zoellick, the US Trade Representative.
The US is the leading trade partner of the Dominican Republic.
As reported in the Financial Times, Dominican ambassador in Washington, D.C. Hugo Guiliani says that the trade agreement would stimulate economic development and provide security to exports and foreign investments. Guiliani has been one of the
strongest advocates of the bilateral with the US.
Cuello, however, feels that to dock to the (CAFTA), after rushing a bilateral accord with the US, would have implications that have not yet been evaluated. He says that the objectives of the US Trade Representative Office are: to eliminate all
tariffs, non-tariff and governmental barriers, to gain full access to our apparel markets, and to work jointly so that the WTO subsidies to farm exports be dismantled.
Cuello expounds that the US does not subsidize its farm exports; they grant domestic assistance that is not linked to trade, and thus will want to be maintain these programs in place.
He also says that matters become even more complicated when US objectives regarding services, government purchases, investments and intellectual property are analyzed.
Cuello concludes that while the docking solution was found primarily to benefit free trade zones doing business in the DR, these in the end will not be winners. The rules of origin do not favor the DR and the agreement will not recognize the WTO
authorization to maintain fiscal incentives until 2010, he says. The country will instead have to undergo the shock of full liberalization of trade with the US.
Cuello says that the national interest is not being considered and instead advocates the Dominican Republic make a counterproposal. He says it is necessary to research the implications of liberalization of Dominican farm producers, industries and
service suppliers. ?We must prepare a strategy for the opening of markets that defends our vulnerable sectors and compensates for the cost of liberalization.? Cuello concludes that ?in 204 days it will be too late to request technical
rectifications.? To contact Cuello, write to federico.cuello@excite.com