President-elect Leonel Fernandez said that the signing of the free-trade agreement with the United States is essential. ?If we decide to isolate ourselves, then a period of collective pauperization of Dominican society will begin,? he said to the press at the presentation of his economic crisis management team at the Fundacion Global Democracia y Desarrollo, yesterday. He asserted that for the past 20 years the DR has been operating under a scheme of unilateral free trade with the United States. Now, however, the US is demanding reciprocity. Eighty percent of DR-CAFTA imports already enter the United States duty-free under the Caribbean Basin Initiative, Generalized System of Preferences and Most Favored Nation programs. The DR-CAFTA will provide reciprocal access for US products and services.
?Reciprocity is indispensable? It is not a question of whether we want it or not, international market conditions demand it. Otherwise, we would not exist as a nation,? he stated, as reported in El Caribe. Fernandez believes that states that do not integrate into the free-trade scheme will deteriorate. ?We are compelled, forced by the circumstances, it is a matter of competitiveness,? he said.
United States Trade Representative Robert B Zoellick and Industry & Commerce Minister Sonia Guzman are scheduled to sign the DR Free Trade Agreement in Washington, DC today. Trade ministers from Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua will similarly be on hand to ratify the Central American Free Trade Agreement on behalf of their respective nations. The result will be an agreement among these seven countries to be known as the United States-Dominican Republic-Central America Free Trade Agreement (DR-CAFTA).
The combined total trade between the US and the five CAFTA countries accounted for US$23.6 billion in 2003. The addition of the Dominican Republic to the accords represents an additional US$8.7 billion in annual two-way trade, for a combined total trade relationship worth US$32 billion.
The DR-CAFTA is a regional trade agreement among all seven signatories that will contribute to advancing regional integration. The US administration plans to submit a single legislative package to Congress to implement the new trade agreement with the five Central American countries and the Dominican Republic.
For more details, see http://www.ustr.gov
Following the official signing, the treaty will be forwarded to the US Congress for its approval, and then to the Dominican Congress where authorization is also necessary for the deal to go into effect.