US Trade Representative Robert Zoellick would reportedly recommend to the US Congress that the DR be excluded from the free trade agreement if it does not eliminate the surcharge on corn syrup imports that was included in the recently implemented tax reform package, as per a story reported in several local newspapers. The DR-CAFTA agreement has yet to be debated in the US Congress.
The letter written by Zoellick to President Leonel Fernandez reportedly indicates that the tax is not consistent with the obligations signed by the Dominican Republic under the terms of the free trade agreement. The Dominican government signed an FTA that was docked to the Central American Free Trade Agreement on 5 August 2004.
According to reports, in the letter dated 1 October, Zoellick stated he would not recommend the DR’s inclusion in the legislation if the corn syrup tax is upheld. Furthermore, the letter also contains a description of changes to local laws that he considers necessary to comply with the FTA.
The United States Embassy in the DR sent a copy of the letter to the president of the Industry and Commerce Commission, Alejandro Santos, who heads a special commission that is studying the elimination of the surcharge. Santos feels it is important to preserve the FTA and he urged the nation’s various sectors to defend it. “For the moment our position is to harmonize the interests between the sugar industry and the free zone sector,” he told Diario Libre.
Santos said he is striving to reach a compromise on behalf of the US and find a solution so that the sugar industry is not affected by the FTA.