The Dominican industrial and agricultural sectors will be the most affected by the start up of the DR-CAFTA agreement, according to business council, CONEP. The document says that the free trade agreement with the United States may well portend the loss of nearly half a million jobs in the industrial and agro-industrial sectors. As reported in Hoy yesterday, CONEP sees the energy crisis, contradictory taxes, and difficult customs and port regulations as central to most of the problems of competing in a free trade arena. The existence of roadblocks for Dominican exports to reach Central America is another consideration. CONEP warns that if the government does not take the necessary steps that will favor these two vulnerable sectors, a 30% drop in jobs can be easily forecast. The document points out that in the energy sector costs, quality and electric rates applied at the discretion of local administrators are at the heart of the problem.
Regarding taxes, the CONEP document says that “import taxes, property taxes, taxes applied on depreciation, financing, or repairs, in addition to the non-repayment of the VAT taxes that were paid up front,” are highly unfavorable to both the industrial and the agricultural sector. The processes required to retrieve merchandise from the customs areas in Dominican ports is another headache for the industrialists and agro-business sector. Time, the consular invoice requirement and other stumbling blocks present a “high risk profile” for businesses that have to import raw materials or parts.
Different laws such as the Law 84-99 and the 8-90 also put severe impediments in the way of exporters, limiting access to Haiti and excluding machinery and parts.
The document centers on tax adjustments as being the central peg that will allow the Dominican industrial and agricultural sectors to be competitive within the Dr-CAFTA area.