Speaking at the American Chamber of Commerce lunch on 12 October 2022, Foreign Relations Minister called for Dominicans to take advantage of the new commercial opportunities that are opening with the passing of two landmark legislations in the United States – CHIPS and IRA.
He rallied Dominican businesspeople to look into opportunities opened by the Semiconductor Act (CHIPS) and the US Inflation Reduction Act (IRA), recently approved in the United States that create room especially for free zone manufacturing operations in the Dominican Republic. “This is a great opportunity to catapult our exports and foreign direct investment as never before. We are visualizing opportunities beyond the horizon conceived in 2004 by DR-CAFTA. It should be clear that a determined commitment from the private sector is required to materialize the advantages offered by these initiatives,” highlighted the minister.
The Semiconductor Act addresses the semiconductor chip shortage and seeks to make the US less reliant on other countries such as China for manufacturing of these. It is expected to boost US technological innovation and national security. It provides incentives for US semiconductor manufacturing and US$50 billion for sector research and development.
The US Inflation Reduction Act has provisions to accelerate clean-energy transition, control healthcare costs, and simplify the tax code to curtail inflation and bolster long-term competitiveness in the United States.
Foreign Relations Minister Alvarez stressed that the Dominican Republic is now a regional leader as a founding partner in the Alliance for Development in Democracy with Costa Rica, Panama, and later Ecuador. He said: “Based on democratic values and human rights, the Alliance has sought since its inception to make our countries visible, agree on common foreign policy positions, and work together to promote exports and attract foreign investment.”
Alvarez said this is paying off. He said: “The ADD has attracted international attention. This was recognized by President Joseph Biden last December when, in his closing remarks at the Democracy Summit, said that this alliance ‘is the kind of inspiring partnerships and commitments that he hopes to see more often.'”
He highlighted that the ADD is the ideal space to strengthen these efforts through a public-private alliance with Costa Rica, Panama and Ecuador, to jointly take advantage of access to the markets of our most important partners, the United States being the main one.
Among the Alliance’s key achievements since its start in September 2021 is the formation of a High-Level Business Council, made up of representatives of the private sector of the four countries, which established a strategic dialogue with the United States and the US business sector. As a result of this bond, a Memorandum of Understanding was signed in July 2022 between the Alliance and the United States, which seeks to link the companies of our countries in the global supply chains, primarily those of a strategic nature, a key element for the economic growth of our countries.
Alvarez spoke of the many challenges ahead, but acknowledged support of Industry & Commerce Minister Victor (Ito) Bisonó, and leadership of business people such as Samuel Conde, and those at the AmCham in the Dominican Republic that “exemplify the important synergy of public-private coordination.”
He advanced that the Alliance for Development in Democracy is currently working with the US government and the US Congress on legislative initiatives on nearshoring to take advantage of the new commercial opportunities opened up by, for example, the semiconductor and the inflation reduction acts, recently approved in the United States.
He explained that the semiconductor act has provided US$52 billion over five years in investments and subsidies, plus other tax incentives, for the establishment of companies in the United States. He said the inflation reduction bill provides for US$437 billion in public investment over ten years in the areas of energy security, climate change, drought resilience and subsidies to the health sector in the United States. “The idea is that all this public investment help create jobs and set up new industries to generate a market to supply inputs and services to these companies, such as packaging, logistics services, etc., which can be provided in part from the ADD countries,” he said.
Alvarez stressed that this is part of the US government’s strategy to analyze and rethink its supply chains in the face of global threats and its need to seek reliable partners. He explained that parallel to the efforts in the United States, in the Dominican Republic, President Abinader has ordered a mirror study of Dominican supply chains to take advantage of these transformations in US economic and trade policy.
In his speech, Alvarez also addressed the advances in organizing the teams at the Dominican missions abroad, contributions to the increase in exports and foreign investment, and the efforts to back Dominicans living abroad and deal with the critical situation in Haiti.
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Ministry of Foreign Relations – Am Cham Oct 2022 speech
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Listin Diario
13 October 2022