At yesterday’s press conference in Caracas, President Fern?ndez announced that Costa Rica will retire its trade complaint against the Dominican Republic in the World Trade Organization (WTO) regarding the so-called "technical rectification" restrictions on milk imports. Fern?ndez met with Costa Rican President Miguel Angel Rodr?guez Monday night; he says that his Costa Rican counterpart notified him of the decision at that time. The decision may have an impact beyond bilateral trade relations between the two countries on two counts. First, trade law experts have long expressed doubts about the legality of the Technical Rectification; if Costa Rica had insisted on taking the complaint as far as a WTO arbitration board, the Dominican device might have been declared contrary to world trade rules to which the DR ascribes, thereby rendering it null and void. Second, the Technical Rectification is the foundation for the DR’s portion of the so-called "negative list" of products not receiving full trade liberalization benefits under the free trade treaties with Central American and Caribbean Common Market (CARICOM) nations. Currently both Honduras and Nicaragua are demanding changes in the negative list before they will sign onto a crucial implementing protocol to the DR-Central American treaty. The Costa Rican decision reduces the pressure on the DR to make major concessions to Honduras and Nicaragua.The Technical Rectification, which only came into effect last month, is a "correction" to the DR’s treaty commitments under the 1994 Uruguay Round trade agreements. The Uruguay Round accords, overseen by the Geneva-based WTO, included measures liberalizing imports of agricultural goods. The DR signed onto the accords, but when they were brought home for ratification, domestic agricultural interests protested that the commitments would ruin them. The then-Balaguer Administration launched negotiations with major agricultural trading partners for changes in its Round agricultural trade commitments under the guise of a so-called "technical rectification." The formula finally agreed sets import quotas on eight key items, such as milk products, rice and chicken, for which quantities the tariff levels agreed in the Round will be applied. Once the quota limit is reached, a variable (higher) tariff takes effect, depending on quantities imported.
