The Dominican Republic and the United States have concluded trade talks to integrate the DR into the five-country Central American Free Trade Agreement. The newly-signed agreement aims to open markets, phase out tariffs, strip away trade barriers and is being promoted as a vehicle to stimulate economic growth and opportunity for both countries. To give an idea of the volume of trade, total US exports to the DR in 2003 were 73% higher than total US goods exports to Argentina by comparison.
In an official statement, US Trade Representative Robert Zoellick said: “This is a proud day for the people of the Dominican Republic and the United States: with close ties and $9 billion in trade already, this Free Trade Agreement will help both countries to grow stronger together.”
Most Dominican goods already enter the US duty-free. Under the Caribbean Basin Initiative (CBI) and other US preferential programs, 74% of regional imports entered the US duty-free in 2002. A free trade agreement would be reciprocal, giving US goods duty-free treatment in the DR.
Once in effect, 80% of US exports of consumer and industrial goods will become duty-free in the DR immediately, with remaining tariffs to be dismantled over 10 years. Key US export sectors will benefit from immediate duty elimination, such as information technology products, agricultural and construction equipment, paper products, wood, pharmaceuticals, and medical and scientific equipment. Tariffs on US autos and auto parts will be phased out within 5 years.
Combined total trade between the US and the original five Central American CAFTA countries represents $23.2 billion. The addition of the DR to the CAFTA entails an additional $8.7 billion, totalling approximately $32 billion in commerce.
Before the FTA goes into effect, both the Dominican and Central American free trade agreements need to be approved by the US, Dominican and Central American congresses. News reports indicate that there is US congressional opposition to the passing of CAFTA, while this is not the case regarding the Dominican version.
For more information, see: 031604_ustr0419.pdf, 031604_factsheet.pdf,
031604_timeline.doc