US Trade Representative Robert B Zoellick, the Dominican Republic?s Minister of Industry & Commerce Sonia Guzman and representatives of five Central American nations affixed their signatures to the United States-Dominican Republic-Central America Free Trade Agreement (DR-CAFTA) in Washington, DC yesterday. The historic agreement creates the second-largest free trade zone in Latin America for US exports and will eliminate 80% of the tariffs immediately, with the remaining tariffs to be phased out over 10 years. The DR-CAFTA supersedes unilateral trade mechanisms that have been in place since 1983 with the signing of the Caribbean Basin Initiative. Now, some 20 years later, reciprocity is the new name of the game. ?The DR-CAFTA levels the playing field by expanding access for US products and services,? according to an official release from the Office of the US Trade Representative.
With this accord, the DR joins the Central American Free Trade Agreement signed earlier this year with Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua.
?This agreement significantly cuts trade barriers and expands regional opportunities for the workers. ?Adding the DR to CAFTA will create new economic opportunities by eliminating tariffs, opening markets, promoting transparency and establishing state-of-the-art rules for the 21st century commerce,? said Zoellick.
The US administration plans to submit a single legislative package to its Congress to implement the new trade treaty, which must also be approved by the Dominican Congress to go into effect.
In 2003, the DR represented US$8.7 billion in annual bilateral trade, for a combined total trade relationship with Central America of approximately US$32 billion.
The USTR highlights that DR-CAFTA will provide a key export market for US manufacturing sectors such as information technology products, agricultural and construction equipment, paper products, chemicals and medical and scientific equipment, all of which will enjoy immediate duty-free entry. It explains that more than half of current US farm exports to the DR will become duty-free at once, including high-quality cuts of beef, cotton, wheat, soybeans, key fruits and vegetables, processed food products and wine, among other items.
On the other hand, the trade between the DR and Puerto Rico also falls under the auspices of FTA status. Bilateral trade between the two neighboring islands accounts for almost US$1.3 billion. Puerto Rico exports almost US$700 million in goods and services to the DR annually.
The US currently has FTAs with Israel, Canada, Mexico, Jordan, Chile and Singapore, while negotiations are underway with ten other countries ? Colombia, Ecuador, Peru, Panama, Thailand and five nations in southern Africa.
See http://www.ustr.gov