2005News

FTA hearings heat up

The industrial sector has asked that the tax on the purchase of dollars, called the exchange rate commission, be abolished as part of the first face-off between supporters of the free trade agreement signed with the US and its detractors. On one side are the industrial free zones, the American Chamber of Commerce and the representatives of pharmaceutical houses who will benefit from the agreement. On the other side are farming sector representatives, including beef, pork and poultry producers as well as crop farmers. Among those who seek changes in the FTA are Association of Industries of the Dominican Republic (AIRD), the Association of Dominican Pharmaceutical Companies, and the entire sugar sector. Yandra Portel, the president of AIRD told the legislators that the Dominican industrial sector could not compete under the current conditions. She pointed out that the sector could not update its machinery at the current 30% tax levels. The sector leader asked legislators to repeal the exchange tax on raw materials and capital goods and create a better, more efficient, mechanism to repay excess VAT taxes collected on exempted goods. The pharmaceutical sector requested the re-writing of the chapter on Industrial Property because, in its present form, it does not allow the manufacture of generic medicines in the Dominican Republic. Pharmaceutical sector executive director Leila Mejia pointed out that 57% of medicines consumed in the Dominican Republic are manufactured locally. Farmers’ representative Enriquillo Rivas said that with the exception of vegetables and exotic flowers, the agreement is harmful to farming and meat producers. Of course, the agreement’s supporters challenge these arguments, saying that 15,000 jobs in the free zones will be created and that increased trade will provide even more jobs, compensating for job losses in other sectors.