Former ambassador in Washington, D.C., economist Bernardo Vega writes today in El Caribe newspaper about the pressures coming from the US for the Dominican Congress to be the first to ratify the free trade agreement (DR-CAFTA) signed with the United States. He explains this is not the norm. In the cases of the two other free trade agreements the United States has signed in the Americas, that of Mexico and Canada and that of Chile, the US took the first step. There was always the possibility the US Congress could make amendments, although separate from the FTAs, since a free trade agreement cannot itself be modified. This occurred in the case of Mexico.
So far, in Central America, only El Salvador has ratified the agreement. Vega says there is widespread opposition in Costa Rica, Guatemala, Honduras and Nicaraguas have yet to vote on the treaty.
In the DR, Vega writes that the PLD is minority in Congress. He says the agreement faces opposition from the powerful sugar industry. Other productive sectors are conditioning their support to the government passing tax reforms that would make them more competitive.
He also mentions that the IMF agreement that is in place obliges the government to lobby before Congress for the passing of several complex bills, and loans with the IDB and World Bank. To incorporate the discussion of the DR-CAFTA at this time, he says, would complicate the Dominican government’s agenda with Congress, at a time when the IMF has priority.
“It is also possible that the US Congress may decide in the next three months to vote against DR-CAFTA, so then the local effort would have been useless. There is also the possibility, as occurred in the case of Mexico, that the US Congress may pass parallel agreements.”
He concludes: “If Washington ratifies the FTA, then we have to do so immediately, but by that time the internal and external pressures will be such that these will grease the approval. Our Congress needs to approve the FTA without changes, although probably accompanied by legislation that promotes competitiveness but also compensates the reduction in custom revenues.