U.S. and Dominican Republic Conclude Negotiations Integrating the Dominican Republic into CAFTA
The Office of the U.S. Trade Representative (USTR) has issued a press release and fact sheet announcing that on March 15, 2004, the U.S. and the Dominican Republic concluded negotiations integrating the Dominican Republic into the Central America Free Trade Agreement (CAFTA).
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With its integration into CAFTA, the USTR notes that the Dominican Republic has assumed the same set of obligations and commitments as Costa Rica, Honduras, El Salvador, Guatemala, and Nicaragua (the "CAFTA countries"). The USTR also states that, as with these countries, individual market access schedules were negotiated with the Dominican Republic for goods, agriculture, services, investment, and government procurement.
Highlights of the Dominican Republic's Integration into CAFTA
Most U.S. consumer/industrial goods exports will become duty-free immediately. Eighty percent of U.S. exports of consumer and industrial goods will become duty-free in the Dominican Republic immediately, with remaining tariffs phased out over 10 years. According to the USTR, tariffs on U.S. autos and auto parts will be phased out within 5 years. The USTR also states that the Dominican Republic will join the World Trade Organization (WTO) Information Technology Agreement.
Expanded markets for U.S. farm exports, etc. More than half of current U.S. farm exports to the Dominican Republic will become duty-free immediately, including corn, cotton, wheat, soybeans, many fruits and vegetables, and processed food products. According to the USTR, tariffs on most U.S. farm products will be phased out within 15 years, with all tariffs eliminated by 20 years. Duty-free access under tariff-rate quotas will be established for U.S. beef, pork, poultry, rice, and dairy products.
Sugar. In the first year, additional sugar market access for the Dominican Republic will amount to about 0.12 percent of U.S. sugar production.
Textiles and apparel. Textiles and apparel will be duty-free and quota-free immediately if they meet CAFTA's rule of origin. The USTR notes that CAFTA's benefits for textiles and apparel will be retroactive to January 1, 2004. According to the USTR, the Dominican Republic can participate in the CAFTA cumulation provisions, which will allow woven apparel from the Dominican Republic to contain a capped amount of Mexican and Canadian inputs. The Dominican Republic's ability to use cumulation provisions will not go into effect until cumulation provisions go into effect for the other CAFTA parties, and will expire if the Dominican Republic does not conclude an FTA providing reciprocal benefits to U.S. producers within a few years.
Haiti. The USTR states that the Administration will work with the Congress to enable Haiti to continue to be eligible to receive Caribbean Basin Trade Partnership Act (CBTPA) benefits for apparel containing inputs from the Dominican Republic.
Access to services. The Dominican Republic will accord substantial market access across its entire services regime, offering new access in sectors such as express delivery, transport, telecommunications, financial services, etc.
(U.S. government sources have previously opined that it was not known whether the addition of the Dominican Republic to CAFTA, the 2004 Congressional schedule, or other factors could adversely impact the time frame for implementing CAFTA.
(See ITT's Online Archives or 02/26/04 news, 04022605, for BP summary on President Bush's notification to Congress of his intent to sign a free trade agreement with Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua.)
USTR press release (04-19, dated 03/15/04) and fact sheet (dated 03/15/04) available at http://www.ustr.gov/new/fta/cafta.htm.