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U.S. Expected to Proceed With CAFTA With the Dominican Republic

According to various U.S. government sources, now that the Dominican Republic has repealed its 25% tax on soft drinks containing high fructose corn syrup (HFCS), the Bush Administration is likely to proceed with the Central American Free Trade Agreement (CAFTA) including the Dominican Republic (i.e., DR-CAFTA).

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(In November 2004, the U.S. Trade Representative (USTR) said that in September 2004 he informed the President of the Dominican Republic that he could not recommend including the Dominican Republic in the CAFTA package for consideration by Congress if the HFCS tax became law. The USTR then stated that he had instructed his staff to forward to the Central American governments the text of FTA that excluded the Dominican Republic and subsequently made that text available on the USTR Web site. See ITT's Online Archives or 11/23/04 news, 04112335, for BP summary.)

Next Step Expected to be Submission of DR-CAFTA Legislative Package to Congress

U.S. government sources state that if the Bush Administration proceeds with DR-CAFTA, the next step is for the President to formally submit a single legislative package to Congress to implement the DR-CAFTA (DR-CAFTA, implementing legislation, and statement of administrative action). One source opined that the Bush Administration would likely submit the legislative package to Congress in early 2005.

In response to the Dominican Republic's repeal of the HFCS tax, Senate Finance Committee Chairman Chuck Grassley issued a press release which stated, in part, that he looks forward to moving through the Senate Dr-CAFTA.

Senator Grassley's press release (dated 01/05/05) available at http://finance.senate.gov/press/Gpress/2005/prg010505a.pdf.