By TBY | Dominican Republic | Aug 31, 2014
CAFTA-DR The pioneering CAFTA-DR with Central America and the United States was signed on August 5, 2004 by the US, El Salvador, Guatemala, Honduras, Nicaragua, Costa Rica, and the Dominican […]
The pioneering CAFTA-DR with Central America and the United States was signed on August 5, 2004 by the US, El Salvador, Guatemala, Honduras, Nicaragua, Costa Rica, and the Dominican Republic. It features broad tariff reduction for both imports and exports. The Dominican Republic and Costa Rica respectively joined in 2007 and 2009. The CAFTA-DR zone is the US’s third largest in the Latin America region after Mexico and Brazil. By 2015, 100% of US consumer and industrial goods exports to the other partners will be tariff-free. In 2013, it was the 14th largest US export market in the world. CAFTA-DR environmental dimension addresses conservation, sustainable development and instilling green practices in the private sector.
UNION WITH EUROPE
Regarding trade with Europe, the Lomé and Cotonou agreements signed by the EU and 78 African, Caribbean, and Pacific countries benefit the Dominican Republic in the context of ACP (Africa, Caribbean, and Pacific) countries established a legal framework for trade and investment. Consequently, Dominican exports of fruit and textiles, but also nation-branding products, like tobacco and rum, have risen.
The CARIFORUM-EU EPA
This Economic Partnership Agreement (EPA) was signed by the 15 CARIFORUM states and the EU’s 27 members in 2008 to engender a more equitable partnership, of mutual preferential trade. Its asymmetrical approach acknowledges the EU’s and Caribbean’s relative states of development, whereby the demands made of the latter party are lighter, yielding Caribbean nations 100% duty- and quota-free access on all products. Meanwhile, Caribbean signatories are to cut import tariffs within 25 years of signing, excepting sensitive goods and services (17% of total goods). The FTA also encompasses areas that either hinder or enhance trade, including innovation and intellectual property, and environmental and labor conditions. EU support for the Caribbean in 2012-15 with $146 million have created structures that assist member states in fully implementing the EPA. Promoting regional integration CARIFORUM states are obliged to extend to each other the same preferences received by the EU. The Central America-Dominican Republic FTA was signed on April 16, 1996 (ratified in 2002) between the members of the Economic Integration System for Central America, namely Costa Rica, El Salvador, Honduras, Nicaragua, and Guatemala. It exposed the Dominican Republic to a potential market of over 40 million consumers. The recent signing of a letter of intent for an FTA by the Dominican Republic and Taiwan confirms the efficacy and appeal of such mechanisms.