Trade Agreement

US – CAFTA – DR Free Trade Agreement

How Can U.S. Companies Benefit?

(Source: US Government Export portal

The Central America-Dominican Republic-United States Free Trade Agreement (CAFTA-DR) includes seven signatories: the United States, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua. The U.S. Congress approved the CAFTA-DR in July 2005 and the President signed the implementation legislation on August 2, 2005.

The United States has implemented the CAFTA-DR on a rolling basis as countries make sufficient progress to complete their commitments under the Agreement. The Agreement first entered into force between the United States and the Dominican Republic on March 1, 2007.

In addition to tariff reduction, CAFTA-DR provides new market access for U.S. consumer and industrial products and agricultural products. It also provides unprecedented access to government procurement in the partner countries, liberalizes the services sectors (see also financial services), protects U.S. investments in the region, and strengthens protections for U.S. patents, trademarks, and trade secrets. The Agreement covers customs facilitation and provides benefits to small and medium-sized exporters. Provisions are also included that address government transparency and corruption, worker rights, protection of the environment, trade capacity building, and dispute settlement.

CAFTA-DR creates the third-largest U.S. export market in Latin America, behind only Mexico, and the 15th largest U.S. export market in the world (or the 9th largest if the European Union is considered a single destination). The United States exported $24.2 billion in goods to the five Central American countries and the Dominican Republic in 2010, an increase of 21 percent over 2009. more than all exports to Russia, India, and Indonesia combined. CAFTA-DR already has given a strong boost to U.S. exports to the region (see 2006 Trade Overview). U.S. exports to the CAFTA-DR countries increased by 16 percent in 2006 compared to the prior year, and are continuing to grow just under that rate during 2007.

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