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Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR)

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As a result of the U.S. FTA with Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua (CAFTA-DR), 80 percent of U.S. consumer and industrial goods exports to the CAFTA-DR countries are no longer subject to tariffs. Tariffs on the rest of those products will be phased out over ten years. To be eligible for tariff-free treatment under the TPA, products must meet the relevant rules of origin.

Under the Agreement, the Parties are significantly liberalizing trade in goods and services. CAFTA-DR also includes important disciplines relating to: customs administration and trade facilitation; technical barriers to trade; government procurement; investment; telecommunications; electronic commerce; intellectual property rights; transparency; and labor and environmental protection. CAFTA-DR creates new commercial opportunities for the United States while promoting regional stability, economic integration, and economic development for an important group of U.S. neighbors.

The CAFTA-DR region was the 15th largest U.S. export market in the world in 2010, and the third largest in Latin America behind Mexico and Brazil. 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. For the five-year period that CAFTA-DR has been in force (2006-2010), U.S. exports grew by 43 percent, which compares very favorably to the 25 percent growth experienced during the five years (2001-2005) before CAFTA-DR. U.S. exports to all the CAFTA-DR countries have experienced significant growth during the first five years of the agreement, led by Guatemala and Nicaragua (both up 57 percent), followed Costa Rica (44 percent), Honduras (42 percent), Dominican Republic (39 percent) and El Salvador (32 percent).

By Sector

Key U.S. exports that have experience significant growth to the CAFTA-DR countries since the implementation of the agreement include: petroleum products, machinery, electrical/electronic products, textile fabrics, cotton yarns, cereals (wheat, corn, rice), plastics, motor vehicles, paper products, and medical instruments.

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Free Trade Agreements

Created by: Free Trade Agreements

Last updated on: 04/30/2013

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