Dominican Republic Integrated Into CAFTA Trade Pact

by 5m Editor
24 March 2004, at 12:00am

US - The United States and the Dominican Republic completed negotiations last week to integrate the Caribbean nation into the recently concluded Central American Free Trade Agreement, reported Food Chemical News.

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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 the U.S. Trade Representative's Office. 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.

"The U.S. and the Dominican Republic will work to resolve sanitary and phytosanitary barriers to agricultural trade, in particular problems and delays in food inspection procedures for meat and poultry," USTR said.

USTR noted that combined trade between the United States and the original five CAFTA countries is $23.2 billion. Addition of the Dominican Republic adds another $8.7 billion, totaling about $32 billion in annual trade, said Food Chemical News.

The Grocery Manufacturers of America praised the Bush administration for putting trade negotiations "back on the right track" after excluding sugar from the U.S.-Australia Free Trade Agreement

"GMA and its member companies were extremely concerned that the Australian FTA would set a precedent for excluding 'sensitive' agricultural commodities such as sugar from future trade agreements," said Sarah Thorn, international trade director. "In concluding the U.S.-Dominican Republic FTA, we are pleased to see that U.S. negotiators have returned to their 'no exclusion' policy. This sends an important signal to trading partners that this is the norm for future trade agreements."

Thorn said she hoped U.S. trade negotiators would adhere to their "no exclusion" trade policy, "as we firmly believe that comprehensive trade agreements are critical to maintaining the support of all U.S. food and agricultural sectors for increased free trade."

The American Soybean Association noted that the Dominican Republic is a major customer of U.S. soybean meal and soybean oil, with exports valued at $88 million in 2002.

"Soybeans and soy products are currently at a 40% bound duty, but that rate is not applied in all circumstances," ASA said. "For soybeans and meal, the bound duty is not applied, but traded at zero, and the agreement locks in the tariff at zero. For crude soy oil the applied duty was 3% and it will be immediately eliminated to zero. For refined soybean oil, the duty applied is 20% and the duty will be eliminated over 15 years with safeguards."

The National Pork Producers Council highlighted both immediate and phased-in concessions on U.S. pork and pork products. "A significant tariff rate quota (TRQ) will be established through which the U.S. can immediately ship pork tariff free within the quota," NPPC said. "The size of the quota will increase each year, and the out-of-quota tariff will decrease over time. The quota and the tariffs will be eliminated after the 15-year phase-in period."

With regard to non-tariff issues, NPPC praised the U.S. negotiators for obtaining a commitment from the Dominican Republic to abolish all nontariff measures, such as restrictive licensing practices that it said have virtually halted trade in recent years.

The pork producers noted that "some further work needs to be done" to ensure that the Dominican Republic recognizes the U.S. meat inspection system as equivalent to its own and implements transparent import procedures. "The elimination of tariffs is very important, but in order to have meaningful, commercial access we need to be sure that all impediments to exporting pork - including sanitary, inspection and licensing issues - are resolved," NPPC said.

Source: National Pork Producers Council (NPPC) - 22nd March 2004

5m Editor