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CAFTA-DR’s Third Free Trade Commission Meeting: Facilitating Trade, Strengthening Regional Integration, and Supporting Made-in-America Exports

By John Melle, Assistant U.S. Trade Representative for the Western Hemisphere

In the tenth year of the implementation of the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR), U.S. export and investment opportunities with the Dominican Republic and countries in Central America continue to grow. Under the agreement, all U.S. industrial goods and more than half of grown-in-America agricultural exports, enter CAFTA-DR countries duty free, with the majority of remaining tariffs on nearly all U.S. agricultural products eliminated by 2020. CAFTA-DR has been an important catalyst in growing made-in-America goods exports to Central America and the Dominican Republic, increasing 99 percent since 2004 and reaching $31.3 billion in 2014. Ten years on, CAFTA-DR partners remain committed to strengthening trade facilitation, enhancing regional integration, ensuring labor and environmental protection, and implementing all aspects of the Agreement to ensure the greatest benefit for America, the Dominican Republic and the Central American region.

At the third meeting of the CAFTA-DR Free Trade Commission (FTC) in March, my Dominican and Central American counterparts and I reviewed progress in the implementation of the agreement, highlighted accomplishments of the CAFTA-DR committees and institutions, and  endorsed various initiatives to enhance regional trade and competitiveness. Overall, the meeting was a successful one. We discussed a range of issues of importance to our trading relationship, including trade facilitation, regional integration, information sharing, and labor and environmental protection and cooperation, which produced meaningful outcomes. I am particularly pleased that the CAFTA-DR countries have demonstrated a shared commitment to trade facilitation, as all member countries intend to notify the WTO of their respective acceptance of the Trade Facilitation Agreement.

The CAFTA-DR region has a highly integrated manufacturing and supply-chain network, and member countries would benefit greatly from simplifying customs practices and reducing the time and cost associated with moving goods across borders. During the meeting, the FTC acknowledged obstacles to cross-border trade in the region and made commitments to address these inefficiencies to make moving goods across borders more predictable and transparent, and strengthen regional economic competitiveness. The FTC plans to implement several initiatives to strengthen and support regional supply chains, including programs that will benefit textile sourcing databases and improve technical assistance for the U.S. textile and apparel industry. Member countries also agreed to work together to strengthen trade and security by sharing best practices in intellectual property protection and border enforcement. Enhanced regional integration plays an important role in securing economic growth and stability in Central America, and continues to be a top priority under the CAFTA-DR agreement.

The FTC also endorsed a package of changes to the CAFTA-DR rules-of-origin that would  make it easier for certain products to qualify for preferential treatment and lowered tariffs under the Agreement. In fact, the FTC agreed to eliminate Costa Rica’s tariffs on certain crude vegetable oils to promote increased trade and competitiveness.  Moreover, the Commission supported cooperation on best practices for State-State and Investor-State disputes to protect U.S. rights and interests, and to explore dispute resolution procedures that improve investment and business climates.

Lastly, the FTC acknowledged the importance of labor cooperation and the extensive cooperation and engagement on environmental protection under the agreement. CAFTA-DR countries have increased their capacity to address environmental issues and challenges, which has led to cleaner production practices in manufacturing industries and stronger protections for the region’s rich natural resources and ecosystems, including endangered wildlife and forests. The FTC praised the work of the Environmental Affairs Council, which is scheduled to meet again this summer in Guatemala.

The benefits of the CAFTA-DR are real, and will continue to grow with ongoing efforts to facilitate trade, strengthen regional integration, protect workers and the environment, and ultimately open more markets for American businesses to export Made-in-America goods and services that support jobs and unlock opportunity across our country.

To read the CAFTA-DR Free Trade Commission (FTC) joint statement, agreed upon by all countries and released at the conclusion of the FTC, please click here.