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The Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR) was implemented on a rolling basis. El Salvador, Guatemala, Honduras, and Nicaragua entered into force in 2006 and the Dominican Republic in 2007. Costa Rica joined CAFTA-DR on January 1, 2009.
The agreement was designed to level the playing field between the United States and the six CAFTA-DR trade partners. As the agreement took effect with each country, more than half of U.S. farm exports gained immediate duty-free access, including high-quality cuts of beef, soybeans, cotton, wheat, many fruits and vegetables, and processed food products. Tariffs on most other U.S. farm products will be phased out, by 2021.
U.S. Agricultural Exports at Record Level, Spurred by CAFTA-DR
In 2010, U.S. agricultural exports to the six CAFTA-DR countries increased 84 percent from 2005 levels.
For calendar year 2010, U.S. agricultural exports to the six CAFTA-DR countries reached $3.4 billion, up from 1.9 billion in 2005. This increase was led by coarse grains, exports of wheat, rice, soybean meal, red meats, and poultry meat.
Much of this growth can be attributed to tariff reductions and duty-free access provided by tariff-rate quotas established by the CAFTA-DR. Examples of increased exports in 2010 compared to 2005 for the CAFTA-DR include:
• Paddy and Milled Rice exports totaled $221 million, up 16 percent since 2005.
• Apple exports totaled $40.7 million, up 143 percent since 2005.
• Potato exports topped $5.1 million, up 849 percent since 2005.
• Table grape exports totaled nearly $41.2 million, up 121 percent since 2005.
• Dairy product exports totaled $109 million, up 60 percent since 2005.
• Pork exports totaled $114 million, up 346 percent since 2005
CAFTA-DR Partners Also Benefit from the Agreement
• For 2010, U.S. agricultural imports from the six CAFTA-DR countries reached $4.1 billion, up from 2.7 billion in 2005.
• The CAFTA-DR countries benefited from preferential, duty-free treatment under the Caribbean Basin Initiative (CBI) for most of their exports to the United States even before the agreement took effect.
• CAFTA-DR producers are benefiting from duty-free export opportunities created for products under the Agreement, such as cheese and other dairy products, which were not included in the CBI tariff preference program.
• U.S. phytosanitary import requirements for fruits and vegetables, which were developed primarily in response to requests from producers in all the CAFTA-DR countries, have also facilitated trade.
• U.S. and multilateral capacity building programs have helped indigenous agricultural producers in the CAFTA-DR countries to develop non-traditional exports to serve specialty markets in the United States and to improve their production facilities to meet U.S. standards. For example, efforts in this area, initiated under the umbrella of the CAFTA-DR, led to improved access conditions and export capabilities for fresh tomatoes and peppers moving from the CAFTA-DR partners to the United States. As a result, U.S. imports of fresh tomatoes, mainly from the DR and Guatemala, increased from $1.3 million in 2005 to $12 million in 2010. Furthermore, imports of fresh peppers rose from a level of $2.96 million in 2005 to reach $22.6 million in 2010, with all of the CAFTA-DR partners participating to varying degrees in that trade.