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U.S., Central American Nations to Sign Free Trade Agreement

May 13, 2004

Will Be Second Free Trade Pact Signed This

WASHINGTON – U.S. Trade Representative Robert B. Zoellick
announced today that the U.S. – Central America Free Trade Agreement (CAFTA) will be
signed on Friday, May 28, 2004, at the Organization of American States (OAS) in
Washington, DC. Zoellick will sign on behalf of the United States and trade
ministers from Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua will sign on behalf
of their nations.

“CAFTA will promote U.S. exports to a large and important market,
even as it supports continued openness and democracy in Central America,” said
Zoellick. “The FTA will reinforce free-market reforms in the region and will also
strengthen the rule of law and sustainable development. Signing CAFTA will fulfill a vision of
expanded economic opportunity and trade put forward by President Bush, and will send
an important message that the United States is strongly committed to free trade with
our Central American neighbors.”

President Bush first announced his plan to negotiate an FTA with
Central America in a speech at the OAS in January 2002. Following the passage of Trade
Promotion Authority and the successful conclusion of a year- long negotiation, the
President notified Congress on February 20, 2004 of his intent to enter into the CAFTA. Under
the Trade Act of 2002, the earliest date the agreement could be signed is May 21,

The United States has finished negotiations with the Dominican
Republic to include that nation in the CAFTA, but a period of Congressional consultation on
that agreement required under the Trade Act has not yet concluded. A date for
signing an agreement that includes the Dominican Republic will be announced when those
consultations are complete. The Administration plans to submit a single legislative
package to Congress that includes CAFTA and the Dominican Republic together.
Representatives of the Dominican Republic have been invited to participate in the May 28
event as observers.

“We are enthusiastic about the opportunities CAFTA will create for
our exporters, and we’re pleased with the broad support this agreement has received
from manufacturers, farmers, ranchers, service firms, creative artists, and many
others. I look forward to signing this agreement only ten days after signing the Australia
FTA. Around the world, in both developed and developing countries, America’s drive for
free trade is moving full speed ahead,” said Zoellick.

The United States and Central America enjoy an increasingly
productive trade partnership. U.S. exports to the region have grown 71 percent
since 1996 and totaled $10.9 billion in 2003. More than seventy percent of CAFTA imports
already enter the United States duty free under the Caribbean Basin Initiative and
Generalized System of Preference programs; CAFTA will provide reciprocal access for U.S.
products and services. Including the Dominican Republic in CAFTA will create
the second- largest U.S. export market in Latin America, behind only


CAFTA negotiations began in January 2003 and took place in nine
general rounds of negotiations in San Salvador, El Salvador; San Jose, Costa Rica;
Guatemala City, Guatemala; Tegucigalpa, Honduras; Managua, Nicaragua; and in the
United States in Cincinnati, New Orleans, Houston, and Washington. Agreement with
El Salvador, Guatemala, Honduras and Nicaragua was reached on December 17,
2003, and with Costa Rica on January 26, 2004. Negotiations to include the Dominican
Republic in CAFTA began in January 2004 and concluded on March 15, 2004.

The U.S. has completed FTAs with eight countries - Costa Rica, the
Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, Australia and Morocco
- over the past six months. New and pending FTA partners, taken together, would
constitute America’s third largest export market and the sixth largest economy in the

Last month the United States and Panama conducted their first
round of free trade negotiations, and FTA negotiations with Colombia, Ecuador and Peru
will begin next week. Negotiations are under way with Bahrain and with the five
nations of the Southern African Customs Union (SACU), and negotiations with Thailand are
expected to begin shortly.

The United States currently has FTAs with Israel, Canada and
Mexico (NAFTA), Jordan, Chile and Singapore.