"The US is prepared to implement the free trade agreement among the United
States, Central America and the Dominican Republic (CAFTA-DR) as soon as
possible with those countries that the United States has determined to have
taken sufficient steps to complete their commitments. An announcement of whether
any of the CAFTA-DR signatories will be ready by January 1 will be made before
the end of the year. After January 1, the United States will put the agreement
into force with the other countries on a rolling basis.
"We want CAFTA-DR to start as close as possible to January 1, 2006, so that
U.S. and regional businesses can begin taking advantage of the Agreement's
benefits in the shortest possible time. The United States is prepared to have
the CAFTA-DR enter into force as early as January 1, but only with countries
that have made sufficient progress in adopting new laws and regulations where
necessary. We will move forward as long as at least one country is prepared, and
will accommodate new entrants as they become ready.
"We want to reward countries as they become ready and look forward to
continued progress with the others. Countries can continue to enjoy existing
preferences while they work with the United States to come on board. Preserving
benefits during a brief transition period is a non-disruptive way to move
countries over the goal line while keeping the Administration’s commitment to
Congress to ensure full implementation of all obligations.
"To the extent possible, the United States will seek to create a seamless
transition between the Caribbean Basin Initiative / Caribbean Basin Trade
Partnership Act (CBI/CBTPA) and the CAFTA-DR. Countries that have ratified the
Agreement would retain their benefits under CBI/CBTPA until the CAFTA-DR enters
into force for them and would retain their ability to seek retroactive duty
refunds for qualifying textiles and apparel. Moreover, U.S. partners for whom
the Agreement enters into force by April 1 can retain their full year
agricultural quotas for 2006; treatment of quotas after that date will be
determined as appropriate."
Background
Countries which are signatories to CAFTA-DR include the United States, Costa
Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua.
All of the CAFTA-DR signatories have ratified the Agreement except Costa Rica.
El Salvador was the first to ratify in December 2004. Nicaragua was the most
recent, in September 2005.
Implementing legislation for the CAFTA-DR passed the U.S. Senate in June and
the House of
Representatives in July, 2005, and was signed by the President in August.
The CAFTA-DR partners agreed to a target date of January 1, 2006, for entry
into force. All countries recognized, however, that this was an ambitious goal,
and that all countries might not have completed their implementation process by
that time. Other U.S. free trade agreements have had a longer preparation period
to get ready (typically 6-7 months with only one country), so the need for
additional time is not unusual.
With the exception of Costa Rica, all of the countries are working to
complete the implementation process as soon as possible. Under the "rolling
admissions" process, entry into force would occur on the first day of the month
with a country that the USTR determines is ready by the middle of the preceding
month. The intervening time will allow for a Presidential proclamation to be
prepared.
CAFTA-DR is the second largest U.S. export market in Latin America, behind
only Mexico, buying more than $16 billion in U.S. exports. Successful CAFTA-DR
implementation is critical to the broader U.S. policy goals for the Americas of
strengthening democratic governance, expanding economic opportunity, and
investing in people.
U.S. Trade Agenda
The United States is aggressively working to open markets globally,
regionally, and bilaterally and to expand American opportunities in overseas
markets. The Bush Administration has completed FTAs with 13 countries – Chile,
Singapore, Australia, Costa Rica, the Dominican Republic, El Salvador,
Guatemala, Honduras, Nicaragua, Morocco, Bahrain, Oman and Peru. Negotiations
are under way with ten more countries: Colombia, Ecuador, United Arab Emirates,
Panama, Thailand, and the five nations of the Southern African Customs Union
(SACU). New and pending FTA partners, taken together, would constitute America’s
third largest export market and the sixth largest economy in the world.
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