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26 April 2004

Widespread Support for U.S.-Dominican Republic Trade Pact

Addition to CAFTA creates second-largest Latin market for U.S. goods

Support for the recently completed U.S.-Dominican Republic Free Trade Agreement was widespread among the 32 trade advisory committee reports transmitted to President Bush and Congress on April 23, according to the Office of the U.S. Trade Representative (USTR).

The Trade Act of 2002 requires these committees to give an advisory opinion on proposed trade pacts to the White House and Congress, the USTR office noted in an April 23 press release.

The Dominican Republic agreed to become fully integrated into the U.S.-Central American Free Trade Agreement (CAFTA) on March 15 by assuming the same general obligations and commitments as CAFTA participants Costa Rica, El Salvador, Guatemala, Nicaragua and Honduras, the USTR office said.

The advisory reports indicate that adding the Dominican Republic to the CAFTA will create the United States' second-largest market in Latin American, just behind Mexico.

U.S. Trade Representative Robert Zoellick said: "Adding the Dominican Republic to CAFTA will further strengthen an already excellent agreement."

Following is the text of the USTR press release:

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OFFICE OF THE U.S. TRADE REPRESENTATIVE
EXECUTIVE OFFICE OF THE PRESIDENT
Washington, D.C.

FOR IMMEDIATE RELEASE
April 23, 2004

Trade Advisory Groups Support Adding Dominican Republic to CAFTA

WASHINGTON -- The Office of the United States Trade Representative today transmitted to the President and the Congress reports from 32 trade advisory committees, comprising more than 750 practitioners representing diverse interests and views, regarding the recently completed U.S.-Dominican Republic Free Trade Agreement. The Trade Act of 2002 requires these committees to give an advisory opinion on proposed trade pacts to the Administration and Congress, and support for this agreement was widespread.

On March 15, the Dominican Republic agreed to become fully integrated into the recent U.S.-Central America Free Trade Agreement (CAFTA) by assuming the same general obligations and commitments as CAFTA participants Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua. As was done for CAFTA participants, individual market-access schedules were negotiated with the Dominican Republic for manufactured goods, agriculture, services, investment, and government procurement.

"These countries are small, but they are very big consumers of American goods, services, and farm products. The advisory reports demonstrate that adding the Dominican Republic to CAFTA will create America's second-largest export market in Latin America, behind only Mexico," said Zoellick. "Adding the Dominican Republic to CAFTA will further strengthen an already excellent agreement."

The Advisory Committee for Trade Policy and Negotiations (ACTPN), which is appointed by the President and is the most senior advisory committee, said: "With the inclusion of the Dominican Republic, the agreement will even more broadly level the playing field for America's farmers and ranchers, manufacturers, and service establishments. It will provided increased market access for American goods and services and will also provide U.S. producers and consumers with lower-cost access to Central American and Dominican goods and services -- and does so in a manner not disrupting the U.S. economy." ACTPN also said, "The CAFTA is an exceptional agreement, made even better by the inclusion of the Dominican Republic."

In addition to renewing its satisfaction with the environmental provisions of the CAFTA, the Trade and Environment Policy Advisory Committee (TEPAC) said: "A majority of the Committee views favorably the Agreement's new public participation provisions and the Environmental Cooperation Agreement. If successfully implemented, these new provisions, which were not present in the Chile or Singapore agreements, will enhance the ability of citizens with reasonable environmental concerns to have those concerns heard."

Broad support was also expressed by industry advisory committees on services, manufactured goods, and intellectual property. These committees highlighted the comprehensive nature of the agreement, its rapid elimination of tariffs on U.S. exports, the provisions eliminating restrictive dealer laws in the Dominican Republic, and the positive effect of improving the investment climate through anti-corruption and transparency provisions. The report of the services committee pointed out that the Dominican Republic liberalization commitments in services and investment are "substantially greater" than its commitments in the WTO General Agreement On Trade in Services (GATS). Many textile industry and all apparel industry committee members said the agreement would create a more integrated regional production base that will help U.S., Dominican, and Central American producers to compete in global markets. The advisory committee on Footwear and Leather Products noted that the FTA would allow "some items which are now made in Asia, or which were destined to be moved there, to be ... sourced in the Dominican Republic as well."

Agricultural advisory committees, with one exception, voiced broad support for the agreement. The senior-level Agricultural Policy Advisory Committee (APAC) said, "the comprehensive agreement calls for eventual duty-free, quota-free access on nearly all [farm products]." The agreement won support from most agricultural technical advisory committees, which noted that there will be increased market access for U.S. farm goods such as poultry, pork, high-quality beef, dairy, fruits and vegetables, grains, feeds, oilseeds, and processed foods. The producer interests on the sweetener committee expressed opposition because the agreement with the Dominican Republic includes liberalization provisions on sugar, but sweetener users expressed disappointment that greater opening had not occurred.

The committee of state and local government representatives (IGPAC) expressed support for adding the Dominican Republic to the CAFTA, stating, "America's economic growth and prosperity are best served by embracing strategies for more open and fair global markets." The committee also stressed the importance of ensuring that trade agreements continue to respect the authority of state and local governments to regulate in areas under their jurisdiction.

As it has with every other recent free trade agreement including the U.S.-Australia FTA, the Labor Advisory Committee (LAC) opposed the pact and urged Congress to reject it, alleging deficiencies in local labor laws.

The market-access commitments, schedules, and other unique provisions of the Dominican Republic's participation in CAFTA were made public on April 9, 2004. The general text of the CAFTA has been public since January 28, 2004. The full text of the advisory committee reports are available on the USTR website, http://www.ustr.gov.

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