SANTO DOMINGO, Dominican Republic (AP) –The Dominican Republic made its long-awaited entry into a trade accord with the United States and Central American nations, leaving Costa Rica as the only signatory country where the deal has not taken effect.
Thursday’s announcement came 14 months after the Central American Free Trade Act or CAFTA-DR, was supposed to take effect in this Caribbean country of 9 million. The Dominican Republic’s entry was held up while lawmakers revised intellectual property laws governing the pharmaceutical industry and handled disagreements over fuel transportation rights.
“CAFTA-DR and the other free trade agreements in the hemisphere mark another advance toward bringing our nations closer together and securing the benefits of trade for all,” said U.S. Commerce Secretary Carlos M. Gutierrez. “Under President Bush’s leadership, the United States has offered a positive vision to the region that advances economic freedom and social reform while strengthening democracies and the rule of law.”
“One must remember that 85 percent of our exports today go to the U.S. market,” Dominican President Leonel Fernandez said at the presidential palace meeting with U.S. Ambassador Hans Hertell. “If we had not become a beneficiary state with preferential access to this great market…it would inhibit the growth of the free-trade zones we have in our country.”
Facing increased competition from China and Vietnam, those zones have shed about 40,000 jobs – 20 percent of the total – in the last three years. The Dominican Association of Free-Trade Zones has called the accord essential to the sector’s survival, allowing manufacturers to buy cheaper raw materials and enjoy expanded access to the U.S. market.
Dominicans also hope the agreement will lower prices on consumer goods such as food and make the country more attractive to foreign investors looking for access to the U.S. market.
“We should have had a holiday across the country today. This is what business had been awaiting for months,” Luis Nunez, a business association president in the central city of Santiago, told the online newspaper Clave Digital.
“The Dominican Republic is our largest export market among the CAFTA-DR countries with exports totaling $5.3 billion in 2006,” added Secretary Gutierrez. “Last year we had a $1 billion trade surplus with the CAFTA-DR region, of which the Dominican Republic represented $819 million. This is a significant turn around in the market compared to the $1.2 billion deficit in 2005.”
Critics of the agreement said they would be closely monitoring wages, the country’s textile sector and public access to medicine as the new rules take effect.
“The countries that are already under those CAFTA rules have been losing jobs and losing their U.S. exports,” said Todd Tucker, research director for Public Citizen’s Global Trade Watch in Washington. “The early results aren’t promising.”
Guatemala, Honduras, Nicaragua, and El Salvador previously entered the agreement, part of a U.S. push to boost U.S. exports worldwide.
But resistance to the accord has continued in Costa Rica, where tens of thousands marched on Monday through the capital San Jose to denounce the agreement as harmful to local businesses and farmers.