Central America Free Trade Agreement-Dominican Republic (CAFTA-DR)

(CAFTA + DR)

(Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua)

Timetable/Milestones

  • Entered into force for Dominican Republic : March 1, 2007
  • Entered into force for Costa Rica: January 1, 2009
  • Entered into force for Guatemala: July 1, 2006
  • Entered into force for Honduras: April 1, 2006
  • Entered into force for Nicaragua: April 1, 2006
  • Entered into force for El Salvador: March 1, 2006
  • Entered into force for U.S.: January 1, 2006
  • Costa Rica ratifies agreement: October 7, 2007
  • Honduras ratifies agreement: March 3, 2006
  • Guatemala ratifies agreement: March 10, 2005
  • Nicaragua ratifies agreement: September, 2005
  • Dominican Republic ratifies agreement: Sept. 6, 2005
  • Agreement signed by President Bush: August 2, 2005
  • House vote to implement agreement (217-215) July 27, 2005
  • Senate vote to implement agreement (54-45) June 30, 2005
  • Bill sent to Congress: June 23, 2005
  • El Salvador ratifies agreement: Dec. 2004
  • Dominican Republic joins the CAFTA: Aug. 5, 2004
  • Negotiations ended with Dominican Republic: May 15, 2004
  • Agreement signed by U.S. and Costa Rican governments: Jan. 25, 2004
  • Negotiations ended: Dec. 17, 2003 (except for Dominican Republic)
  • Congress receives notification of intent: Aug. 4, 2003
  • Negotiations began: Jan. 8, 2003

Cafta + Dr Sugar Facts

  • Production (Avg. 2005-2007):
    • Regional: 4,455,333 mt
    • Costa Rica: 391,333 mt
    • Dominican Republic: 498,667 mt
    • El Salvador: 563,000 mt
    • Guatemala: 2,152,333 mt
    • Honduras: 366,000 mt
    • Nicaragua: 484,000 mt
  • Consumption (Avg. 2005-2007):
    • Regional: 1,938,666 mt
    • Costa Rica: 220,667 mt
    • Dominican Republic: 324,000 mt
    • El Salvador: 232,333 mt
    • Guatemala: 669,333 mt
    • Honduras: 277,000 mt
    • Nicaragua: 215,333 mt
  • Imports (Avg. 2005-2007):
    • Regional: 20,000 mt
    • Costa Rica: None
    • Dominican Republic: 20,000 mt
    • El Salvador: None
    • Guatemala: None
    • Honduras: None
    • Nicaragua: None
  • Exports: (Avg. 2005-2007):
    • Regional: 2,602,667 mt
    • Costa Rica: 169,333 mt
    • Dominican Republic: 207,667 mt
    • El Salvador: 336,000 mt
    • Guatemala: 1,531,000 mt
    • Honduras: 102,000 mt
    • Nicaragua: 256,667 mt

Access currently granted to U.S. market under minimum WTO tariff rate quota:

  • Regional: 311,700 mt (27.9% of total TRQ)
    • Costa Rica: 15,796 mt (1.41% of total TRQ)
    • Dominican Republic: 185,335 mt (16.59% of total TRQ)
    • El Salvador: 27,379 mt (2.45% of total TRQ)
    • Guatemala: 50,546 mt (4.52% of total TRQ)
    • Honduras: 10,530 mt (.94% of total TRQ)
    • Nicaragua: 22,114 mt (1.98% of total TRQ)

Individual Country Information

Costa Rica

  • Production (Avg. 2005-2007): 391,333 mt
  • Consumption (Avg. 2005-2007): 220,667 mt
  • Imports (Avg. 2005-2007): None
  • Exports: (Avg. 2005-2007): 169,333 mt
  • Current minimum access under WTO TRQ: 15,796 mt (1.41% of total TRQ)

Dominican Republic

  • Production (Avg. 2005-2007): 498,667 mt
  • Consumption (Avg. 2005-2007): 324,000 mt
  • Imports (Avg. 2005-2007): 20,000 mt
  • Exports: (Avg. 2005-2007): 207,667 mt
  • Current minimum access under WTO TRQ: 185,335 mt (16.59% of total TRQ)

El Salvador

  • Production (Avg. 2005-2007): 563,000 mt
  • Consumption (Avg. 2005-2007): 232,333 mt
  • Imports (Avg. 2005-2007): None
  • Exports: (Avg. 2005-2007): 336,000 mt
  • Current minimum access under WTO TRQ: 27,379 mt (2.45% of total TRQ)

Guatemala

  • Production (Avg. 2005-2007): 2,152,333 mt
  • Consumption (Avg. 2005-2007): 669,333 mt
  • Imports (Avg. 2005-2007): None
  • Exports: (Avg. 2005-2007): 1,531,000 mt
  • Current minimum access under WTO TRQ: 50,546 mt (4.52% of total TRQ)

World’s seventh largest exporter, exporting an average of 1.2 million metric tons (2002-2005). Through a combination of tariffs and non-tariff measures (e.g., a unique requirement that vitamin A be added to sugar), the Guatemalan government effectively blocks all foreign imports.

Honduras

  • Production (Avg. 2005-2007): 366,000 mt
  • Consumption (Avg. 2005-2007): 277,000 mt
  • Imports (Avg. 2005-2007): None
  • Exports: (Avg. 2005-2007): 102,000 mt
  • Current minimum access under WTO TRQ: 10,530 mt (.94% of total TRQ)

Nicaragua

  • Production (Avg. 2005-2007): 484,000 mt
  • Consumption (Avg. 2005-2007): 215,333 mt
  • Imports (Avg. 2005-2007): None
  • Exports: (Avg. 2005-2007): 256,667 mt
  • Current minimum access under WTO TRQ: 22,114 mt (1.98% of total TRQ)

Additional Access Granted to U.S. Market

The CAFTA + DR will phase-out sugar tariffs over 15 years. The tier-two or “out-of-quota” duty on sugar imported into the United States will not be cut from its Most Favored Nation rate of 15.36 cents/lb. for raw and 16.21 cents/lb. for refined sugar. The United States established TRQs for the Dominican Republic and Central American countries, starting at a collective 107,000 mt and growing to just over 151,000 mt in Year 15 (on a rolling basis after the agreement has entered into force in the individual countries), thereafter growing by 2 percent a year (simple growth) into perpetuity. The United States also established a quota for specialty sugar goods of Costa Rica in the amount of 2,000 mt annually. Provisions ensure only net surplus exporting countries in the region have increased access, and provisions have been agreed to allow alternative forms of compensation to be established to facilitate sugar stock management by the United States. New TRQ access will be as follows:

NOTE: Access is based on when the agreement is ratified and entered into force in each country. Costa Rica and the Dominican Republic will not receive additional access until at least 2007.

440

YearCosta RicaDom. Rep.El SalvadorGuatemalaHondurasNicaragua
Year 1 (2006)  24,00032,0008,00022,000
Year 2 (2007)11,00010,00024,48032,6408,16022,440
Year 3 (2008)11,22010,20024,96033,2808,32022,880
Year 4 (2009)11,44010,40028,00037,0008,48023,320
Year 5 (2010)11,66010,60028,56037,7408,64023,760
Year 6 (2011)11,88010,80029,12038,4808,80024,200
Year 7 (2012)12,10011,00029,68039,2208,96024,640
Year 8 (2013)12,32011,20031,00042,0009,12025,080
Year 9 (2014)12,54011,40031,62042,8409,28025,520
Year 10 (2015)12,76011,60032,24043,6809,44025,960
Year 11 (2016)12,98011,80032,86044,5209
,600
26,400
Year 12 (2017)13,20012,00034,00047,0009,76026,840
Year 13 (2018)13,42012,20034,68047,9409,92027,280
Year 14 (2019)13,64012,40035,36048,88010,08027,720
Year 15 (2020)13,86012,60036,04049,82010,24028,160
Year 16 (2021)14,08012,800    
Annual increase220200680940160


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