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

Year Costa Rica Dom. Rep. El Salvador Guatemala Honduras Nicaragua
Year 1 (2006)     24,000 32,000 8,000 22,000
Year 2 (2007) 11,000 10,000 24,480 32,640 8,160 22,440
Year 3 (2008) 11,220 10,200 24,960 33,280 8,320 22,880
Year 4 (2009) 11,440 10,400 28,000 37,000 8,480 23,320
Year 5 (2010) 11,660 10,600 28,560 37,740 8,640 23,760
Year 6 (2011) 11,880 10,800 29,120 38,480 8,800 24,200
Year 7 (2012) 12,100 11,000 29,680 39,220 8,960 24,640
Year 8 (2013) 12,320 11,200 31,000 42,000 9,120 25,080
Year 9 (2014) 12,540 11,400 31,620 42,840 9,280 25,520
Year 10 (2015) 12,760 11,600 32,240 43,680 9,440 25,960
Year 11 (2016) 12,980 11,800 32,860 44,520 9
,600
26,400
Year 12 (2017) 13,200 12,000 34,000 47,000 9,760 26,840
Year 13 (2018) 13,420 12,200 34,680 47,940 9,920 27,280
Year 14 (2019) 13,640 12,400 35,360 48,880 10,080 27,720
Year 15 (2020) 13,860 12,600 36,040 49,820 10,240 28,160
Year 16 (2021) 14,080 12,800        
Annual increase 220 200 680 940 160


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