America-United States Free Trade Agreement (CAFTA-DR)
What’s at Stake for Cookies (Sweet
On August 5, 2004, the United States signed the
Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR)
with Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, and
Nicaragua. The agreement will provide America’s farmers, ranchers, food processors, and the
businesses they support with improved, and in many cases, new access to this
growing regional market of 44 million consumers. The CAFTA-DR calls for eventual
duty-free, quota-free access on essentially all products, and addresses other
trade measures among the parties as well. Under the existing terms of the
Caribbean Basin Initiative, which the CAFTA-DR replaces, nearly all agricultural
exports from the CAFTA-DR countries to the United States already receive duty
free treatment. The CAFTA-DR levels the playing field, providing U.S. exporters
market access that is better than, or at a minimum equal to, that given to other
U.S. Gains Improved Access to the Dominican and Central American Dynamic
Before CAFTA-DR. . .
U.S. cookies face import tariffs of 15 percent in
Central American countries, and 20 percent in the Dominican Republic. The WTO
permits tariffs ranging from 35 to 60 percent. Without preferential access, U.S.
cookies are at a disadvantage to products from Argentina, Chile, Colombia,
Mexico and the European Union. From 2002 through 2004, U.S. exports of cookies
to all six countries combined average $2.2 million.
After CAFTA-DR. . . U.S.
cookies gain preferential access in all 6 countries with tariffs on some types
of cookies scheduled for immediate elimination, while other cookies have
immediate tariff reduction and eventual removal within 5 to 15 years.
U.S. Consumers Benefit
Before CAFTA-DR. . .
Cookies are permitted to enter the United States duty-free from all 6 countries.
From 2002 through 2004, U.S. annual imports from all 6 countries averaged $1.1
After CAFTA-DR. . .
Cookies from all 6 countries continue to benefit from duty-free access to the
U.S. market as the United States’ zero duty is locked-in.
Commodity Fact Sheets