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
competitor countries.
U.S. Gains Improved Access to the Dominican and Central American Dynamic
Economies
Before CAFTA-DR. . .
In the six CAFTA-DR countries, U.S. fruits and nut products faced average
import tariffs of 15 percent, but these tariffs can rise to 25 percent on U.S.
exports such as apples, grapes, raisins, peaches, pears, cherries, almonds,
walnuts and pistachios, and are higher on other products. The WTO permits
tariffs as high as 138 percent on certain of these fruits and 60 percent on
certain tree nuts in some countries. Without preferential access, U.S. fruits
and nuts are at a disadvantage to products from Argentina, Chile, and Mexico.
From 2002 through 2004, U.S. suppliers annually shipped on average 43,540 metric
tons (mt) of fruit and nuts valued at $55.5 million to all 6 countries combined,
and the U.S. share of their import market was approximately 40 percent in 2002.
After CAFTA-DR. . .
U.S. fruits and nuts gain preferential access to
the markets of all 6 countries. Over 70 percent of U.S. fruit and nut products
are eligible for immediate duty-free access, while another 26 percent of all
fruit and nut products will have their import tariffs phased out over the next 5
to 10 years. Tariffs on all fruits and nut products will be phased-out within 15
years.
U.S. suppliers will gain immediate duty-free access for
apples, peaches, pears, grapes, cherries, almonds, walnuts, pistachios, raisins,
canned peaches, canned pears and frozen concentrated grapefruit juice in all six
countries, and on frozen concentrate orange juice in all Central American
countries. These results will allow U.S. suppliers to compete in these growing
markets on equal terms with suppliers from other countries.
U.S. Consumers Benefit
Before CAFTA-DR. . .
Fruits and nut products from the 6 CAFTA-DR countries enter the U.S.
duty-free as a result of benefits granted under the provisions of the Caribbean
Basin Initiative. From 2002 through 2004, U.S. companies annually imported on
average 3.5 million mt of fruits and nuts valued at $1.1 billion from the six
countries combined, and their share of the U.S. import market was 39 percent.
After CAFTA-DR. . .
All 6 CAFTA-DR countries lock-in duty-free access to the U.S. market for all
fruit and nut products.
