Overview of the U.S.- CAFTA-DR Free Trade Agreement

February 25, 2011, 4:37 PM

The Central America-Dominican Republic-United States Free Trade Agreement (CAFTA) provides new market access for many products due to considerable tariff cuts. For example, with the implementation of CAFTA, 92% of U.S. capital goods exports, 100% of U.S. agricultural equipment, and 95% of U.S. construction equipment automatically become duty-free. There are also significant tariff cuts for consumer goods, chemicals, environmental goods, electronic goods, footwear, paper, and transportation equipment.

This agreement is of particular benefit to small and medium sized businesses. Such businesses may have the opportunity to enter the global market for the first time due to the tariff cuts required under the CAFTA-DR. Also, for businesses that have limited resources available to navigate customs and regulatory red tape, the transparency provisions should eliminate varying interpretations of product classifications and minimize delays at ports of entry. Furthermore, CAFTA-DR governments are required to publish all of their customs laws, making it considerably easier for businesses to be informed of and comply with such laws. All the CAFTA-DR customs-related obligations will phase in over three years. The text of CAFTA can be located at: http://tcc.export.gov/Trade_Agreements/All_Trade_Agreements/CentralAmericanFreeTA.asp. --R. Ellen Coley