Pellerano & Herrera
August 1, 2014 - Dominican Republic
Business Opportunities Abound Under Dominican-Central America-US Free Trade Agreement
by Luis Rafael Pellerano
Almost exactly a decade ago, on August 5, 2004, the United States signed the Dominican Republic-Central America-United States Free Trade Agreement ("DR-CAFTA") with the Dominican Republic and five Central American counties (Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua)> The DR-CAFTA, which was the very first free trade agreement between the United States and a group of smaller developing economies, entered into force for the United State, El Salvador, Guatemala, Honduras, and Nicaragua in 2006, for the Dominican Republic in 2007 (after the Dominican Congress ratified it on September 9, 2005), and for Costa Rica in 2009.1
The DR-CAFTA region was the 14th largest U.S. export market in the world in 2013, and the third largest in Latin America (behind Mexico and Brazil). The United States exports $29.5 billion in goods to the Dominican Republic and the five Central American countries in 2013, over 74 percent higher than in 2005, the year before the agreement first entered into force.2
As those statistics suggest, the DR-CAFTA has led to significant opportunities for American companies and for businesses in the Dominican Republic, as well as in Central America. The agreement has been creating new economic opportunities by eliminating tariffs, opening markets, reducing barriers to services, and promoting transparency. Simply put, it is facilitating trade and investment among the seven countries and furthering regional integration.
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