U.S.- CAFTA-DR Free Trade Agreement
How Can U.S. and D.R. Companies Benefit
The Central America-Dominican Republic-United States Free Trade Agreement (CAFTA-DR) includes seven signatories: the United States, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua. The U.S. Congress approved the CAFTA-DR in July 2005 and the President signed it into law on August 2, 2005. The CAFTA-DR has been approved by the legislatures in the Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua. Approval is pending in Costa Rica. The export zone created will be the United States' second largest free trade zone in Latin America after Mexico.

The United States is implementing the CAFTA-DR on a rolling basis as countries make sufficient progress to complete their commitments under the Agreement. The Agreement first entered into force between the United States and El Salvador on March 1, 2006, followed by Honduras and Nicaragua on April 1, 2006, Guatemala on July 1, 2006, and the Dominican Republic on March 1, 2007. The U.S. Government continues to work with Costa Rica to ensure timely and full implementation of the Agreement.

  In addition to tariff reduction, The Agreement covers customs facilitation and provides benefits to small and medium-sized exporters. Provisions are also included that address government transparency and corruption, worker rights, protection of the environment, trade capacity building, and dispute settlement.

Why U.S.-CAFTA-DR?

CAFTA-DR creates the second-largest U.S. export market in Latin America, behind only Mexico, and the 10th largest U.S. export market in the world. The United States exported almost $16 billion in goods to the five Central American countries and the Dominican Republic in 2004, more than all exports to Russia, India, and Indonesia combined. U.S. export growth to the CAFTA-DR region has outperformed overall U.S. exports. From 2000 to 2004, export shipments to CAFTA-DR destinations grew by almost 16 percent, compared with less than 5 percent for overall U.S. exports.