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US-DR-CAFTA

The US-Central America Free Trade Agreement, commonly referred to as “CAFTA,” was signed in December 2003 after twelve short months of negotiation. The negotiations involved the US, Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. Costa Rica at first refused to join the agreement, then changed its position in late January 2004. The US separately negotiated a bilateral treaty with the Dominican Republic, with a view to folding the deal, and the country itself, into the US-CAFTA scheme.

The US-CAFTA was signed late May 2004, and the Dominican Republic became an additional party to it in August 2004. Since then, the accord has been officially renamed the “United States-Dominican Republic-Central America Free Trade Agreement” or US-DR-CAFTA. But the overall agreement — which a lot of people continue calling just “CAFTA” — still needs ratification by all parties to go into force.

CAFTA is a wide-ranging agreement covering many areas: agriculture, telecommunications, investment, trade in services (from water distribution to gambling), intellectual property, the environment, etc. It essentially serves US business interests by giving them a concrete and high-level set of rights to operate in Central America. Some US sectors, such as sugar producers, feel threatened by the treaty. But by and large, the threats are mainly against the Central American countries which signed on, as it opens the depths of their economies — public and private — to the interests and power of US companies.

In July 2005, US Congress approved the DR-CAFTA and Bush signed it into law in early August. The Central American parliaments eventually also approved it. For the Dominican Republic, the treaty took effect in 2006.

Costa Rica was the Central American country with the strongest resistance to DR-CAFTA. There were large public demonstrations and information campaigns, and a broad grouping of civil society organizations, from trade unions to small farm organizations, signed on. This coalition successfully pushed for a referendum on ratification, which was held on 7 October 2007. The result: 51.62% in favour and 48.38% opposed. The result was considered binding since more than 40% of the electorate voted. In view of these results, CAFTA was ratified.

On December 23, President Bush issued a proclamation to implement the DR-CAFTA for Costa Rica as of 1 January 2009.

last update: May 2012


Trade agreement hits snag on Guatemala law
The USTR’s Office said Friday that Guatemala violated the terms of a pending Central American trade agreement with a new pharmaceutical data law the United States objects to.
Dominican Republic excluded from CAFTA
The Bush administration has decided to exclude the Dominican Republic from the Central American Free Trade Agreement because the Dominican Republic has adopted a tax on products containing high fructose corn syrup, Senate Finance Committee Chairman Charles Grassley said.
Dominican tax risks trade pact
The Bush administration is working to strip the Dominican Republic out of a wider free trade pact if the Caribbean nation does not repeal a recently implemented tax on soft drinks that affects U.S. exporters.
Central America is Not for Sale
A call for organizational sign-ons from the Central America is Not For Sale Coalition
Area sugar farmers see pledge as victory for industry
US Democratic presidential candidate John Kerry has promised to scrap the controversial US-Central American Free Trade Agreement (CAFTA) if elected president November 2.
US-Dominican Republic FTA plan suspended
The U.S. government has suspended plans to ratify a free-trade agreement with the Dominican Republic after lawmakers passed a 25 percent import tax on corn syrup last week, a top U.S. official said Monday.
U.S. Urges Dominican Over Corn Syrup Tax
A U.S. lawmaker urged the Dominican president Friday to veto a 25 percent import tax on corn syrup, warning it could bring an end to a free-trade agreement between the two countries.
Sugar beet farmers frame presidential election with troublesome trade deal
Sugar beet farmers in a rural Minnesota district that turned out solidly for President Bush in 2000 are having second thoughts about his re-election now that the administration is supporting a trade agreement they see as a threat.
Rough going for D.R. free-trade agreement
U.S. corn producers complained to U.S. Trade Representative Robert Zoellick after the Dominican Republic (D.R.) Congress decided to impose a 25% surcharge on imports of cheaper U.S. corn syrup for use as a sweetener.
The Future of Patentability in International Law according to the CAFTA
While discussions stagnate at the WTO over access to medicines, protection of indigenous knowledge and technology transfer, the United States and other developed countries multiply bilateral ‘TRIPs-plus’treaties with developing countries.