bilaterals.org logo
bilaterals.org logo
  1. Negotiations

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
Photo: Public Citizen

CAFTA on the ropes: Agreement must protect people and the environment
29-Jun-2005 Voice of San Diego
The lack of worker and environmental protections leads the list of concerns as CAFTA is modeled after the failed 1994 North American Free Trade Agreement, or NAFTA. At its 10-year anniversary, the verdict on NAFTA is in: It is an economic, social and environmental failure.
US trade rep helps powerful drug industry
28-Jun-2005 Seattle Post Intelligencer
When George W. Bush and the U.S. pharmaceutical industry team up in Washington, you know it’s bad news for U.S. consumers. Now they are taking their show on the road — to Central America.
CAFTA deserves a quiet death
27-Jun-2005 Znet
The White House’s failure to push forward its latest "free trade" deal is a victory for working people throughout the Americas.
Urge Congress to vote NO on CAFTA!
27-Jun-2005 Global Exchange
Global Exchange, an international human rights organization, calls on citizens across the country to make their voices heard with their elected officials in opposition to CAFTA.
Bush likely to pay high price for CAFTA accord
27-Jun-2005 Financial Times
A US trade official acknowledged that the lack of Democratic support [for the congressional vote on CAFTA] “means we are going to have to make some trade-offs with elements of the Republican party that do not normally support trade agreements. That will probably involve making some uncomfortable deals.”
Conversation: Rob Portman
25-Jun-2005 Public Broadcasting Service
Rob Portman, the new US trade representative, discusses the US trade deficit with China and the controversial Central America Free Trade Agreement.
Latinos debate free trade’s cost
27-May-2005 Washington Post
In the Dominican enclave of Upper Manhattan, where street life thrives on mom-and-pop stores and the sound of bachata, trade debates are scrutinized through the lens of daily survival in the city and on the island.
Bad and getting worse
18-May-2005
As North American citizens, we have an obligation to stand with the people of Central America in their struggle for just and sustainable development. CAFTA’s backers are pushing for a vote in Congress this month. We must send a strong message to our elected officials that CAFTA, and the faulty economic model it represents, is unacceptable.
Free trade pact faces trouble in Congress
10-May-2005 New York Times
The current centerpiece of President Bush’s trade agenda, the Central American Free Trade Agreement, is facing unusually united Democratic opposition as well as serious problems in overcoming well-entrenched special interest groups like sugar producers and much of the textile industry.
Dominican president to visit US for FTA
6-May-2005
Dominican President Leonel Fernandez will visit the US next Monday to attend a meeting convened by President George W Bush to examine free trade agreements (FTA) together with several Central American counterparts.