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Dominican Republic-central America Free Trade Agreement''Note: Within this article, "CAFTA" refers to the treaty as it stood before January 2004, and "DR-CAFTA" is used after that. The Dominican Republic-Central America Free Trade Agreement, more commonly known as DR-CAFTA, is a free trade agreement currently being negotiated. As CAFTA, the treaty originally encompassed the United States and the Central American countries Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua. In 2005, the Dominican Republic joined the negotations, and treaty became known as DR-CAFTA. Aims The goal of the agreement is the creation of a free trade zone, similar to the North American Free Trade Agreement (NAFTA) which currently encompasses the US, Canada, and Mexico. DR-CAFTA is also seen as a stepping stone towards the Free Trade Area of the Americas (FTAA), another, more ambitious free trade agreement which would encompass South American and Caribbean nations (with the exception of Cuba) as well. Canada is negotiating a similar treaty called the Canada Central American Free Trade Agreement. If passed by the congresses of the United States and the countries involved, tariffs on about 80% of US imports to the participating countries will be eliminated immediately and the rest will be phased out over the subsequent decade. With the addition of the Dominican Republic, the largest economy in the region, the region covered by DR-CAFTA is the US's second-largest Latin American export market, behind only Mexico, buying $15 billion of goods a year. Two-way trade amounts to about $32 billion. Support and Backing US President George W. Bush announced in January 2002 that CAFTA is a top priority for his administration, and Congress gave his administration "fast track" authority to negotiate it. Negotiations began in January 2003, and agreement was reached with El Salvador, Guatemala, Honduras, and Nicaragua on December 17, 2003, and with Costa Rica on January 25, 2004, and in that month, negotiations began with the Dominican Republic to join CAFTA. On February 20, 2004, President Bush informed Congress of his support for CAFTA. On May 28, 2004, United States Trade Representative Robert Zoellick, Costa Rican Minister of Trade Alberto Trejos, El Salvadoran Minister of the Economy Miguel Lacayo, Guatamalan Minister of the Economy Marcio Cuevas, Honduran Minister of Industry and Commerce Norman Garca, and Nicaraguan Minister of Development, Industry and Commerce Mario Arana signed the 2,400-page document at headquarters of the Organization of American States. Negotiations with the Dominican Republic concluded on March 15, 2004, and a second signing ceremony including Dominican Republic Minister of Industry and Commerce Sonia Guzman was held on August 5, 2004. Because of the lack of popular support, plus the opposition of civil society, many activist groups, left-wing political parties, and unions in Central America, DR-CAFTA is seen as a critical step towards FTAA (which also lacks popular support) by its backers, since imported and exported goods passing to and from the rest of Latin America will have to travel through this region. Without the participation of these countries, FTAA will be next to impossible. Robert Zoellick and corporate backers claim the agreement will open new markets to American manufacturers, and help the Central American nations modernize their economies, create worker rights protections that will enforce and improve labor laws, and improve environmental standards. DR-CAFTA is endorsed by the U.S. High-Tech Trade Coalition, fifty-two food and agriculture organizations, Microsoft and several Central American environmental organizations including Caribbean Conservation Corporation, Global Alliance for Humane Sustainable Development, and the Honduran Ecologist Network for Sustainable Development. Opposition and Resistance Public Citizen, the US advocacy group founded by Ralph Nader, says DR-CAFTA is based on the same "failed neoliberal model" as NAFTA and serves to "push ahead the corporate globalization model that has caused the 'race to the bottom' in labor and environmental standards and promotes privatization and deregulation of key public services." Public Citizen claims that independent farmers in America, Canada and Mexico have been hit particularly hard by NAFTA, with thousands wiped out and farmland shifting into the hands of huge agrobusiness concerns such as Tyson and Cargill; the group fears DR-CAFTA will have same effect in Central America. Many US environmental groups are opposed to the agreement, including the Sierra Club, EnviroCitizen and the Safe Earth Alliance. In May, 2004, the Salvadoran American National Network, the largest national association of Central American community-based organizations, along with other organizations representing Central American immigrants, expressed its opposition to CAFTA, saying: - Our opposition to CAFTA is not ideological. As immigrants, we have a deep understanding of the potential benefits of improved transnational cooperation. We would welcome an agreement that would increase economic opportunity, protect our shared environment, guarantee workers' rights and acknowledge the role of human mobility in deepening the already profound ties between our countries. However, the CAFTA agreement falls far short of that vision. http://www.citizenstrade.org/pdf/sann_caftastatement_may2004.pdf
Provisions DR-CAFTA encompasses the following components: - Services: all public services are to be open to private investment.
- Investment: governments promise to grant ironclad guarantees to foreign investment.
- Government procurement: All government purchases must be open to transnational bids.
- Market access: governments pledge to reduce and to eventually eliminate tariffs and other measures that protect domestic products.
- Agriculture: duty-free import and elimination of subsidies on agricultural products.
- Intellectual property rights: privatization of and monopoly over technological know-how.
- Antidumping rules, subsidies and countervailing rights: governments commit to phase out protectionist barriers in all sectors.
- Competition policy: the dismantling of national monopolies.
- Dispute resolution: the right of transnationals to sue countries in private international courts.
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