U.S. Prepares to Proceed With CAFTA Without the Dominican Republic
In a letter to the Chairman of the Senate Finance Committee, the U.S. Trade Representative (USTR) outlines the Bush Administration's plans for moving forward, if necessary, with a Central American Free Trade Agreement (CAFTA) that includes the U.S. and five Central American countries, but not the Dominican Republic.
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(According to the USTR, the Dominican Republic recently imposed a 25% tax on beverages containing high fructose corn syrup (HFCS) and that the tax is incompatible with the Dominican Republic's obligations under the new free trade agreement (FTA). The USTR states that in September 2004, he informed the President of the Dominican Republic that he could not recommend including the Dominican Republic in the FTA package for consideration by Congress if the HFCS tax became law.)
Specifically, the USTR states that he has asked his staff to forward to the Central American governments the text of the FTA that excludes the Dominican Republic. This version eliminates those provisions specifically applicable to the Dominican Republic, but is otherwise identical to the FTA that was signed by the five Central American governments on August 5, 2004. This version of CAFTA is now available on the USTR Web site (see below).
The USTR states that he has also asked the International Trade Commission (ITC) to asses the likely impact of a FTA with Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua on the U.S. economy, on specific industry sectors, and on U.S. consumers. (The ITC has already reported on the likely impact of a FTA that includes both Central America and the Dominican Republic.)
The USTR notes that the U.S. continues to work with the Dominican Republic to address the HFCS matter in a way that would allow the Dominican Republic to join the
Central American partners and the U.S. in the FTA; however, the U.S. is preparing for the possibility that it will need to move forward to implement a FTA with Central America alone.
USTR letter (dated 11/16/04) available at http://www.ustr.gov/assets/Document_Library/Letters_to_Congress/2004/asset_upload_file350_6882.pdf.
Revised draft text of CAFTA (without Dominican Republic) available at