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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
Photo: Public Citizen


Guatemala joins trade agreement
A free-trade agreement with Central America inched closer to completion with the announcement that Guatemala will join three nations already in the pact today.
Guatemalans Occupy Farms Rejecting FTA
Guatemalan farmers occupy Sunday six state farms in the country’s north and eastern regions for three consecutive days, protesting against the Free Trade Agreement (FTA) with United States.
Duty-free zone firms lose contracts with Free Trade delay
Entrepreneurs from Santiago and the duty-free zones in the country are concerned about effects that would be brought about by a new postponement of the Free Trade Agreement between Central American and the United States (DR-CAFTA).
The U.S. isn’t pressuring Dominican Republic, ambassador says
United States ambassador Hans Hertell denied yesterday that his nation is making last minute for incorporating the Dominican Republic to the Free Trade Agreement in July, affirming that what the U.S. only expects is that the Caribbean nation complies with what it originally negotiated and signed.
Crucial week for Free Trade set to start on the 1st
As of this upcoming weekend, the government faces two important challenges: Friday, June 30th is the last day for the legal standing of the 13% tax on imports, and on the next day, the 1st of July, the Free Trade Agreement (FTA) is scheduled to start.
Bear Stearns doubts short delay onto DR-CAFTA would affect investment
A short term delay before implementing the DR-CAFTA trade accord should not significantly affect investment plans in the country, according to the U.S. investment company, Bear Stearns.
CAFTA threatens small farmers
Three times a week, Julian Mux walks two hours from his small parcel of land in the Guatemalan highlands to the nearest road, carrying just-harvested miniature zucchini that will end up in U.S. supermarkets.
Eleven days till Free Trade and doubts linger on
Only eleven days before the scheduled date for entering the DR-CAFTA trade accord, officials doubt that the stipulated time slot will be met, because, according to them, the Dominican Republic is in no condition to render to new U.S. exigencies by July 1st.
Small farmers wary of CAFTA
Whether the nation is ready or not, the 800-page DR-CAFTA treaty, replete with new rules and regulations, is set to become reality for the country.
Guatemalan bishop: Free trade widens gap between rich, poor
Free trade under the current economic rules can only widen the gap between rich and poor in the Americas, said the head of the Guatemalan bishops’ conference.