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Consumers wait in vain for FTA price reductions

Dominican Today, Dominican Republic

Consumers wait in vain for FTA price reductions

9 June 2007

Santo Domingo.- The president of the Dominican Association of Wholesale Importers (ASODAI) Manuel Cabrera says that price reductions are being introduced gradually with the tariff reductions that have come about with the entry into effect of the DR-CAFTA treaty. However, fewer products than originally hoped are affected.

The expectations created by the treaty are not matched by reality, said Cabrera, who said he did not understand why the government does not insist on reducing the price of basic products.

He said that the main articles affected where electro-domestic appliances imported from the United States.

“You can see that an American TV costs about US$200, that is the same as it costs there”, said the businessman.

In contrast, he said that “Very few American branded cars will go down in price as a result of the free trade agreement, because even though they are from the United States, they are manufactured and imported from other countries, or do not comply with the regulations”.

He said there would not be any great variation in the prices of basic consumer items “because they ones in the basic family basket already had a reduced tax rate of 3% and this is not much greater than a 0% rate”.

One product that many consumers hoped would go down in price was disposable diapers, and Cabrera said that “the best selling brands are imported from Costa Rica and Trinidad, and their tax rate had already been reduced.

As for basic foods like cod and herring, Cabrera said that the last tax reform had eliminated the 13% exchange rate tax but they were affected by the increase in VAT (ITBIS) so the prices had remained more or less the same.