Non-tariff barriers (Table 2) will also be removed as part of the agreement. For example, tariff quotas (TRQs) for a subset of foodstuffs are increased. These foodstuffs are generally “sensitive products” with the highest average tariffs imported into countries with relatively high quantities (11). Most TRQs for these products will gradually increase over the next ten years, with annual rates of 2 to 5%. Since the high level of tariffs on these products only relates to unemployment rates (compared to IN-TRQ amounts), the increase in the size of trqs will stimulate imports of these products faster than the rate of increase in the tariff reduction schedule. Trade and economic growth promote prosperity, stability and opportunity for the citizens of their home countries. CAFTA-DR`s rule of law requirements and transparent and fair public policy procedures create a better climate for investment and business. A better economic environment creates communities in which citizens can prosper and young people have a chance to have a productive future at home. CAFTA-DR will make it easier for U.S. agricultural and agricultural producers to export abundant and low-cost meat and feed to the United States.
These include swine meat, poultry, soy flour and yellow corn, as well as more expensive “Prime” and “Choice” cuts of beef. With lower tariffs and higher TRQs, CAFTA-DR`s recognition of the U.S. meat inspection system should facilitate trade and reduce potential trade disputes related to food security. As Table 5 shows, the U.S. meat industry, including the American Meat Institute, the National Pork Producers Council, the National Chicken Council and the American Soybean Association, have strongly supported CAFTA-DR. Trade liberalization in Central America has been underway since the 1980s, when the U.S.-backed Caribbean Basin Initiative (1983) granted tariff and trade benefits to Central American and Caribbean countries exporting to the United States. Since then, Central American countries have continued to open their borders to increase trade with the United States and other countries, culminating in 2006 with the Central American-Dominican Republic Free Trade Agreement (CAFTA-DR), the largest trade agreement ever signed in the Central American region (9). Like the North American Free Trade Agreement (NAFTA) signed in 1994 by the United States, Canada and Mexico, CAFTA-DR aims to facilitate trade in goods, investment and services between the United States and participating countries (in this case Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic). CAFTA-DR was signed in 2004 by contract participants and had an initial target date for implementation on January 1, 2006 (10).
The effective implementation of CAFTA-DR has been on an ongoing basis. In the United States, the law was ratified in 2005. El Salvador ratified the agreement on 1 March 2006, followed by Honduras and Nicaragua on 1 April 2006, Guatemala on 1 July 2006 and the Dominican Republic on 1 March 2007. After much debate, a referendum approved the agreement on 7 October 2007 in Costa Rica. The CAFTA-DR contains certain provisions which do not have the quality of mere technical liberalization, but rather are a commitment to political standards.