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Economic & Commercial Section

United States – Central America – Dominican Republic Free Trade Agreement (CAFTA-DR)

Nicaraguan exports to the United States have increased by approximately 70% since the United States - Central America - Dominican Republic - Free Trade Agreement (CAFTA-DR) went into effect for the United States and Nicaragua on April 1, 2006. Other signatories of the agreement are Costa Rica, the Dominican Republic, El Salvador, Guatemala, and Honduras. CAFTA-DR creates the second-largest U.S. export market in Latin America, behind only Mexico.

Most Dominican Republic and Central American exports into the United States have benefited from duty-free treatment as a result of a trade preference program provided by the U.S. Congress to promote regional economic development (the Caribbean Basin Initiative, CBI). CAFTA-DR reciprocally reduces tariff and non-tariff barriers for U.S. exports into the region.  CAFTA-DR also ensures that U.S. companies are not disadvantaged by the trade agreements that Central America has already negotiated with our NAFTA partners and other countries.

CAFTA-DR requires important reforms of the domestic legal and business environment that encourage competitive business development and investment, protect intellectual property rights, and promote transparency and rule-of-law in the democratic systems that have solidified in the region over the past decade. CAFTA-DR is an important instrument to support U.S. national security interests; the FTA promotes closer economic cooperation among the Central American countries, thereby advancing regional integration and contributing to greater peace and stability in the region.

Trade and Tariff Data

 

CAFTA-DR Background Information

 

CAFTA-DR Fifth Anniversary Highlights Nicaragua’s Forward Trajectory

On April 5, 2011, the United States Agency for International Development (USAID), INCAE Business School of Nicaragua, and the Economic Section of the U.S. Embassy in Managua collaborated to host a conference in commemoration of both the fifth anniversary of the United States – Central America – Dominican Republic Free Trade Agreement (CAFTA-DR) and the twentieth anniversary of a free market economy in Nicaragua. The Ambassador’s opening remarks highlighted the positive impact the agreement has had on trade flows between the United States and Nicaragua: Nicaraguan exports to the United States increased by 70% from 2005 to 2010. U.S. exports to Nicaragua increased by 57% during that period. Similarly, Nicaraguan exports to other CAFTA-DR countries increased by nearly 50% during the past five years.  The Ambassador also discussed progress on the Pathways to Prosperity Initiative ahead of the May Ministerial in Santo Domingo. He pointed out that Pathways is not another assistance program, but rather a means for all participating countries to share and implement best practices to take advantage of the economic benefits of trade. He echoed President Obama’s message in Chile about Latin American countries and the United States working as equals to solve problems.
 
USAID representatives underscored successes under their “Enterprise and Employment” program, which supports small and medium enterprise development, trade capacity building, and job training. Private sector and academic representatives underscored the importance of political stability and the rule of law for economic growth. The celebration publicized the fact that free trade has provided significant benefits to Nicaragua in terms of economic growth. Speakers discussed not only CAFTA-DR, but the immense challenges in trying to reconstruct the economy after communist rule ended in 1990.
 
In his opening remarks, Presidential Delegate for Investment Promotion Alvaro Baltodano discussed the positive
effect CAFTA-DR has had on investment promotion for Nicaragua. He discussed in particular the huge growth in
Nicaragua’s free trade zone as a result of CAFTA-DR and the large number of better-paying jobs this growth had provided.  Trade Minister Orlando Solorzano also attended the event and spoke with the press about the benefits that Nicaragua has enjoyed under CAFTA-DR. A series of panel presentations and discussions followed the opening remarks, which described how trade can promote inclusive growth and sustainable development. The panels underscored the importance of political stability, a legal framework that improves competitiveness, and the rule of law as essential for economic growth.  They also discussed the need for good infrastructure, financing, and strong institutions in order to take full advantage of the benefits CAFTA-DR offers.
 
In the atrium outside the conference venue, nearly three dozen booths featured exporters supported by USAID,
export development programs, and business associations. The ceremony concluded with the DCM and USAID officials recognizing the Nicaraguan CAFTA-DR negotiators with plaques of appreciation for their efforts.
 
News coverage of the Anniversary Event:

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News

  • Thread

    This year the Economic / Commercial Section of the United States Embassy in Managua is continuing with their outreach strategy, which includes meetings with various Chambers of Commerce throughout Nicaragua in order to promote the benefits of CAFTA-DR, and also to expand our business contacts and provide commercial services to local companies wishing to import products from the US. This program began last year and included visits to the cities of Estelí, Jinotega, León and Atlantic Coast cities such as Bluefields, Pearl Lagoon, and Corn Island.

    On Tuesday January 11, 2011, Economic Officer Maureen Murray, together with the Commercial Specialist Marixell García Zavala, traveled to Granada and Carazo, together with several local partners, including representatives from the Nicaraguan American Chamber of Commerce (AMCHAM), the Nicaraguan Center for Export Promotion and Investment (CEI), the Nicaraguan Exporters Association (APEN)  and the Nicaraguan Chamber of Commerce (CACONIC) in Managua. This trip included a meeting with members of the Chamber of Commerce in Granada, chaired by Mr. Oscar Gonzalez, followed by a second meeting in Jinotepe with members of the Chamber of Commerce of Carazo, chaired by Mr. Aquiles Jaen, President of the Chamber. At this meeting they spoke about the benefits of exporting and importing to and from the largest trading market in the world, and were invited to participate in various trade shows that will be held in the U.S. during 2011.

    The reaction and support we receive from the local chambers is always extremely positive. Mr. Osorio, President of the Chamber of Commerce in Leon said, “there is great enthusiasm from the private sector of León, especially since this is the first time we have a chance to meet with the Economic / Commercial Section of the US Embassy.” We hope to continue with our outreach program in 2011 and visit other cities, including Bilwi, Masaya, Rivas, and Boaco.

  • Thread

    This year the Economic / Commercial Section of the United States Embassy in Managua is developing an outreach strategy with the various Chambers of Commerce of Nicaragua in order to promote the benefits of CAFTA-DR, expand their business contacts, and provide business services to entrepreneurs. So far, there have been visits to the city of Jinotega and Atlantic Coast cities such as Bluefields, Pearl Lagoon, and Corn Island.

    On Monday June 14, 2010, Economic Officer Maureen Murray, together with the Commercial Specialist Marixell Garcia, were accompanied by the General Manager of the Nicaraguan American Chamber of Commerce (AMCHAM), Avil Ramirez, and Coordinator of the Export and Investment Center (CEI), Luz Marina Arana, during a working tour in the city of Esteli. This visit included a meeting with executives and members of the Chamber of Commerce in Estelí, chaired by Mr. Roberto Moncada, President of the Chamber. At this meeting they spoke about the benefits of exporting and importing to and from the largest trading market in the world, and were invited to participate in various trade fairs will be held in the U.S. during 2010. They also visited the cigar factory Plasencia, which generates more than 800 direct jobs and exports more than 4 million cigars annually, mainly to the U.S. market.

    Estelí entrepreneurs were happy to receive the visit by the Economic/Commercial Section of the Embassy of the United States, AMCHAM and CEI. Estelí is considered the second most developed region in Nicaragua, according to Mr. Moncada, and "fought for the passage of CAFTA." He and his managers were grateful for the interest of the Embassy and the other institutions, and hope to see the results of this alliance soon.

    The next visits that the Economic/Commercial Section plans to make are to Chinandega, León, Boaco, Masaya, Granada and Rivas.