Economic/commercial Section
United States – Central America – Dominican Republic Free Trade Agreement (CAFTA-DR)
Bilateral trade between the United States and Nicaragua has increased by approximately 36% 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 (entry into force pending), the Dominican Republic, El Salvador, Guatemala, 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.
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CAFTA-DR Background Information
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