CAFTA

The World Trade Center has been receiving numerous inquiries about the U.S.-Dominican Republic-Central America Free Trade Agreement (CAFTA) since its passage by the U.S. Congress and President Bush's signing it into law on August 2. The agreement has now been formally ratified by the U.S., El Salvador, Guatemala, and Honduras and is expected to be submitted soon to the Congresses of Costa Rica, the Dominican Republic, and Nicaragua for their final approval.

CAFTA Information and Key Contacts

When implemented in the coming months by the participating countries, CAFTA will eliminate tariffs and other trade barriers and expand regional opportunities for the manufacturers, workers, consumers, farmers, ranchers, and service providers of those countries. The five Central American countries and the Dominican Republic already enjoy duty-free access into the United States for approximately 80% of their exports (99% for agricultural products) under the Caribbean Basin Initiative and other unilateral preference programs, while U.S. goods exported to those countries face significant tariffs and other barriers.

The CAFTA agreement will rectify this imbalance and open up the CAFTA markets to U.S. goods, services, and farm products. The tariffs on more than 80% of U.S. exports of consumer and industrial products and 50% of U.S. agricultural products exported to the CAFTA countries will be duty-free immediately upon implementation of the agreement, with most remaining duties phased out over 10 years (up to 15-20 years on certain agricultural products). The best prospects for Louisiana exports to the CAFTA market include chemicals, plastics, paper, industrial machinery, transportation equipment, processed food, rice, cotton, soybeans, meat, and poultry products.

In 2004 the CAFTA region, at nearly $16 billion, ranked as the United States' 12th largest export market, which was a greater volume of U.S. export sales than to Russia, India, and Indonesia combined. As for Louisiana exports, the CAFTA region ranked fifth worldwide with $1.2 billion in 2004. The state's exports to the CAFTA countries were equal in value to its exports to Germany, the United Kingdom, France, and Italy combined.

In comparison with other U.S. states, Louisiana was first in agricultural exports and fourth in total merchandise exports to the CAFTA countries in 2004. Broken down by industry, the top Louisiana exports to the CAFTA market were agricultural products, processed foods, petroleum and coal, chemicals, paper, machinery, and transportation equipment.

Louisiana is well-positioned to capitalize on the new opportunities offered through CAFTA because of the state's proximity to the region and its longstanding commercial and personal ties with the CAFTA countries, plus its world-connected deepwater port system linked to over 30 Midwestern states via the Mississippi River.

In the weeks and months ahead the WTC will be working with many other Louisiana organizations in organizing CAFTA-related promotional seminars, technical workshops, and other events. For details, Click here.

For additional CAFTA-related information and useful contacts, see the above links.

Email this page to a friend

Click here to sign up to receive the Louisiana International Trade Bulletin
and other WTC announcements by e-mail.