What is in this article?:
- Peeling back the CAFTA layers
- Sanitary issues
- The U.S. continues to face increased competition in markets as CAFTA-DR countries sign FTAs with other countries such as the EU. An advantage in these markets is that the U.S. was first with an FTA rather than catching-up with other countries.
The U.S. is also gaining on sanitary and phyto-sanitary issues that are equal in importance with tariff reductions. The CAFTA-DR countries are moving toward recognizing the U.S. meat inspection system as equivalent to their own which will simply exporting meat. As noted earlier, red meat volume was up 244 percent and poultry meat was up 97 percent. Countries that emphasize tourism are growing markets for U.S. meat. Further integration of agriculture among the countries will be helpful on issues like pest control in fruits and vegetables and livestock diseases.
The Obama Administration has also used the labor policy provisions of CAFTA. In August of last year, U.S. Trade Representative Ron Kirk in a letter to the Guatemalan Minister of Economy requested an arbitration panel “with respect to the effective enforcement of Guatemalan labor laws related to the right of association, the right to organize and bargain collectively, and acceptable conditions of work.” The U.S. had earlier asked for consultations on the issues which did not resolve them. The establishment of an arbitration panel was required upon request of the U.S. The case is ongoing.
The U.S. continues to face increased competition in these markets as CAFTA-DR countries sign FTAs with other countries such as the EU. An advantage in these markets is that the U.S. was first with an FTA rather than catching-up with other countries. Increased trade among the six CAFTA-DR countries has also occurred.
The greatest growth has occurred in the further processed and consumer-oriented products as would be expected. The U.S. was the primary supplier of the basic commodities where lack of sufficient domestic production has long driven increased trade. Some of the largest tariff reductions are in processed and consumer products and more tariff reductions and increased tariff rate quotas will occur in the immediate years ahead. The Foreign Agricultural Service notes that they continue to work to improve the transparency and predictability of TRQ administration in the region and reduce delays in approving some registrations and certificates.
The long-term growth for these markets will ultimately be determined by economic growth and a larger middle class. Economic growth in 2011 ranged from 4.5 percent in the Dominican Republic to 2.0 percent in El Salvador. The World Bank’s Cost of Doing Business index for 183 countries found the six CAFTA countries ranked from Guatemala at 97 to Honduras at 128in the ease of doing business. Regardless of the rate of market growth, CAFTA-DR gives U.S. agricultural suppliers a competitive position in these markets.