U.S.- CAFTA-DR Free Trade Agreement

Overview of Sectoral Benefits

ENHANCED MARKET ACCESS TO THE DOMINICAN REPUBLIC AND CENTRAL AMERICA: LATIN AMERICA'S NEWEST EMERGING MARKETPLACE

The CAFTA-DR provides new market access for U.S. consumer, industrial and agricultural products. More than eighty percent of U.S. exports of consumer and industrial products to Central America and the Dominican Republic became duty-free immediately upon entry into force of the Agreement, with remaining tariffs on these products phased out over ten years. Key U.S. exports, such as information technology products, agricultural and construction equipment, paper products, chemicals, and medical and scientific equipment gained immediate duty-free access to Central America and the Dominican Republic. The following provides information on tariff elimination for U.S. exports provided by CAFTA-DR for consumer and industrial product sectors:

Aircraft and Related Parts

Nearly 100% duty-free on all aircraft and related parts exports immediately upon implementation

Building Products

55% of U.S. building products exports are duty-free upon implementation, 9% over 5 years, 36% over 10 years, 7% subject to non-linear tariff elimination

Capital Goods

92% overall of capital goods tariffs are duty-free upon implementation, 2% over 5 years, 6% over 10 years
100% for agricultural equipment
95% for construction equipment, 4% over 5 years, 1% over 10 years
100% for printing, publishing, and converting equipment duty-free upon implementation
94% of tariffs on woodworking machinery, 6% over 10 years

Chemicals

74% of chemical industry exports are duty-free upon implementation, 9% over 5 years, 17% over 10 years, 3% will be subject to non-linear tariff elimination.
88% of pharmaceuticals duty-free upon implementation, 12% over 5 years
91% of fertilizer and agro-chemicals duty-free upon implementation, 9% over 5 years
33% of cosmetics duty-free upon implementation, 35% over 5 years, 32% over 10 years, 4% will be subjected to non-linear tariff elimination

Consumer Goods

39% overall of consumer goods are duty-free upon implementation, 10% over 5 years, 50% over 10 years, 10% will be subjected to non-linear tariff elimination
Furniture: 6% duty-free upon implementation, 13% over 5 years, 81% over 10 years
Toys: 31% duty-free upon implementation, 4% over 5 years, 65% over 10 years
Gems/Jewelry: 92% duty-free upon implementation, 1 % over 5 years, 7% over 10 years
Recreational/Sporting Goods: 56% duty-free upon implementation, 16% over 5 years, 28% over 10 years, 6% will be subjected to non-linear tariff elimination

Electronic and Instrumentation

99% duty-free upon implementation, 1% over 10 years
100% of information technology agreement products and scientific equipment
98% of medical equipment duty-free upon implementation, 2% will be subjected to non-linear tariff elimination

Energy

96% duty-free upon implementation, 2% over 5 years, 2% over 10 years

Environmental Goods

77% duty-free upon implementation, 5 % over 5 years, 18% over 10 years
(if miscellaneous plastic products were excluded, then nearly 100% would be duty-free upon implementation)

Ferrous Ores and Metals

73% duty-free upon implementation, 2% over 5 years, 25% over 10 years
70% of U.S. steel duty-free upon implementation, 1% over 5 years, 29 % over 10 years

Fish

90% duty-free upon implementation, 6% over 5 years, 4% will be subjected to non-linear tariff elimination

Footwear, Leather, and Leather Goods

39% duty-free upon implementation, 25% over 5 years, 36% over 10 years
27% of exports subjected to non-linear tariff elimination  (Rubber footwear, sandals, boots, and belts are examples of products will be 10-year staging in certain countries)

Lumber and Wood

79% duty-free upon implementation, 6% over 5 years, 15% over 10 years
Tariffs on most wood products, including fiberboard and plywood will be phased out either immediately or in 5 years, depending on the country

Non-Ferrous Ores and Metals

Overall 70% duty-free upon implementation, 18% over 5 years, 12% over 10 years
7% will be subjected to non-linear tariff elimination
78% non-ferrous metals duty-free upon implementation, 5% over 5 years, 16% over 10 years, 5% will be subjected to non-linear tariff elimination
93% copper products duty-free upon implementation, 6% over 5 years, 1% over 10 years

Paper

78% duty-free upon implementation, 5% over 5 years, 17% over 10 years
3% will be subjected to non-linear tariff elimination

Transportation Equipment

Overall, 49 percent of U.S. transportation equipment exports are duty-free treatment immediately upon implementation.  Tariffs on 11 percent of exports will be eliminated over five years with equal cuts and another 2 percent will be eliminated over five years with a one-year deferment of cuts.  Duties on the remaining 38 percent of U.S. exports will be eliminated over ten years.