CENTRAL AMERICA: CAFTA-DR
The United States signed the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR), in force since 2009, with five Central American countries – Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua – and the Dominican Republic.
The CAFTA-DR is the first free trade agreement between the United States and a group of smaller developing economies. This agreement is creating new economic opportunities by eliminating tariffs, opening markets, reducing barriers to services, and promoting transparency. It is facilitating trade and investment among the seven countries and furthering regional integration. The Standards Alliance will engage regionally with CAFTA-DR countries, as well as on a country-specific basis as appropriate.
Priority Sectors
Industry sectors identified so far as priorities include processed food, building products, automotive, medical devices, electronics, telecommunications equipment, and renewable energy. Additional sectors may be added based on interest from the private sector in either country.
Relevant Agreements and Regional Organizations
- WTO Agreement on Technical Barriers to Trade (TBT)
- CAFTA-DR Free Trade Agreement (FTA)
- U.S.-Panama Trade Promotion Agreement (TPA)
- Pan American Standards Commission (COPANT)
- Inter-American Accreditation Cooperation (IAAC)
- Inter-American Metrology System (SIM)
Additional Information
COSTA RICA
Although Costa Rica’s economy contracted as a result of the global economic crisis, it has picked up again in recent years. In 2012, the country’s GDP grew 5 percent. U.S.-Costa Rica bilateral trade continues to grow under the U.S.-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR), which was signed in 2004 and went into effect in 2009. In 2012, U.S. goods exports to Costa Rica totaled USD 7 billion while goods imports from Costa Rica totaled USD 12 billion, bringing two-way trade in goods to a U.S. deficit of USD 5 billion. The most common products exported from the United States to Costa Rica include: mineral fuel, electrical machinery, machinery, plastic, and optic and medical instruments. Common goods imports from Costa Rica include: electrical machinery, optic and medical instruments, edible fruit and nuts, and spices, coffee, and tea.
DOMINICAN REPUBLIC
The Dominican Republic’s economy has showed signs of diversification in recent years, and its trade relationship with the United States continues to serve as a growth engine. Bilateral trade is reinforced by the U.S.-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR), which was signed in 2004 and went into effect in 2009. In 2012, the country’s GDP grew by almost 4 percent. U.S. goods exports to the Dominican Republic in 2012 totaled USD 7 billion while goods imports from Costa Rica totaled USD 4 billion. The resulting balance of trade in goods was a U.S. surplus of approximately USD 3 billion. Top U.S. goods exports to the country include mineral fuel, electrical machinery, machinery, vehicles, and cotton yarn and fabric. Top goods imports from the Dominican Republic include optical and medical instruments, precious stones, electrical machinery, tobacco, and knit apparel.
EL SALVADOR
Although small in geographic size, El Salvador’s economy is a vibrant one. In 2012, the country’s GDP grew by almost 2 percent. The country’s bilateral trade relationship with the United States is anchored by the U.S.-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR), which was signed in 2004 and went into effect in 2009. In 2012, U.S. goods exports to El Salvador totaled USD 3 billion while goods imports from the country totaled approximately USD 3 billion. Two-way trade in goods for that year, a U.S. surplus of USD 509 million, was down from USD 884 million in 2011. Top U.S. goods exported to El Salvador include: mineral fuel, cereals, machinery, and cotton yarn and fabric. Top goods imported from El Salvador include: knit apparel, woven apparel, spices, coffee, precious stones, and sugars.
GUATEMALA
Guatemala is the most populous country in Central America. Its economy has benefited from the U.S.-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR), which was signed in 2004 and went into effect in 2009. Its GDP grew by 3 percent in 2012, down from 4 percent in 2011. U.S. goods exports to Guatemala in 2012 reached USD 5.7 billion while goods imports from Guatemala reached USD 4.5 billion. Two-way trade in goods for that year, a U.S. surplus of USD 1.3 billion, is down slightly from the 2011 U.S. trade surplus of USD 1.4 billion. Top U.S. goods exports to Guatemala include mineral fuel, machinery, cereals, and electrical machinery. The most common goods imported into the United States from Guatemala include knit apparel, precious stones, edible fruit and nuts, spices, coffee and tea, and woven apparel.
HONDURAS
Although Honduras has diversified its export base in recent years, its economy remains one of the poorest in the region. In 2012, the country’s GDP grew by 3 percent to USD 38 billion. U.S.-Honduras trade is anchored by the U.S.-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR), which was signed in 2004 and went into effect in 2009. In 2012, U.S. goods exports to Honduras totaled USD 5.7 billion while U.S. goods imports from Honduras were approximately USD 4.6 billion. Two-way trade for the same year, a U.S. surplus of approximately USD 1 billion, was down slightly from the 2011 surplus of USD 1.6 billion. U.S. goods exported to Honduras typically include mineral fuel, cotton, yarn and fabric, electrical machinery, and man-made staple fibers. Top goods imported from Honduras include knit apparel, woven apparel, electrical machinery, edible fruit and nuts, spices, tea, and coffee.
NICARAGUA
Although Nicaragua’s GDP grew by 5 percent in 2012, the country remains one of the poorest in the Western Hemisphere. U.S.-Nicaragua trade has benefitted from the U.S.-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR), which was signed in 2004 and went into effect in 2009. U.S. goods exports to Nicaragua in 2012 totaled USD 1 billion while U.S. goods imports from Nicaragua totaled USD 2.7 billion, bringing two-way trade, a U.S. deficit, to USD 1.6 billion. Top U.S. goods exports to Nicaragua include machinery, cereals, electrical machinery, and fats and oils. Top goods imported from Nicaragua include knit apparel, woven apparel, electrical machinery, spices, coffee and tea, and meat.
PANAMA
The Panama Canal has proven a driver of Panama’s economic growth. In 2012, Panama’s GDP grew 10 percent to a total of USD 58 billion. U.S.-Panama trade is expected to expand under the U.S.-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR), which was signed in 2004 and went into effect in 2009. In 2012, U.S. goods exports to Panama reached USD 9.8 billion while U.S. goods imports from Panama totaled USD 540 million, bringing the balance of trade, a U.S. surplus, to USD 9.2 billion. Top U.S. goods exports to Panama include mineral fuel, machinery, aircraft, and electrical machinery. Top goods imported from Panama into the United States include fish and seafood, precious stones, sugars, and edible fruits and nuts.
