RESTRICTEDWORLD TRADE
ORGANIZATIONWT/TPR/G/105
9 September 2002
(02-4687)
Trade Policy Review Body Original:  Spanish
TRADE POLICY REVIEW
DOMINICAN REPUBLIC
Report by the Government
Pursuant to the Agreement Establishing the Trade Policy Review Mechanism
(Annex 3 of the Marrakesh Agreement Establishing the World Trade
Organization), the trade policy statement submitted by the Government of the
Dominican Republic is attached.
Note: This report is subject to restricted circulation and press embargo until the end of the meeting
of the Trade Policy Review Body on Dominican Republic.Dominican Republic WT/TPR/G/105
Page 3
TABLE OF CONTENTS
Page
INTRODUC TION ................................................................................................................... ............. 5
I. MACROECONOMIC EN VIRONMENT ............................................................................... 5
II. CURRENT MULTILATERAL  TRADE NEGOT IATIONS ................................................ 11
III. TRADE POLICY REGIME .................................................................................................. 12
CONCLU SIONS.................................................................................................................... ............. 14
ANNEX .......................................................................................................................... .................... 15Dominican Republic WT/TPR/G/105
Page 5
INTRODUCTION
1. Over the past six years, the Dominican Repu blic's economy has had one of the strongest
growth rates in Latin America and the world.  To a large extent, this was due to macroeconomic
stability, increased openness and large-scale participation by the private sector in the economy.  At the
same time, the Dominican Republic signed important free trade agreements with the Central
American Common Market and the Caribbean Community so as to expand trade with these countries.The Dominican Republic also participates extensively and actively in a number of multilateral and
regional forums, especially the World Trade Organization, and in the negotiations on the Free Trade
Area of the Americas (FTAA).
2. In addition, the Dominican Republic has undertaken far-reaching reforms, which include new
foreign investment legislation, new custom s procedures, the promotion of exports,
telecommunications, electricity, intellectual property, hydrocarbons, tariff and tax measures, and a
broad capitalization process that encompasses joint investment by the government sector and private
investors in a number of State enterprises producing electricity, sugar, certain goods and services,
inter alia .
3. This statement will focus on a number of issues, including the economic environment and the
reform and opening processes;  current multilateral and regional trade negotiations;  trade policy
objectives;  and conclusions.
I. MACROECONOMIC ENVIRONMENT
4. The Dominican Republic's economic performance during the period 1996-2001 was
remarkable and its gross domestic product rose at an average annual rate of 6.8 per cent, which is
4.2 percentage points higher than the growth rate for Latin America as a whole over the same period.
Even in 2001, when this high rate of growth came to a halt, the Dominican Republic's GDPnevertheless grew at a rate that was 5.4 times high er than the average in the region.  The downturn in
external demand as a result of a general weakening of the global economy caused a brusque shock
that had a negative effect on production over the past year.
5. There was particularly strong growth in communications, construction, electricity, tourism,
trade, and manufactures during this period.  New sectors emerged to replace the more traditionalsectors in the national production structure, thereby causing significant changes in the population's
way of life.  The reason for this dynamism can be found in the economic policy action taken to
enhance the accumulation of capital through domestic savings, raise the competitive capacity of
human resources, and provide facilities for business activities.
6. Current per capita GDP in the Dominican Republic in dollar terms increased at an average
annual rate of 7.2 per cent, which is higher than the average of only 1.2 per cent reached in Latin
America and the Caribbean over the same period.  This indicator shows that there has been an
improvement in the population's living standards.
7. The prudent macroeconomic policy implemented by the Dominican authorities since the last
trade policy review in 1996 and up to 2001 enabled this high annual rate of growth to be achieved, inconjunction with a low rate of inflation averaging 6.44 per cent calculated in December each year.
The average level of consumer prices was much lower than elsewhere in the Latin American region
and amounted to 10.72 per cent over the period.  The Dominican Republic's low level of inflation is to
a large extent due to the stable exchange rate.WT/TPR/G/105 Trade Policy Review
Page 6
8. As regards production and employment, the Dominican Republic has a population of around
8.9 million.  Over the past 50 years, the rate of population increase has gradually been falling.
Consequently, the economically active population has been going down in recent years with a growth
rate of 4.5 per cent, whereas the working population has been rising at a rate of 4.8 per cent.  The
demographic transition can also be seen in the figures for those employed, 72.2 per cent of whom
were in urban areas in 2001 compared with 27.8 per cent in rural areas.  One interesting feature thatneeds to be underlined is the increasingly important role played by women in production, with an
annual cumulative rate of growth of 7.3 per cent, whereas for men the figure was only 3.6 per cent.
9. The production sector, employs the largest number of people in the Dominican Republic, with
services accounting for 58.6 per cent during the period 1996-2001, followed by manufacturing with a
figure of 24 per cent and agriculture with 17.4 per cent. Agriculture's share of the labour market hasnevertheless been decreasing, from 16.5 per cent in 2000 to 15.1 per cent in 2001.  The rise in the
demand for jobs in the services sector is directly linked to this sector's share of the GDP, which
amounts to an average of 57 per cent.  The manufacturing sector accounts for an average of 29.2 per
cent and the primary sector for 13.8 per cent.
10. It is important to note that the unemployment situation in the Dominican Republic, calculated
on the basis of open unemployment, was only 6.1 per cent over the period under review, which is
lower than the figure of 8.1 per cent for Latin America as a whole.
11. Concerning the Dominican Republic's fiscal policy, there was a sustained annual increase of
14.4 per cent in fiscal revenue, and an increase of 16.3 per cent in spending.  The ratio between
current GDP for both revenue and spending remained virtually the same from 1996 to 2001.  The
figures show that there were only two years of deficit over the period, which highlights the fiscal
discipline exercised by the government authorities.
12. With regard to 2001, after curbing spending during the first nine months of the year, in the
last quarter the Government implemented an expansive policy so as to boost internal demand and,
thereby, production.  Even so, due to the performance in 2000, the consolidated public sector
managed to lower the deficit from 2.2 per cent as a proportion of GDP to 1 per cent in 2001.
13. The central Government generated an equivalent budgetary surplus amounting to an average
of 0.5 per cent of GDP over the period.  Local spending rose by 21.9 per cent in 2001 as a result of the
9.7 per cent increase in current expenditure caused by a rise in the number of people employed and in
wages.
14. The fiscal reform yielded good results.  Tax revenue increased by 16.7 per cent in current
terms, and this was reflected in the level of fiscal pressure, which rose from 14.7 per cent in 1996 to16.7 per cent in 2001.  This was achieved despite the decline in revenue due to the tariff reductions
adopted upon the Dominican Republic's accession to the World Trade Organization (WTO).  In
conjunction with the tariff reductions, the tariff structure was simplified and divided into five tariff
rates of 0 per cent, 3 per cent, 8 per cent, 14 per cent and 20 per cent.  Revenue from import duties
rose by 30.8 per cent and accounted for 28 per cent of the total taxes received.  This was due to themeasures taken to broaden the tax base.  The tax reform set a maximum rate of 25 per cent for income
tax and also introduced a minimum tax of 1.5 per cent on gross sales for companies with sales
exceeding RD$6 million, as well as an advance on income tax.
15. Revenue from taxes on goods and services amounted to 20.3 per cent annually, providing on
average over 40 per cent of total revenue.  Taxes paid in the form of the tax on the transfer ofDominican Republic WT/TPR/G/105
Page 7
industrialized goods (ITBIS) increased at an annual rate of 25.3 per cent.  It should be noted that, in
2001, as a result of the increase in the rate from 8 per cent to 12 per cent and the abolition of
exemptions, together with the broader tax base, the increase was 27.9 per cent and accounted for over
53 per cent of taxes on goods.  The selective consumption tax and the petroleum differential tax were
also the subject of reforms and rose by 22.9 per cent overall.  In November 2000, the mechanism for
taxing fuel (known as the petroleum differential) was modified and a fixed tax per gallon was set foreach product instead of the previous policy of fixed prices, which led to a fall in tax revenue as a
result of the rise in international petroleum prices.  In addition, taxes on rum and other alcoholic
beverages rose from 25 per cent to 35 per cent and the tax on beer from 20 per cent to 25 per cent.
Monetary and Exchange Policy
16. The fundamental objective of the Dominican mone tary authorities is price stability as the
major element of its monetary policy so as to boost growth and enable reserves to be built up through
the formulation of a monetary programme that is reviewed at least once every quarter, taking into
account internal seasonal factors affecting the economy and any impact caused by the international
economy or unforeseen circumstances.
17. The principal policy instrument used by the Central Bank has been open market operations
and, in the light of the situation, it imposes maximum ceilings on credit.  This has made it possible to
keep inflation low and achieve remarkable growth.
18. Monetary creation in the Dominican Republic increased at an average rate of 16.3 per cent.
In December 2001, it closed the year with an increase of 16.5 per cent in comparison with the
previous year, notably due to the exchange of sovereign bonds and the refund of share certificates
owned by the public and issued by the Central Bank.
19. Furthermore, the money supply rose at an average annual rate of 11.9 per cent.  In 2000, this
figure fell by 10.1 per cent, but in 2001 it rose by 24.7 per cent, which underlines the recovery in
demand for money by economic agents in response to the lower rates of interest and the upturn in the
Dominican economy.
20. To a large extent, the channelling of resources to the economy has been adequately covered
by the commercial bank and the various services in the Dominican Republic, and this can be seen
from the average annual figure for loans, which rose by 28.3 per cent while deposits increased by
23.3 per cent.
21. The Central Bank of the Dominican Republic has kept inflation under control with an average
rate of 6.44 per cent over the period.  The weighted average active interest rate fluctuated, but therewas a downward trend of 0.7 per cent annually.  The weighted average passive rate, on the other hand,
showed an annual increase of 3.3 per cent.  The monetary authorities implemented countercyclical
policies in order to offset the external shock felt by the economy as a result of the unfavourable
international environment.
22. With regard to foreign exchange, the basic objective of the Central Bank's policy over the past
six years has been to maintain a unified exchange rate so as to achieve macroeconomic stability and
control inflation.  The difference between the private and official markets has therefore been only
1.3 per cent on average, although in the past three years the figure has been 0.8 per cent.  The
segmentation in the foreign exchange market has no t been an obstacle to maintaining a fairly stable
exchange rate during this period because the Dominican peso depreciated at an annual average figureWT/TPR/G/105 Trade Policy Review
Page 8
of 4.6 per cent.  As the aim of the exchange policy has b een to allow the domestic competitiveness
of sectors that generate foreign currency, acco rding to the findings of recent studies, the
appreciation of the Dominican Republic's real exch ange rate is barely perceptible if one takes
into account labour productivity and not the purchasing power parity of the exchange rate.
23. The preliminary draft of the Monetary and Finance Law approved by the Monetary Board of
the Central Bank states that the basic purpose of the monetary policy  is price stability.  The text also
provides for the total liberalization of the foreig n exchange market, for which there will be full
unification and free convertibility.
24. The Dominican economy's external sector, evaluated according to the balance-of-payments,
shows that over the period reviewed the traditional deficit in the current account became more marked
as of 1998 due both to cyclical and structural factors.  Among the former, there were three shocks ofexternal origin:  the hurricane Georges in 1998, international prices for petroleum since mid-1999-
2000, and the downturn in the global economy in 2001, which mainly affected the tourism sector,
remittances from family members, and the export of goods, especially from free zones.  The structural
factor included the high rate of growth in imports of goods
1, not only due to the strong and sustained
expansion in the gross domestic product (GDP) and do mestic demand, but also to the high percentage
of imported inputs needed for domestic production.  In addition, Dominican exports, particularly of
traditional or agricultural and mining products, performed poorly, with a negative annual rate of
growth (3.4 per cent).
25. The balance in the capital and financial account was positive each year during the period and
increased at a high cumulative annual rate of 87.8 per cent, so the accumulated amount for the period
(US$5,608.0 million) largely exceeded the deficit in the current account (US$3,008.7 million).  The
decisive factor in the favourable trend in the financial account was foreign direct investment (FDI),which amounted to RD$4,706.0 million during the period and generated sufficient foreign currency to
cover amply the deficit in the current account.
26. The other important component in the capital and financial account was external debt
(disbursement less amortization on loans), which had a negative balance up to 1998 when
disbursement of loans started to exceed amortizati on and the Dominican Republic ceased to be a net
exporter of capital.
27. As a result of the trend in the two aforementioned accounts, the overall balance in the
balance-of-payments was for the most part positive over the period, reaching a figure of
US$706.0 million, which meant that in most of the years it was not necessary to utilize instruments to
finance the balance:  loss of reserves, use of IMF credit and loans, and special financing.
28. The positive trend in all the balance-of-payments flows meant that the Central Bank's
international reserves increased substantially, the gross reserves by 2.5 and the net reserves by 9.1
over the period, and in 2001 they reached the highest levels ever in the history of the Central Bank
since its creation in 1947.
29. It should also be noted that this increase meant that the international risk rating agencies such
as Moody's and Standard and Poor's raised the Dominican Republic's risk rating by three points,
making it the only country in Latin America and th e Caribbean to see an improvement in its rating in
                                                     
1 The elasticity of imports in comparison with GDP was 1.3 over the period 1996-2000, which means
that for each percentage point increase in GDP, imports increased by 1.3 percentage points, in other words by
30 per cent more.Dominican Republic WT/TPR/G/105
Page 9
2001.  These aspects, together with others such as the favourable FDI climate, contributed towards the
growth in investment and greater economic dynamism , thereby creating a sort of "virtuous circle" for
the Dominican economy in recent years.
30. Regarding the trend in the traditional current account deficit for at least three decades, with
the exception of 1990 and 1991, there was also a deficit in the period reviewed.  Nevertheless, in
comparison with the economy as a whole (in terms of GDP in dollars)2, the deficit has fluctuated in
recent years.  From 1993 to 1997, there was a marked decrease.  As of 1997, however, there was an
upward trend as a result of the two external shocks.
31. Throughout the period 1996-2001, the deficit in the current account was mainly due to the
trade balance in goods and, to a lesser extent, to the balance in income as the growing surpluses for
services and current transfers only offset 86.3 per cent of the two accounts in deficit.  In 2001, thisfigure fell to 81.6 per cent, mainly as a result of a reduced surplus in the services balance and a lower
rate of increase in current transfers.
32. The trade balance shows that its deficit, which had risen at an annual rate of 22.3 per cent
between 1996 and 2000, improved considerably in 2001, falling by 7.8 per cent in comparison with
the previous year, mainly due to a reduction of 7.3 per cent in the Dominican Republic's total imports,both at the national level as a result of the lower rate of expansion of the Dominican economy and in
imports into free zones due to the fall in demand for their manufactures by the North American
economy.
33. The total value of goods exported by the Dominican Republic rose at an annual cumulative
rate of 9.1 per cent between 1996 and 2000, but fell by 7 per cent in 2001 (US$403.8 million) in
comparison with 2000.  Of this figure, 57.6 per cent was due to the fall in exports from free zones.
The fall in global demand
3 was one of the external factors that caused this decrease in total exports in
2001.
34. During the period under review, the trend in exports from free zones showed that made-up
textile articles, which had risen at an annual rate of 9.9 per cent (1996-2000), had a negative rate of
8.3 per cent in 2001, with a fall in their share of total exports by free zones.  Electronic goods, which
had shown substantial growth since the beginnin g of the 1990s, also fell by 14.1 per cent in 2001,
although their share of total exports by free zones increased by almost 3 percentage points.  Jewellery
produced the highest annual rate of growth (30.9 per cent up to 2000).  Although this fell by almost
four percentage points in 2001, its share of total exports increased from 4.7 per cent to 12 per cent
over the period.  Pharmaceuticals, which had shown an excellent annual rate of growth of 21.9 per
cent up to 2000, also fell by 3.9 per cent in 2001, although their share increased by 2.2 percentagepoints over the period.
35. Some of these increases in export share are indicative of greater diversification in free zones
and, as a result, the latter have become less dependent on made-up textile articles.  This is a positive
development bearing in mind the keen competition mentioned above and the new situations that will
arise after 2005.
                                                     
2 In order to establish a quantitative link between the variables in the balance-of-payments and other
variables in the economy, the latter must be expressed in current United States dollars so that the figures arecomparable.
3 Global trade in goods barely increased by 0.5 per cent in 2001 compared with 12.5 per cent the
previous year.WT/TPR/G/105 Trade Policy Review
Page 10
36. In connection with imports , the Dominican economy is a significant importer and between
1996 and 2000 its total imports rose at an annual rate of 13.4 per cent.  This trend was reversed in
2001, however, shrinking to 7.3 per cent.  The overall decrease amounted to US$694.3 million, of
which 69 per cent were national imports due to the slower expansion of the Dominican economy.  The
remaining 31 per cent were imports by free zones as a result of the decrease in external demand for
their products following the recession in North America.
37. Concerning services , the Dominican Republic's service transactions abroad showed positive
and increasing balances, which rose at an annual rate of 16.2 per cent (1996-2000), but fell by 8.1 per
cent in 2001, mainly due to the fall in tourism as a result of the global economic situation.
38. Among the various components of the services balance, travel (65.8 per cent) and transport
(20.9 per cent) played a leading role in absolute terms, together with communications – morespecifically telecommunications – which grew strongly from 1994 onwards.
39. Earnings from travel increased by 8.6 per cent annually, but in 2001, for the first time in 30
years, they fell by 5.8 per cent in comparison with 2000.  This was a cyclical trend due inter alia  to
the decrease in the number of tourists from ec onomies affected by the slowdown and recession, as
well as the depreciation of the Euro in comparison with the dollar.  The number of tourists decreasedeven more after the events of 11 September.  In the case of non-resident foreigners, which had the
largest share (an average of 87.1 per cent of revenue), there was a negative rate of 7.9 per cent in
2001.
40. The majority of tourists still come from Europe, but Europe's share fell from 54.8 per cent to
48.1 per cent over the period.  The depreciation of European currency in comparison with the United
States dollar, particularly since the arrival of the Euro (24 per cent during the period 1999-2001) was
one of the reasons for this decrease.  One factor of particular importance was the 5.4 percentage pointdecrease in Europe's share during 2001, not only due to the depreciation of the Euro (5.4 per cent in
2001) but also because there was a significant downturn in growth in the European economies.
41. The Dominican Republic has shown that prudent and appropriate management of
macroeconomic policy has been a decisive factor in the growth and stability of the economy as a
whole.  The Dominican authorities are therefore  determined that these policies should be
pursued in order to maintain sustained growth that ensures the progress and well-being of the
Dominican people.
42. In another sector, one of the Dominican Republic's major achievements in relation to
intellectual property in the international sphere was the successful presentation of its intellectual
property legislation for review by the other Members of the WTO at the meeting of the TRIPSCouncil held from 18 to 22 July 2001.
43. The up-to-date legislation, the efforts made and action taken by the Dominican Republic to
ensure the enforcement of intellectual property rights in the Dominican Republic, as well as the
excellent preparations for the review made by the Dominican authorities, were widely praised by
delegations present at the review.
44. As regards legislation, it should be emphasized that the Domincan Republic has one of the
most modern intellectual property legislations in Latin America and, above all, it is in conformity with
the substantive provisions in the TRIPS Agreement.Dominican Republic WT/TPR/G/105
Page 11
45. This up-to-date legislation is the result of the efforts made by the Dominican Government
over the past five years to protect and regulate intellectual property rights as a tool for promoting
industrial and cultural development through the following:  the enactment of the General
Telecommunications Law No. 153 in 1998, which created the Dominican Telecommunications
Institute (INDOTEL)  as the regulatory body for this sector within a system of free competition;  the
Industrial Property Law No. 20-00 of 2 April 2000 and its Regulations No. 408-00 of August 2000;
the Law on Copyright and Related Rights No. 65-00 of August 2000 and its Regulations No. 362.01
of March 2001.
46. As far as enforcement is concerned, it should be noted that the Government has been untiring
in its efforts to control violations of intellectual property laws and, by means of Executive Decree No.
303-01 of March 2001, it established the National Commission for Intellectual Property Rights.  Thepurpose of the Commission is to coordinate national policy on infringement of intellectual property
rights with the various government authorities that have related activities.  The Commission works
closely with the Intellectual Property Department in the Attorney General's Office, which coordinates
action by the Public Prosecutor's Office at the national level.
47. In addition to its inspection activities and anti-piracy action, the National Copyright Office
has signed an agreement with the Dominican Te lecommunications Institute  (INDOTEL) with a view
to taking joint action to ensure observance of copyright by broadcasting organizations, such as
television and the transmission of television signals by cable.
48. As regards preparations for the review, warm appreciation was expressed regarding the
quality of the replies and the efforts made by the Dominican Republic to respond promptly to all the
questions posed by Members (United States, Canada, Switzerland, Japan, European Communities)
and to the questions by the WTO on enforcement.  These replies are contained in an official WTOdocument of 103 pages.  It should be noted that the replies given by the Dominican Republic are fully
consistent with its positions on the subjects negotiated in the TRIPS Council of the WTO.
II. CURRENT MULTILATERAL TRADE NEGOTIATIONS
49. The Dominican Republic is involved in a complex process of integration into international
markets.  It is complex from several standpoints:  the pressure to open up and integrate, the issues andthe scope of the agenda in the multilateral trade negotiations in the WTO and the FTAA, the
Economic Association Agreements with the European Union, and bilateral agreements.
50. The authority responsible for trade negotiations is the National Trade Negotiations
Commission (CNNC), established under Decree N o. 74-97 of 10 February 1997.  This Decree also
established the Civil Society Advisory Council in order to guarantee the utmost transparency byinvolving business and academic organizations, trade unions and non-governmental organizations
concerned by these issues.
51. The CNNC is composed of 12 government bodies and is chaired by the Office of the
Secretary of State for Foreign Relations, which coordinates the Dominican Republic's negotiation
activities.
52. The Dominican Republic's trade agenda encompasses two major areas:  the bilateral agenda,
which includes the completion of the free trade agreements signed with the Caribbean Community
(CARICOM) and with Central America, and the negotiation of further free trade or partial scope
agreements with Canada, Panama, Venezuela, Cuba and Haïti.WT/TPR/G/105 Trade Policy Review
Page 12
53. The multilateral agenda includes relations with the WTO, the Free Trade Area of the
Americas (FTAA) and the Association Agreement with the European Union or Cotonou Agreement.
54. At the multilateral level, the main task is the work programme defined at the WTO's Fourth
Ministerial Conference, which is both broad, in-depth and intensive for the next few years.  The
agenda comprises five major components that are being followed up in meetings in Geneva.  The
Dominican Republic has made a number of specific proposals, on agriculture and services inparticular.
55. Secondly, there is the establishment of the Free Trade Area of the Americas (FTAA), which
should conclude in 2005, and contains broader disciplines than those in the WTO.  The texts of the
Agreement are revised in nine negotiating groups that meet weekly in Panama (Market Access,
Agriculture, Services, Investment, Intellectual Pr operty, Subsidies, Anti-dumping and Countervailing
Measures, Government Procurement, Compe tition Policies, and Dispute Settlement).
56. It is planned that the schedules of offers on tariff reduction should be submitted between
15 December 2002 and 15 February 2003.  The timetable and pace of tariff reduction has yet to be
defined.
57. Measures on special and differential treatment are also being drawn up to take into account
the differences in the size and levels of development of the countries concerned and these will be
applied to each of the nine topics.
58. Lastly, but no less important, is the Economic Association Agreement between the Group of
African, Caribbean and Pacific States (ACP Group) and the European Union (EU), also known as the
Cotonou Agreement.  The Cotonou negotiations should lead to the establishment of a timetable for the
gradual elimination of obstacles to trade and improved access on the basis of rules of origin.  These
negotiations will begin in September 2002 and will take into account the levels of development of theACP countries, their capacity to adapt and to bring their economies into line with the liberalization
process, and they should be consistent with the WTO principles.
59. The Dominican Republic has participated in the preparatory stage for these negotiations as
one of the 18 countries representing the 77 ACP States.  It also chairs the ACP Group in Geneva that
is harmonizing the Cotonou negotiations with the WTO principles.
60. This overall agenda in which the Dominican Republic is involved poses a challenge in
reaching defendable positions within the framework of  a strategy that is consistent with the various
negotiating systems.  At the same time, there is interaction with and dissemination among the private
sector and civil society.
III. TRADE POLICY REGIME
61. Since 1990, the main feature of the Dominican trade policy regime has been ongoing reform
and liberalization.  The objective of the policy on trade and investment has been to promote, facilitate
and strengthen integration into the global economy.  For example, new laws have been enacted:
foreign investment, tariff reform, simplification of customs procedures for export and import,
telecommunications, tax reform, inter alia .
62. The Dominican Republic plays an active role in the multilateral trading system and has
participated in the negotiations on agriculture,  financial services, basic telecommunications andDominican Republic WT/TPR/G/105
Page 13
others.  It has also signed two free trade agreements with the Caribbean Community (CARICOM) and
the Central American Common Market.
63. The objective of the Dominican Republic's trade policy is to raise standards of living for all
its population through economic and social development.  It also aims to boost the efficiency and
competitiveness of domestic producers, lower the effective level of protection and eliminate any
aspect of the tariff structure that is unfavourable to exports, while at the same time fostering regionaleconomic cooperation.
64. The Office of the Secretary of State for Industry and Trade, with the cooperation of the
Directorate-General of Customs, is responsible for implementing the agreements.  A special office has
been set up to monitor compliance with the term s of the commitments undertaken and to resolve
problems of access experienced by domestic producers when penetrating the markets of signatorycountries and problems encountered by the latter in access to the domestic market.
65. In addition to the Dominican Export Promo tions Centre (CEDOPEX), the National Council
on Competitiveness has recently been set up in order to implement the agreements and it is
responsible for laying down the bases for a real and effective increase in productivity in the key
sectors of the Dominican economy.  It is a joint authority bringing together both the public and privatesectors concerned.
66. In 2001, the amendments to the import tariff regime agreed at the end of 2000 entered into
effect.  The tariff structure has accordingly been simplified and now only has five rates.  In 2001, the
new import valuation system also entered into effect, based on declarations by importers in
accordance with invoices, and this procedure has replaced the former procedure under which price
lists were used as a reference.
67. Under the Free Trade Agreement signed between the Dominican Republic and Central
American countries in 1998, the components relating to El Salvador, Guatemala and Honduras
entered into effect in 2001, and in March 2002, following the signing of the Memorandum of
Understanding, the agreement with Costa Rica came into effect.  Ratification with Nicaragua is still
pending, after which it will be fully integrated in the Central American Agreement.  This preferential
scheme complements that contained in the protocol of implementation signed by the DominicanRepublic and the Caribbean Community (CARICOM) in April 2000.
68. The Dominican Republic considers that the issue of free trade at the continental level through
the Free Trade Area of the Americas (FTAA), which will start in 2005 according to the mandate
agreed at the Third Summit of Heads of State and Government held in Quebec, represents an
opportunity for achieving the objectives of growth, employment, income distribution, increasedproduction with the creation of exportable goods, access to better technology and specialized inputs,
so as to achieve greater prosperity, fulfil the human potential and implement institutional
developments.
69. To this end, the Dominican Republic has participated in all the negotiating groups, helping to
draw up procedures that ensure efficiency and progress in implementing the FTAA.  In this context,special and differential treatment for small economies in the region has been established because of
the asymmetry that exists among countries in the region.
70. The Dominican Republic has formally asked to participate in the proposed free trade
agreement between the United States and Central America.  This request shows that domestic sectorsWT/TPR/G/105 Trade Policy Review
Page 14
wish to expand trade through this agreement.  The Dominican Republic is also interested in
concluding a free trade agreement with the United States on an individual basis.
CONCLUSIONS
71. This brief description of the measures taken in relation to trade and other aspects of the
Dominican Republic's economic policy over the past six years underlines the Government's firm
determination to create a more open and liberal economy that will allow it to take full advantage ofthe benefits of the multilateral trading system.  The Dominican Republic has undertaken to pursue the
reform process in order to reach sustained levels of growth and economic development.
72. The Dominican Republic recognizes that international trade is an essential component of any
development strategy and may become an effective tool for economic growth, job creation and
poverty reduction.  It also believes that the WTO is the proper forum for promoting the liberalizationof trade and economic development throughout the world.  At the same time, efforts to conclude
bilateral and regional trade agreements will contin ue to complement the trade liberalization efforts
being undertaken within the WTO.Dominican Republic WT/TPR/G/105
Page 15
ANNEX
CHART 1.1
TREND IN THE CURRENT ACCO UNT DEFICIT/GDP, 1993-2001 
(%)
5.25.5
2.6
1.5 1.61.12.12.54.0
1993 1994 1995 1996 1997 1998 1999 2000 2001
Source:  International Department, Ce ntral Bank of the Dominican Republic.
1996 1997 1998 1999 2000 ACGR* 2001** GR*** T OT AL
E xports 4,052.8 4,613.7 4,980.5 5,136.7 5,736.7 9.1 5,332.9 -7.0 29,853.3
Domestic*** 945.5 1,017.3 880.3 805.2 966.1 0.5 794.7 -17.7 5,409.1
Free Zones 3,107.3 3,596.4 4,100.2 4,331.5 4,770.6 11.3 4,538.2 -4.9 24,444.2
Imports 5,727.0 6,608.7 7,597.3 8,041.1 9,478.5 13.4 8,784.2 -7.3 46,236.8
Domestic 3,580.7 4,192.0 4,896.6 5,206.8 6,416.0 15.7 5,937.1 -7.5 30,229.2
Free Zones 2,146.3 2,416.7 2,700.7 2,834.3 3,062.5 9.3 2,847.1 -7.0 16,007.6
Balance -1,674.2 -1,995.0 -2,616.8 -2,904.4 -3,741.8 22.3 -3,451.3 -7.8 -16,383.5
Domestic -2,635.2 -3,174.7 -4,016.3 -4,401.6 -5,449.9 19.9 -5,142.4 -5.6 -24,820.1
Free Zones 961.0 1,179.7 1,399.5 1,497.2 1,708.1 15.5 1,691.1 -1.0 8,436.6
*ACGR:  Annual cum ulative growth rate, 1996-2000   **Estim ates
* * * GR:   Growth  rate,  2001 /2000                                                   I n cl u des gen eral  goods an d goods procu red i n  p ort by  carri ers
Source:  Internatio nal Department, CBDR.(f.o.b. v alue in US$ million)BALANCE OF TRADE, 1 996-2001TABLE 1.2WT/TPR/G/105 Trade Policy Review
Page 16
General 
goodsGoods 
procured 
in port by 
carriersGoods for 
processingTo t a l
1996 829.2 116.3 3,107.3 4,052.8
1997 884.5 132.8 3,596.4 4,613.7
1998 739.7 140.6 4,100.2 4,980.5
1999 627.6 177.6 4,331.5 5,136.7
2000 783.0 183.1 4,770.6 5,736.7
ACGR* -1.4 12.0 11.3 9.1
2001** 652.4 142.3 4,538.2 5,332.9
T otal 4,516.4 892.7 24,444.2 29,853.3
GR*** -16.7 -22.3 -4.9 -7.0
%  average 7.6 1.5 40.9 50.0
* ACGR:  Annual cumulative growth rate, 1 996-2000
* *Estimates                  *** GR:  Growth rate, 2001/2000
Source:  Internatio nal Department, CBDR.TABLE 1.3
TOTAL E XPORTS 1996-2001
(f.o.b. v alue in US$ million)Dominican Republic WT/TPR/G/105
Page 17
CHART 1.2
GROWTH IN EXPORT OF MADE-UP
TEXTILE PRODUCTS, 1996-2001
0.926.1
5.3
1.97.5
-8.3
1996 1997 1998 1999 2000 2001*
*Estimates
S ource:  International Department, CBDR.
56.451.6
8.56.77.810.7
7.67.9
4.712.0
5.07.210.1
4.0Made-up
clothing
Footwear
Electronics
Tobacco
Jewellery
Pharmaceuticals
Other
Source:  International Department, CBDR.CHART 1.3  
FREE-ZONE EXPORTS 
BY PRODUCT GROUP 
(Percentage share, 1996 and 2001)
1996 2001WT/TPR/G/105 Trade Policy Review
Page 18
Consumer 
goodsRaw 
materialsCapital 
goodsTotal
1996 1,722.2       1,300.2       558.3          3,580.7        
1997 2,026.4       1,469.4       696.2          4,192.0        
1998 2,178.3       1,636.3       1,082.1       4,896.7        
1999 2,368.9       1,787.4       1,050.5       5,206.8        
2000 3,187.4       2,031.1       1,197.1       6,416.0        
ACGR* 16.6             11.8            21.0            15.7             
2001** 2,859.2       1,792.6       1,285.3       5,937.1        
GR*** -10.3 -11.7 7.4 -7.5
Total 14,342.4      10,017.0     5,869.5       30,229.3      
* ACGR:  Annual cumulative growth rate, 1 996-2000
** Preliminary data           ** * GR:  Growth rate, 2001 /2000So urce:  Internatio nal Dep artment, CBDR.TABLE 1.4
S TRUCTURE OF DOMES TIC IMPORTS , 1996-2001
(f.o.b. v alue in US$ million)
1996 1997 1998 1999 2000 ACGR* 2001** GR*** T otal
T ransportation -591.2 -617.9 -719.3 -705.0 -756.7 6.4 -696.6 -7.9 -4,086.7
Tr a ve l 1,582.3 1,878.7 1,898.9 2,219.2 2,551.2 12.7 2,403.2 -5.8 12,533.5
Communications 121.2 95.4 99.5 95.1 89.0 -7.4 60.9 -31.6 561.1
Insurance -139.4 -151.4 -166.0 -77.7 -86.9 -11.1 -93.9 8.1 -715.3
F inancial serv ices -2.7 -11.6 -5.9 -8.4 -8.8 34.4 -13.1 48.9 -50.5
Other business services 36.4 35.8 39.0 49.2 44.7 5.3 13.9 -68.9 219.0
Royalties and  licence fees -28.5 -16.1 -25.3 -29.8 -29.7 1.0 -22.0 -25.9 -151.4
Government transactions 40.5 62.4 61.1 59.7 51.5 6.2 51.4 -0.2 326.6
Net total 1,018.6 1,275.3 1,182.0 1,602.2 1,854.3 16.2 1,703.8 -8.1 8,636.3
*ACGR:  Annual cumulative growth rate, 1 996-2000
**P r e limina r y d a t a                ***G R :  Gr o w t h r a t e ,  2 0 0 1/ 2000                                                                                      
Source:  I nternational Department, CBDR.(Net v alues in US$ million)TREND IN BALANCE OF SERVICES, 1996-2001TABLE 1.5Dominican Republic WT/TPR/G/105
Page 19
1996 1997 1998 1999 2000 ACGR* 2001** GR*** T otal
Freight -528.7 -554.9 -649.5 -637.5 -689.4 6.9 -622.9 -9.6 -3,682.9
S ea -490.1 -520.2 -609.0 -598.6 -647.2 7.2 -585.6 -9.5 -3,450.7
   Domestic -353.4 -397.7 -471.5 -453.8 -491.6 8.6 -454.9 -7.5 -2,622.9
   Free Zones -136.7 -122.5 -137.5 -144.8 -155.6 3.3 -130.7 -16.0 -827.8
Air -38.6 -34.7 -40.5 -38.9 -42.2 2.3 -37.3 -11.6 -232.2
Passengers -114.5 -118.1 -126.0 -127.0 -130.8 3.4 -133.5 2.1 -749.9
Other 52.0 55.1 56.2 59.5 63.5 5.1 59.8 -5.8 346.1
Net total -591.2 -617.9 -719.3 -705.0 -756.7 6.4 -696.6 -7.9 -4,086.7
* ACGR:   Ann ual  cum ul ati ve growth  rate, 1 996-2000
**P r e limina r y d a t a                ***G R :  G r o w t h r a t e , 2001 /2000                                                                                      
Source:  International Department, CBDR.(Net v alues in US$ million)TRANS PORT TRANS ACTIONS , 1996-2001TABLE 1.6
1996 1,575.4 194.5 -197.2 9.6 1,582.3
1997 1,827.4 263.2 -219.7 7.8 1,878.7
1998 1,864.1 269.8 -253.2 18.2 1,898.9
1999 2,149.0 314.3 -263.1 19.0 2,219.22000 2,511.9 326.9 -308.0 20.4 2,551.2
ACGR* 12.4 13.9 11.8 20.7 -
2001** 2,314.3 314.0 -285.6 60.5 2,403.2
GR*** -7.9 -3.9 -7.3 196.6 -
T otal 12,242.1 1,682.7 -1,526.8 135.5 12,533.5
* ACGR:   Ann ual  cum u l ati ve growth rate, 1 996-2000
* * Prel i m i n ary data               * * * GR:  Growth  rate, 2001 /2000                             
So urce:  Internatio nal Dep artment, CBDR.TABLE 1.7
Net total(V alues in U S$ million)TRAVEL TRANSACTIONS, 1996-2001
Non resident 
foreignersNon-resident 
DominicansResidentsOther 
(net)WT/TPR/G/105 Trade Policy Review
Page 20
__________Payment of 
E mployees Investment 
income Balance
1996 39.8                   -764.6 -724.8
1997 45.7                   -841.1 -795.4
1998 61.3                   -951.4 -890.1
1999 94.6                   -1,069.4 -974.8
2000 130.5                 -1,171.8 -1,041.3
ACGR* 34.6                   11.3 9.5
2001** 152.2                 -1,271.1 -1,118.9
GR*** 16.6                   8.5 7.5
T otal 524.1                 -6,069.4 -5,545.3
* ACGR:   Annual  cum ul ati ve growth rate, 1 996-2000
* * Preliminary data               ** * GR:  Growth rate, 2001 /2000
So urce:  Int ernat io nal Dep artment, CBDR.(Net balances in US$ million)TAB LE 1 . 8
BALANCE  OF INCOME , 1996-2001