WT/REG211/4  
15 September  2016 
(16-4894) Page: 1/5 
Committee on Regional Trade Agreements  Original:  English/Spanish  
 
  FREE TRADE AGREEMENT BETWEEN THE DOMINICAN REPUBLIC, CENTRAL AMERICA 
(COSTA RICA, EL SALVADOR, GUATEMALA, HONDURAS, AND NICARAGUA) AND 
THE UNITED STATES (GOODS AND SERVICES)  
QUESTIONS AND REPLIES  
 The following communication, dated 5 September  2016, is bei ng circulated at the request of 
the delegations of the Dominican Republic, Central America (Costa Rica, El Salvador, Guatemala, 
Honduras, and Nicaragua) and the United States.  
 
_______________  
 
 
 This document reproduces the questions addressed to the Part ies and the 
responses  submitted.  
 
Questions from the delegation of Australia  
 
1.1.  The factual presentation states that as of September  2011, the Parties have not 
used the sugar compensation mechanism (Article 3.16) . Can the Parties advise whether 
the sugar com pensation mechanism has been used since then?  
The sugar compensation mechanism in the CAFTA -DR Agreement has not been used.  
 
1.2.   Why did the Parties seek to include a sugar compensation mechanism in the 
agreement?  Are the Parties aware of any other agreement including such a mechanism?  
 This provision was included in the Agreement because sugar is a sensitive commodity for the 
United States.  
 
 The sugar compensation mechanism is included in bilateral free trade agreements the 
United  States has with Colombia, P anama and Peru.  
 
Questions from the delegation of the European Union  
 
General Provisions on Trade in Services  
 
1.3.  Given that Art icle V GATS requires that the agreement should not provide for the 
a priori  exclusion of any mode of supply could you please clarif y how temporary entry 
for business purposes (mode 4) works under your agreements (given there is no 
chapter on temporary movement present)?  
 The supply of services through Mode 4 is covered by Chapter 11 of the Agreement 
(Cross -Border Trade in Services) ac cording to the provisions in Articles 11.1 and 11.14 . The 
obligations of Chapter 11 —including, inter alia , obligations on Market Access and 
National  Treatment —apply with respect to Mode 4.  
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  Investment  
 
1.4.  Could the Parties clarify whether the investment prote ction provisions in the 
Agreement contain any guarantee on the right of states to regulate for legitimate public 
policy objectives?  
 The Agreement provides a high standard of investment protection, while safeguarding the 
right of governments to regulate in  the public interest . This objective is achieved through a variety 
of complementary provisions, including : substantive obligations that are carefully crafted to 
prevent overbroad or otherwise unintended interpretations that could impinge on legitimate 
regulatory objectives ; exceptions for particular regulatory measures, such as those taken for 
prudential reasons ; procedural provisions that ensure Parties can maintain close and ongoing 
oversight over interpretation of the Agreement ; and a preamble that estab lishes that the Parties, 
in making the Agreement, resolved to preserve their flexibility to safeguard the public welfare.  
 
1.5.  Could the Parties clarify whether investors have recourse to investor to state 
dispute settlement prior to establishing commercial pr esence in the host country?  
 Article 10.16 of the Treaty refers to the submission of a claim to arbitration and provides 
that a claimant may submit a claim to arbitration in which it is alleged that the respondent has 
breached an obligation under:  
 
a. Section A of the Chapter;  
b. an investment authorization ; or 
c. an investment agreement.  
 
 Additionally, the plaintiff must have suffered loss or damage by virtue or as a result of 
such violation.  
 
1.6.  Could the Parties clarify how does the Agreement promote susta inable investment 
and responsible business conduct?  
 The Agreement contains a variety of provisions that are in line with the goals of sustainable 
investment and responsible business conduct.  
 
 These include provisions in Chapter 18 that obligate Parties t o adopt or maintain legislation 
relating to anti -corruption ; provisions in Chapter 16 that obligate Parties to promote awareness of 
labour laws and not fail to effectively enforce those laws ; and provisions in Chapter 17 relating to 
the effective enforceme nts of environmental laws and to strengthening capacity through 
environmental cooperation to protect the environment and to promote sustainable development.  
 
 Furthermore, as explained, the Agreement safeguards the right of governments to regulate 
in the p ublic interest, which includes the possibility to promote sustainable investments and 
responsible business conduct . Additionally, Article 10.11 allows a Party to adopt, maintain, or 
enforce any measure otherwise consistent with Chapter 10 that it considers  appropriate to ensure 
that investment activity in its territory is undertaken in a manner sensitive to environmental 
concerns . In addition, the preamble to the agreement notes that the Parties resolve to implement 
the Agreement in a manner consistent with  environmental protection and conservation, promote 
sustainable development, and strengthen their cooperation on environmental matters.  
 
Intellectual Property Rights  
 
1.7.  Paragraph 5.15 : Could the Parties explain h ow is the genericity of terms in 
protected geo graphic indications addressed under the FTA?  
Article 15.3 provides general principles for GI's protection, including requirements for 
transparency and due process . The Parties shall register GI's according to their 
domestic  legislation.  
 
 In the case of th e United States, geographical indicatio ns may be protected under the 
US trademark system ; "generic terms " are not eligible for trademark or geographical 
indications  protections.  WT/REG211/4  
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   In the case of the Central American Parties, the geographical indications may  be protected 
through a specific procedure as an individual category of IPR . In addition, the generic terms are 
not eligible for geographical indications protection.  
 
 The Agreement does not cover generic terms for protective purposes.  
 
Labour  
 
1.8.  Paragraph 5 .22: According to the Factual Presentation, the Agreement contains a 
cooperative mechanism to advance commitments regarding labour matters, including 
the principles embodied in the ILO Declaration on Fundamental Principles and Rights at 
Work and ILO Conven tion 182 on the Worst Forms of Child Labour . In Annex 16.5, 
Labour Cooperation and Capacity Building Mechanism . Furthermore, the Parties agree to 
coordinate their activities and cooperate to establish priorities, develop specific 
cooperative and capacity b uilding activities, exchange information on labour laws and 
practices and seek support, as appropriate, from international organizations regarding 
labour matters.  
a. Could the Parties submit information on how they are cooperating in the areas 
of labour ? Have the Parties set up any dedicated Committees?  
b. Could the Parties clarify what types of concrete cooperation activities are 
planned?  
c. Could the Parties also provide examples of such cooperation?  
d. Could the Parties clarify whether there h as there been any cases  of 
non-compliance of commitments on labour standards ? In this case, what 
actions have been carried out?  
 With regard to question "a", the Parties established a Labor Affairs Council consisting of 
cabinet level officials or their high -level designees from the U.S., Dominican Republic and 
Central  American governments, typically from labo ur, trade and foreign affairs agencies or 
ministries, to oversee the implementation of the labo ur chapter and the cooperation mechanism, 
(Article 16.4, para graph s 1 and 2) . The Council met in November  2008 in El Salvador, and 
discussed the implementation of the labo ur chapter and efforts to improve respect for labo ur 
rights, including technical cooperation activities . The Council meeting included discussions of 
labour enforcem ent initiatives in the Parties' respective countries, as well as a public session with 
over one  hundred  members of the public from the CAFTA -DR region.  
 
In April 2005, the Central American Countries and the Dominican Republic presented the 
document : "Building on Progress : Strengthening Compliance and Enhancing Capacity" . A Report of 
the Working Group of the Vice Ministers Responsible for Trade and Labor in the Countries of 
Central America and the Dominican Republic, this document has helped guide labo ur cooperation 
in the region at the national and regional levels.  
 
 With regard to questions "b" and "c", the Parties have undertaken a wide range of 
cooperative activities to promote labo ur rights since the Agreement entered into force . The 
cooperation efforts are implemented through the Labor Cooperation Mechanism included in 
Article  16.5 and Annex 16.5 of the Agreement . For more information see : https://ustr.gov/about -
us/policy -offices/press -office/fact -sheets/2011/may/cafta -dr-labor-capacity -building . 
 
 With regard to question "d", the Agreement provides for the submission and review of 
communications from the public concerning matters r elated to the labo ur chapter (Article 16.4, 
paragraph  3). For the United States, such communications, concerning a Party's commitments or 
obligations arising under the labo ur chapter, can be submitted to the US Department of Labor 
(DOL), which reviews and considers them in conjunction with the Office of the US Trade 
Representative and the US Department of State . In the case of the Central American Parties, each 
Party has designated a point of contact, who shall accept submissions, receive and consider 
commu nications from persons of a Party on matters related to the provisions of Labor Chapter . 
This task is done in coordination with the Ministries of Economy or Foreign Trade . The United 
States has issued detailed reports as part of its review of public commun ications submitted WT/REG211/4  
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  pursuant to the Agreement regarding the Dominican Republic, Guatemala, and Honduras . In all 
three cases, the United States has undertaken cooperative activities with the governments in 
question to develop initiatives to address the issue s raised in the communication . For more 
information see : https://www.dol.gov/agencies/ilab/our -work/trade/fta -submissions . In the case 
of Guatemala, the United States pursued dispute settlement under the Agreement and the decision 
of the arbitral panel is pending.  
 
Environment  
 
1.9.  Paragraph 5.23 : Could the Parties explain h ow does the Environmental Affairs 
Council enforce compliance of international standards?  
 Article 17.2 requir es that each party not fail to enforce its domestic environmental laws, 
which would include Multilateral Environmental Agreements that are a part of its domestic laws . 
Parties are also required to ensure that its laws and policies provide for and encourage  high levels 
of environmental protection and to strive to continue to improve those laws and policies . The 
Environmental Affairs Council meets annually to oversee implementation of and review progress 
under the Environment chapter . The Environmental Affair s Council itself does not enforce 
compliance of international standards . The EAC provides a forum for engagement on the 
Parties'  efforts to enforce domestic environmental laws and ensure that their laws are providing for 
high levels of environmental protec tion. It also helps to coordinate cooperative activities that assist 
Parties in implementing their chapter obligations.  
 
Questions from the delegation of Mexico  
 
Environment  
 
1.10.   Paragraph 5.24 : Regarding the procedures in chapter 17 for any person of a Party 
to file a submission asserting that a Party is failing to effectively enforce its 
environmental laws, what action is taken if a person from a Party does not comply with 
what has been established?  
 Articles 17.7 and 17.8 of Chapter 17 establish a mechanism that allows any person from a 
Party to file a submission asserting that a Party is failing to effectively enforce its environmental 
law. This procedure is conducted by the Secretariat for Environmental Matters in accordance with 
the requirements set out in  those articles.  
 
 If the Secretariat determines that the revised submission does not meet the criteria 
established in Article 17.7, the Secretariat will terminate its review of the submission and notify 
the reasons for terminating its review.  
 
 Further in formation about the Secretariat and the submission process is available on the 
official website:  http://www.saa -sem.org/en   
 
What subjects are covered in that chapter?  
 
 The Explanatory Document of DR -CAFTA prepar ed by the Ministry of Foreign Trade of 
Costa  Rica provides a summary in Spanish of the contents of the agreement, including Chapter 17.  
This information is available online on the next link:  
 
http://www.comex.go.cr/tratados/vigentes/cafta/documento_explicativo_cafta.pdf . 
 
Intellectual Property  
 
1.11.   Paragraph 5.14 : Are there provisions in chapter 15 that go beyond the TRIPS or 
WIPO provisions (longer time periods, great er protection)?  
Are there any provisions on the protection of geographical indications and/or 
appellations of origin?  
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   There are various differences among the provisions of Chapter 15 of the CAFTA -DR, the 
TRIPS Agreement, and obligations under WIPO treati es. A comprehensive comparison is beyond 
the scope of this exercise.  
 
 Yes. Article 15.3 of the CAFTA -DR addresses geographical indications.  
 
1.12.   Paragraph 5.16 : What are the technological protection measures and the liability 
for Internet service providers in  connection with copyright infringements that take place 
over their networks?  
 Article 15.5, paragraph 7, literal (g) provides a definition for technological 
protection  measures.  
 
 Article 15.11.27 provides for, among other things, limitations on liability  for service 
providers that observe specified conditions, as set out in the text.  
 
 The technological protection measures are established in Article 15.5.7, regarding the 
phonograms, authors, performers, and producers used in connection with the exercise o f their 
rights and that restrict unauthorized acts in respect to their works.  
 
Labour  
 
1.13.   Paragraph 5.22 : With reference to Article 16.5 of the Agreement, mentioned in 
this paragraph, has the cooperative mechanism to advance commitments regarding 
labour marke ts been implemented ? If so, what activities have been carried out?  
 With regard to question "1.4", the Parties established a Labor Affairs Council consisting of 
cabinet level officials or their high -level designees from the U.S., Dominican Republic and 
Central American governments, typically from labo ur, trade and foreign affairs agencies or 
ministries, to oversee the implementation of the labo ur chapter and the cooperation mechanism, 
(Article 16.4, paras 1 and 2) . The Council met in November  2008 in El Sal vador, and discussed the 
implementation of the labo ur chapter and efforts to improve respect for labo ur rights, including 
technical cooperation activities . The Council meeting included discussions of labo ur enforcement 
initiatives in the Parties' respectiv e countries, as well as a public session with over 
one hundred  members of the public from the CAFTA -DR region . The Parties have undertaken a 
wide range of cooperative activities to promote labo ur rights since the Agreement entered into 
force. To support th is cooperation, the U.S. government committed over $142  million  in funds 
from 2005 - 2010 for labo ur capacity building in the CAFTA -DR countries . Funds have been 
dedicated to labo ur capacity building programs focused on strengthening labo ur ministries and 
courts, promoting an overall culture of compliance, and removing children from or preventing 
exploitive child labo ur. For more information see: https://ustr.gov/about -us/policy -offices/press -
office/fact -sheets/2011/may/cafta -dr-labor-capacity -building . 
 
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