WT/REG211/M/1  
 
21 October 2016 
(16-5734) Page: 1/5 
Committee on Regional Trade Agreements  
Eighty -second Session   
 
FREE TRADE AGREEMENT  BETWEEN THE DOMINICA N REPUBLIC, CENTRAL AMERICA 
(COSTA RICA, EL SALV ADOR, GUATEMALA, HON DURAS AND NICARAGUA) ,  
AND THE UNITED STATE S  
(GOODS AND SERVICES)  
NOTE ON THE MEETING OF 27 SEPTEMBER 2016  
Chairman: Ambassador Daniel BLOCKERT (S weden)  
1.1.  The 82nd Session of the Committee on Regional Trade Agreements (hereinafter 'CRTA' or the 
'Committee') was convened in Airgram WTO/AIR/RTA/7 /Rev.1  dated 16 September  2016.   
1.2.  Under Agenda Item B.III of the session, the CRTA considered the  Free Trade A greement 
(FTA) between the Dominican Republic, Central America (Costa Rica, El Salvador, Guatemala, 
Honduras and Nicaragua), and the United States , goods and services, (hereinafter "the 
Agreement").  
1.3.  The Chairman said that the Agreement had entered into for ce for the United States and 
El Salvador on 1 March 2006; for Honduras and Nicaragua on 1 April 2006; for Guatemala on 1 
July 2006; for the Dominican Republic on 1 March 2007; and for Costa Rica on 1 January 2009. It 
had been notified to the WTO by the Uni ted States and El Salvador on 17 March 2006, by 
Honduras and Nicaragua on 7 April 2006, by Guatemala on 11 August 2006, by the Dominican 
Republic on 2 March 2007, and by Costa Rica on 19 January 2009 under Article XXIV:7(a) of the 
GATT 1994 and the Underst anding on the Interpretation of Article XXIV of GATT 1994 as an 
Agreement establishing a free trade area (documents WT/REG211/N/1 -5) and under GATS 
Article  V:7(a) as an Agreement providing for the liberalization of trade in services within the 
meaning of A rticle V of the GATS (documents S/C/N/365, S/C/N/366, S/C/N/372, S/C/N/391 and 
S/C/N/471). The text of the Agreement was available, together with its Annexes, on the Parties' 
official websites.  
1.4.  The Factual Presentation on the goods and services aspects (do cument WT/REG211/3 dated 
18 July 2016) had been prepared by the Secretariat on its own responsibility in full consultation 
with the Parties, in accordance with paragraph 7(b) of the Transparency Mechanism for Regional 
Trade Agreements (document WT/L/671). In addition, written questions and replies on this 
Agreement had been  distributed in document WT/REG211/4 dated 15 September 2016. He 
reminded Members that the  Factual P resentation had been initially prepared in 2009 and while the 
Secretariat had updated t he Trade Environment Section with recent statistics, many of the tables 
and charts were in a different format from those in more recent factual presentations. He proposed 
to organize the consideration of the Agreement by first asking the Parties and then o ther Members 
to give any general comment , following which the Committee would turn to the specifics of the 
Agreement.  
1.5.  The representative of Nicaragua , on behalf of the Central American countries , welcome d the 
opportunity to present the FTA  between the Domi nican Republic, Central  America (Costa  Rica, 
El Salvador, Guatemala, Honduras and Nicaragua) and the United States (CAFTA -DR). He thank ed 
the Secretariat for drafting the F actual Presentation and acknowledge d the work carried out jointly 
with the delegatio ns of the Dominican Republic and the United States for the review  of the 
Agreement . WT/REG211/M/ 1 
 
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  1.6.  For many years, trade relations between the Central American region and the United  States 
had been  marked by unilateral trade preferences granted by the latter to the forme r. Against this 
backdrop and with the aim of deepening existing bilateral trade and investment relations, 
negotiation of the FTA between Central America and the United States, which the Dominican 
Republic had later joined, had begun in 2003. The FTA had be en signed in August  2004, with the 
process of ratification and entry into force for all the Parties taking place between 2006 and 2009.  
1.7.  The CAFTA -DR was of  particular significance for the Central American region since it 
represent ed an attempt to advance r egional economic integration towards a much wider market, 
to encourage the expansion and diversification of trade in goods and services among the Parties, 
thus promoting new opportunities for economic development, and to achieve economic 
complementarity wh ich had helped to increase trade and had translate d into better standards of 
living for the population.  
1.8.  The Agreement was divided into 22 chapters which provide d common disciplines on: national 
treatment and market access for goods, rules of origin and ori gin procedures, customs 
administration and trade facilitation, sanitary and phytosanitary measures, technical barriers to 
trade, trade remedies, government procurement, investment, cross -border trade in services, 
financial services, telecommunications, ele ctronic commerce, intellectual property rights, and 
dispute settlement. The Annexes and Appendices form ed an integral part of the Agreement. The 
aforementioned provisions reaffirm ed each country's rights and obligations under the WTO and 
were based on the fundamental principles of national treatment, MFN treatment and  transparency.  
1.9.  One of  the main features of the CAFTA -DR was the establishment of a free trade area 
between the Parties. The Agreement covered  labour and environmental matters, recognizing the 
international commitments of the Parties in this regard, which ha d undertaken to ensure effective 
application of their own labour a nd environmental legislation. A Labour Affairs Council and an 
Environmental Affairs Council ha d been set up for this purpose. Another point worthy of mention 
was that the CAFTA -DR was the first trade agreement in the region to include a chapter on the 
environment, and that it had led to the establishment of the Secretariat for Environmental Matters 
to consider submissions filed b y individuals asserting that one of the Parties was not effectively 
enforcing its environment al laws. In addition, the CAFTA -DR Free Trade Commission ha d adopted 
decisions that strengthen ed the institutional framework of the Agreement and promote d broader 
access to the benefits deriving from free trade.  
1.10.   The CAFTA -DR had also facilitated the upgrading of legislation on intellectual property and 
trade in services, in order to provide a stable legal framework for the protection of investors and 
their investmen ts and for the protection and enforcement of intellectual property rights.  
1.11.   As regards trade between the Central American region, the Dominican Republic and the 
United States, the latter was the main trading partner of the Central American countries, receiv ing 
over half the region's exports. The United States was also one of the leading investors in several 
Central American countries. According to Trade Map data, Central American exports to the 
United  States in 2015 stood at US$14.7  million, while imports fr om the United  States totalled 
US$20.8  million. According to the same source, trade between the Dominican Republic and the 
United  States in 2015 amounted to US$4,495.5  million in exports and US$7,871.9  million 
in imports.  
1.12.   For all the reasons mentioned above , the CAFTA -DR had been useful in strengthening trade 
relations between the Parties, enhancing business competitiveness and generating greater 
investment opportunities. The Agreement ha d given the Parties further scope for export, making 
inputs available f or industry, fostering economic growth, increasing competitiveness, driving 
forward industrial and regional development and boosting job creation in the countries.  
1.13.   The representative of the Dominican Republic  thanked the Secretariat for its Factual 
Present ation and the delegations of the United States and Central America n countries  for their 
cooperation in presenting the Agreement. As explained by the Central American delegation, the 
Agreement  had been signed in 2004 and had entered into force for the Domin ican Republic in 
2007.  WT/REG211/M/ 1 
 
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  1.14.   The Agreement  had been of particular importance for the Dominican Republic, primarily in 
attracting foreign investment. In 2015, the flow of FDI from the United  States to the Dominican 
Republic had increased  to US$404.3  million, whil e between 2010 and March  2016 such investment 
totalled US$3,058.6  million, constituting 21 % of the total direct  FDI flowing into the country over 
that period.  
1.15.   In addition, the Agreement  had led to major changes in the country's legal system, which 
had helped to improve transparency, predictability and protection for both domestic and 
international economic operators. Among these, she highlight ed the Law on 
Government  Procurement and Contracting (Goods, Works and Services) and new provisions 
pertaining to in tellectual property, environmental law, labour law, trade facilitation and 
other  areas.  
1.16.   Another sphere in which the Agreement ha d led to significant changes in the 
Dominican  Republic was that of trade in services. This was  the most dynamic sector in the 
Dominican  economy, enabling it to post a trade surplus in 2008 -2014, which had grown  by an 
average of 7.7 % over that period to total US$4,245.5  million in 2014. Tourism account ed for the 
bulk of the country's services exports, followed by transport and telec ommunications services. 
In 2015 alone, the Dominican Republic had received more than 2  million tourists from the 
United  States and more than 28,000 from Central America.  
1.17.   In view of the foregoing, the Dominican Republic  agree d with its colleagues from Centr al 
America that the Agreement  had helped to strengthen trade relations between its member 
countries and ha d boosted investment opportunities.  
1.18.   The representative of the United States  thanked the Parties  for their excellent cooperation in 
preparing for th e meeting  and welcome d the consideration of the Agreement . On a personal note, 
he said that when he had started working at the Office of the U.S. Trade Representative, a long 
time ago, one of his first jobs had been to work with the partner countries to expl ore the feasibility 
of launching negotiations for the FTA and he had lots of happy memories of that process. It was 
thus a pleasure to bring things full circle with the review. The Agreement ha d strengthened the 
long-standing alliance and growing commercia l ties among the United States and Costa Rica, the 
Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua (Central America and the 
DR), and had expanded economic opportunities for citizens in all of the Parties . As a regional FTA, 
the CAFTA -DR had create d a single integrated market, eliminating tariff and non -tariff barriers and 
establishing commitments and common rules and practices among all of the CAFTA -DR countries, 
individually and collectively.  
1.19.   More broadly, the Agreement was a key compon ent of the United States ' commitment to 
deepening commercial and economic engagement in the Western Hemisphere. Twelve of the 
20 current U.S. FTA partners were in the Western Hemisphere.  
1.20.   The CAFTA -DR had entered into force progressively during 2006 to 2009  on the dates stated 
by the Chairman in his introduction. As of 2015 the CAFTA -DR countries combined were the 
United  States ' 16th largest goods trading partner with US$53 billion in total (two way) goods trade. 
The Agreement was comprehensive – reflecting the United States and Central America and the 
Dominican Republic 's commitment to fostering a favo urable environment for free trade, 
investment, openness, and transparency.  The United States believed that the Agreement wa s fully 
consistent with its WTO obli gations and buil t upon the Parties'  WTO commitments in many areas.   
1.21.   Already, the Agreement ha d generated new opportunities for farmers, ranchers, businesses, 
service providers, workers and consumers in all countries, further reaffirming the Parties'  
commit ment to open markets and trade liberalization.  As of 1 January 2015, duties on U.S. 
consumer and industrial goods had been  eliminated in all the other CAFTA -DR countries ' markets. 
More than half of U.S. agricultural exports under the CAFTA -DR enter ed the o ther CAFTA -DR 
countries ' markets duty free. The majority of remaining tariffs on nearly all U.S. agricultural 
products would  be eliminated by 2020, with a few of the most sensitive products having slightly 
longer phase -out periods. For certain products, ta riff-rate quotas permit ted some duty -free access 
for specified quantities during the tariff phase -out period, with the duty -free amount expanding 
during that period.  WT/REG211/M/ 1 
 
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  1.22.   The CAFTA -DR had maintained the preferential tariff treatment previously accorded to 
Centr al American  countries and the Dominican Republic under unilateral U.S. preference 
program mes, and provided preferential treatment for additional tariff lines.   
1.23.   With respect to services, the Agreement accord ed meaningful market access commitments, 
national treatment, and regulatory transparency that extend ed across all major services sectors 
throughout the region. To meet the high standards of the CAFTA -DR, Central America and the 
Dominican Republic  had eliminated a range of services barriers, including in t he supply of 
telecommunications, express delivery, financial, professional, legal, accounting and distribution 
services. The Agreement provide d benefits for businesses wishing to supply services cross -border 
(such as through electronic means) as well as bu sinesses wishing to establish a presence locally in 
the other country.  The Agreement also ensure d a secure and predictable legal and regulatory 
environment in both countries, a priority of foreign investors.  
1.24.   Reported U.S  FDI stock in the partner  countries  was US$7.9 billion in 2015, up 3.6% from 
2014. Reported U.S. direct investment in CAFTA -DR countries was led by the manufacturing 
sector.  
1.25.   Through the Agreement, the United States and CAFTA -DR countries  had demonstrated their 
commitment to high standards fo r the protection of intellectual property.  These standards 
recognize d the importance of strong and effective IPR protection to the economies of the United 
States and Central America and the Dominican Republic.  
1.26.   The Agreement call ed on Central America and th e Dominican Republic to implement 
improved standards for the protection and enforcement of a broad range of intellectual property 
rights, consistent with emerging international standards. Such improvements include d 
requirements for IPR protection that were critical to protecting copyrighted works like music, 
movies, and software from piracy in the digital environment; deterrent criminal penalties against 
copyright piracy and trademark counterfeiting; robust patent and test data protection that 
respect ed the Doha Declaration on the TRIPS Agreement and Public Health; and state -of-the-art 
protection for trademarks.  
1.27.   The Agreement's multiple, cross -cutting transparency obligations, both in a separate 
chapter devoted to regulatory transparency and spread throughou t other chapters of the 
Agreement, substantially improved upon previous policies and practices, and were facilitating the 
flow of trade and investment among the United States and Central America and the Dominican 
Republic.   
1.28.   He highlight ed that the Agreemen t provide d for non -discriminatory treatment of goods and 
services of each Party across a broad range of the others' government procurement market, both 
at the federal and sub-regional level s. The Agreement require d the use of fair and transparent 
procureme nt procedures, such as advance notice of purchases and timely and effective bid review 
procedures.   
1.29.   The United States believe d that the strong growth in foreign investment seen in the Central 
American and Dominican markets ha d been enhanced by the region's  commitment to open its 
markets, as well as the transparent, predictable business climate resulting from stronger 
regulatory and trade facilitation provisions, enhanced IPR protection, improved business services, 
and the pro -liberalization position signal led by the Agreement.  The reforms undertaken to 
implement the Agreement made  Central America and the Dominican Republic more attractive 
places for investors and were creating new opportunities for their people.   
1.30.   The representative of the European Union  noted that the multi -party trade Agreement 
contained no less than seven parties. The EU supported such a multi -party and region -to-region 
approach which contributed to  facilitating multilateral rule -making in the future, but also  deepened 
Central America's reg ional integration. Given the strong trade and investment flows between the 
Partie s, the Agreement was a clear manifestation of the Parties' willingness to develop a stable and 
predictable business environment. The EU had noted that the Agreement had led to  improvements 
in the general business climate in the Central American countries, stimulating a series of reforms 
and structural market changes and helping to attract FDI. The EU also appreciated the 
Agreement's focus on investment provisions and strong inv estment protection measures. The EU WT/REG211/M/ 1 
 
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  also recognized the range of activities undertaken on the labour and environment side under the 
Agreement and would follow these developments with great interest. As a final remark, she said 
that the EU had found the stu dy issued by the Dominican Republic on the first ten years of 
implementation of the Agreement a highly useful report providing much insight into the Agreement 
and its implementation. The EU had submitted a list of detailed advance questions focusing on 
mode 4, investment, ISDS, promotion of sustainable investment and responsible business conduct, 
and competition policy. The EU had no further questions.  
1.31.   The representative of Mexico  congratulated the Parties for concluding an Agreement with 
broad coverage , in addition to those areas mentioned such as investment, labour and 
environmental issues. He thanked the Parties for the responses to Mexico 's questions  on 
environment policy, intellectual property, and labour policy which were being assessed in capital. 
Mexico would revert back if there were further questions.  
1.32.   The Chairman  said that the consideration of the Goods and Services Aspects of the FTA 
between the Dominican Republic, Central America (Costa Rica, El  Salvador, Guatemala, Honduras 
and Nicaragua) and th e United States ha d allowed the Committee  to clarify a number of questions 
and it had  conclude d oral discussion of the RTA in accordance with paragraph 11 of the 
Transparency Mechanism. If any delegations wish ed to ask follow -up questions they were invited  
to forward submissions in writing to the Secretariat by 4 October 2016 and Parties were asked to 
submit replies in writing by no later than 18 October 2016. In accordance with paragraph  13 of the 
Transparency Mechanism all written submissions, as well as minutes of this meeting would  be 
circulated promptly, in all WTO  official languages, and would  be made available on the WTO 
website . 
1.33.   The Committee took note  of the comments made.  
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