WORLD TRADE  
ORGANIZATION  WT/TPR/M/207 
17 February 2009 
 (09-0801) 
Trade Policy Review Body 
24 and 26 November 2008  
 
 
 
TRADE POLICY REVIEW 
 
DOMINICAN REPUBLIC 
 
Minutes of Meeting  
 
Chairperson:  HE Mr Yonov Frederick Agah (Nigeria) 
 
   Page 
 
I.
 INTRODUCTORY REMARKS BY THE CHAIRPERSON 3  
II. OPENING STATEMENT BY THE REPRESENTATIVE OF THE DOMINICAN 
REPUBLIC 4 
III. STATEMENT BY THE DISCUSSANT 7  
IV. STATEMENTS BY MEMBERS 10  
V. REPLIES BY THE REPRESENTATIVE OF THE DOMINICAN REPUBLIC AND 
ADDITIONAL COMMENTS 22  
VI. CONCLUDING REMARKS BY THE CHAIRPERSON 25  
 
Note:   Advance written questions by WTO Memb ers and the replies provided by the Dominican 
Republic are reproduced in document WT/TPR/M/2 07/Add. 1 and will be available online at 
http://www.wto.org/english/tr atop_e/tpr_e/tp_rep_e.htm. WT/TPR/M/207 
 Page 3 
 
 
  I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 
1. The third Trade Policy Review of the Dominican Republic was held on 24 and 
26 November 2008.  The Chairperson (HE Mr Yonov Frederick Agah) welcomed the Dominican 
Republic delegation, led by HE Mr Luis Manue l Piantini, and which included HE Ms Claudia 
Hernández Bona;  as well as the discussant Mr Yi-fu LIN, Permanent Representative of the Separate 
Customs Territory of Taiwan, Penghu, Kinmen and Ma tsu.  As usual, the discussant would speak in 
his personal capacity.  In accordance with establis hed procedures, the discussant had provided in 
advance outlines of the main issues he intended to raise (document WT/TPR/D/182). 
2. The Chairperson recalled the purpose of Trade Po licy Reviews and the main elements of the 
meeting's procedures.  The report by the Re public of Korea was contained in document 
WT/TPR/G/207 and that of the WTO Secretariat in WT/TPR/S/207.  As indicated in 
WT/TPR/6/Rev.1, the Member under review should pr ovide written answers, by the beginning of the 
review meeting, to questions submitted at least two weeks before the meeting.  Questions posed 
subsequently should be answered, to the extent possi ble, before the start of the second session of the 
meeting.  Questions left unanswered at the end of the second session should be answered in writing no 
later than one month after the meeting.  The follo wing delegations had submitted questions in writing 
at least two weeks in advance of the meeting and these had been transmitted to the Dominican 
Republic delegation:  India, Mexico, Ecuador, Un ited States, Peru, Japan, Argentina, Colombia, 
Chile, the Republic of Korea, Cana da, and the European Communities.  Copies of these questions and 
of the Dominican Republic's answers were availa ble in the meeting room.  Written questions by 
Panama, Costa Rica, Guatemala, and Brazil, submitt ed after the two-week deadline, had also been 
transmitted to the delegation of the Dominican Re public, and copies, along with the answers, were 
available in the meeting room.  All advanc e questions and responses are reproduced in 
WT/TPR/M/207/Add.1. 
3. The Chairperson had considered with keen in terest the reports prepared by the Dominican 
Republic and the Secretariat.  Both reports noted  that, following a serious economic crisis during 
2002-04, the Dominican Republic had registered so lid economic growth and an improvement in 
macroeconomic indicators;  however, the Domini can economy remained vulnerable to external 
shocks.  In this context, he believed Member s would like to know about any actions that the 
Dominican Republic envisaged in order to help  its economy weather the current world economic 
crisis. 
4. The Secretariat Report indicated that dispariti es had continued to characterize the incentives 
framework, and that inefficiencies in the electricity  sector might have become obstacles to sustained 
economic growth.  In this regard, he asked the Dominican Republic if it agreed with the assessment 
that its incentives framework should be further rati onalized, and what reforms it intended to undertake 
in the electricity sector. 
5. The Chairperson noted that the AITIC had asked to observe the Review of 
Liechtenstein/Switzerland.  There were no objections. WT/TPR/M/207 
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  II. OPENING STATEMENT BY THE REPR ESENTATIVE OF THE DOMINICAN 
REPUBLIC 
6. The representative of the Dominican Republic
 thanked the discussant for his work, Members 
for their interest and the Secretariat for the excellent report it had prepared. 
7. He noted that, in 2003, the Dominican economy ha d experienced the worst financial crisis in 
its history, at a fiscal cost equivalent to 21 pe r cent of its GDP.  This had interrupted a prolonged 
period of 11 years of continuous expansion of  productive activities, during which a high average 
annual economic growth rate  of 6.2 per cent had been achieved as  a result of macroeconomic policies 
which had kept inflation at an annual average of 7. 3 per cent.  During that period, the external debt 
had been reduced substantially in relation to GDP a nd the value of exports, the country's international 
trade had grown at a steady pace under the impetus of  an aggressive programme of open trade, and the 
open unemployment rate had fallen from 20.6 per cent to 13.9 per cent. 
8. As from the second half of 2002, weaknesses in macroeconomic policy had started to become 
apparent with the decline in the growth of GDP and losses of international reserves, which in early 
2003 had intensified as a result of the serious domestic financial crisis, together with the total loss of 
confidence produced by non-fulfilment of the financ ial arrangement with the IMF shortly after it had 
been introduced.  At the end of 2003, real GDP had shrunk by 0.3 per cent, the annual inflation rate had risen to 42.4 per cent and the rate of currency devaluation had reached 7.5 per cent.  The sharp 
contraction in real aggregate demand in the private sector had led to a significant fall in the volume of 
imports, generating a surplus on the external current  account equivalent to 6.2 per cent of GDP, the 
effect of which had been negated by  an outflow of private capital equi valent to 19 per cent of GDP, as 
a result of the growing economic uncertainty;  and mo st of the country's net international reserves had 
been lost.  As a result of the two years of crisis, the unemployment rate had risen to 19.7 per cent and 
1.2 million people had been thrown into poverty. 
9. The economy had begun to recover as of th e second half of 2004, under the stimulus of 
private capital inflows which had restored confiden ce in the new public administration.  Real GDP 
had ended the year with a 1.3 per cent increase, the a nnual inflation rate had fallen sharply, helped by 
the 40 per cent appreciation in the nominal exchange  rate resulting from the high balance of payments 
surplus, and international reserves ha d recovered the value lost the previous year.  At the end of 2004, 
public external debt in US dollars had grown by  75 per cent compared with the balance in 2000. 
10. During the period 2005-2007, the entry into force of a wide range of reforms, together with 
the application of strong macroeconomic policies, supported by a financial arrangement with the IMF, 
had succeeded in reducing the public sector defici t by 4.7 percentage points of GDP, shoring up 
private demand once again, and providing the impetus for a high average annual economic growth rate of 9.8 per cent over the period concerned, with an annual average inflation rate of 7.1 per cent.  
That growth rate had been achieved despite the steep  decline of 36 per cent in the value of Dominican 
exports of made-up textile articles caused by th e liberalization of quotas under the WTO Agreement 
on Textiles and Clothing, and despite the continuing deterioration in the terms of goods trade, as a 
result of the unabated increase in internationa l prices for primary commodities, of which the 
Dominican Republic was a net importer. 
11. Petroleum provided an example of the severe impact of that deterioration on the current 
external balance.  While foreign exchange inco me from tourism had amounted to US$2.86 billion in 
September 2002, an amount three times higher than the US$936 million of imports of crude 
petroleum and petroleum by-products in Septembe r 2008, the cumulative value of imports of those 
hydrocarbons had increased fourfold, reaching a value of US$3.604 billion, which was 10 per cent 
higher than the tourist income of US$3.374 billion.  In six years, the increased international price of  WT/TPR/M/207 
 Page 5 
 
 
  hydrocarbons alone had negated the value increase ac hieved by two decades of effort in the tourism 
sector, which was the Dominican Republic's main source of foreign exchange earnings. 
12. The Dominican economy had grown by 5.4 per cent in  the first nine months of 2008, and that 
growth rate was projected to slow down to 5 per cent at the end of the year as a result of the preventive policies that were being applied to redu ce the growth of aggregate demand, and ensure the 
maintenance of macroeconomic stability in the co ntext of the precarious international financial 
situation.  The balance of payments current acc ount was expected to close with a deficit of 
approximately 8 per cent of GDP despite the projected decline of US$800 million in the value of hydrocarbon imports over the second half of the y ear, a deficit covered mainly by a 133 per cent 
increase in external private investment income.  There was no denying that, given the high level of 
hydrocarbon imports as a proportion of total imports , the recent decline in international hydrocarbon 
prices could offset the drop in exported value that might result from the current international 
recession. 
13. During the period under review, the Dominican Republic had undertaken major reforms to 
shore up its process of institutional capacity-buildi ng, streamlining of administrative procedures, 
transparency in the handling of public resources and switching the greater part of tax receipts from 
external to internal sources.  Those fees and levies that had created an anti-export bias had also been 
eliminated, as had bureaucratic obstacles which ma de it difficult to attract and establish private 
domestic and foreign businesses and to expe dite the flow of export and import goods. 
14. The main reforms undertaken included tax reform s which had served to strengthen the fiscal 
sector and ensure the recovery of social costs;   reform of the institutional framework governing 
management and control of the fiscal sector with the entry into force of the Law on the Organization 
of the Ministry of Finance, the Organic Budget La w, the Law on Public Credit, the Law on Internal 
Oversight, the Treasury Law, the Law establishing the State Financial Administration System, the laws on tax administration autonomy, the Pub lic Planning and Investment Law and the Law 
establishing the Ministry of the Economy, Planning  and Development, as well as the Monetary and 
Financial Law liberalizing the entry of new fi nancial institutions into the domestic market, 
strengthening the regulation and supervision of the financial system, and unifying the exchange 
market;  the Law on Recapitalization of the Centra l Bank in the wake of the banking crisis, the 
reforms to the institutional framework governing fore ign investment, and improvements in the area of 
trade facilitation, including the elimination of th e consular invoice, the introduction of the Single 
Customs Declaration, and the establishment of a one day time-limit for the customs clearance of 
goods (uniformly applicable in all customs houses), fa ilure to comply with which entailed a penalty of 
non-collection of service charges, incurred by the Directorate-General of Customs. 
15. The General Law on Defence of Competition ha d also been enacted with a view to 
strengthening the legal and in stitutional framework for promoting competition;  the Law on 
Government Procurement introduced the principles of efficiency, free competition, economy, equity 
and transparency and established rules governin g public sector purchases of goods, works, services 
and State concession contracts;  the Law on Unfair Trading Practices and Safeguard Measures had been approved and had entered into force;  new la ws had been enacted in the area of intellectual 
property, which went further than the Agreement on Trade-Related Aspects of Intellectual Property 
Rights (TRIPS), with a view to improving the protection of intellectual property rights and strengthening their enforcement;  and the Law on th e Protection of Plant Breeders' Rights had been 
enacted as a prerequisite for the Dominican Republic  to accede to the International Convention for the 
Protection of New Varieties of Plants, 1991 Act. 
16. The Dominican Republic attached the highest prio rity to its trade policy, inasmuch as it was 
used as an instrument to promote the country's economic and social devel opment.  The policy was 
aimed at reducing the level of protection, taking action against any anti-export bias in the tariff WT/TPR/M/207 
Page 6  
 
  structure and fostering regional economic cooperati on.  At the same time, the Dominican Republic 
was seeking to integrate into the globalized  world by producing goods and services on an 
internationally competitive basis. 
17. Despite the adverse impact of the events described above on its external accounts, the 
Dominican Republic had reinforced its commitment to opening up its trade as a means of enhancing 
competitiveness and galvanizing its economy, by e xpanding its markets for goods and services, and 
increasingly integrating them into international markets. 
18. The previous three years had seen the entry into effect of two wide-ranging free trade 
agreements with a total of 47 countries, covering mo re than 80 per cent of foreign trade in goods and 
services:  the Central America Free Trade Agreement (DR-CAFTA) with five Central American 
countries and the United States;  and the Economic  Association Agreement (EAA) which covered 
27 European and 14 Caribbean countries. 
19. As a result, and given the Dominican Republic's readiness to extend to the rest of the world 
the generalized treatment applied to raw materi als, inputs and capital goods under the DR-CAFTA, 
the proportion of tariff lines receiving duty-free treatment (zero rate) had risen from 13.4 per cent in 
2002 to 54.5 per cent in 2007, and the effective aver age applied tariff had fallen by almost one half, 
from 9.4 per cent to 5.3 per cent.  During the period 2002-2007, imports of goods and services had 
increased by 51 per cent and exports by 45 per cent. 
20. The Dominican Republic hoped that its policy of openness, which combined permanent 
access to new markets with greater purchasing power, would enable it in the short term to address more efficiently the negative effects of the current  global financial crisis a nd its recessionary impact 
which was already affecting the main developed econo mies, and that in the medium and long term the 
policy would serve to underpin its economic and social development. 
21. The measures concerned represented a significant challenge and risk to any small and 
vulnerable economy like that of the Dominican Rep ublic.  However, his country was continuing to 
strengthen the process of trade opening and liber alization in the context of the ongoing trade 
negotiations with Canada and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu. 
22. The Dominican Republic reaffirmed its commitment to the multilateral trading system and 
reiterated that the Doha Round ne gotiations and the successful conclu sion of those negotiations were 
a priority.  It hoped that the results of the Roun d would help to reduce the trade barriers limiting 
market access for goods and services from developing countries, particularly the small and vulnerable 
economies. 
23. The Dominican Republic had been a Member of the GATT since 1949 and had become a 
founding Member of the WTO in 1995.  It had take n an active part in the Doha Development Round 
negotiations and had worked energetically with the G-33, the ACP Group, the Group of Small and 
Vulnerable Economies (for which it had coordinated ne gotiations in the area of agriculture) and the 
G-90.  It had ratified the Fifth Protocol on Financ ial Services, and in July 2006 had acceded to the 
Information Technology Agreement.  WT/TPR/M/207 
 Page 7 
 
 
  III. STATEMENT BY THE DISCUSSANT 
1. Macroeconomic environment 
24. The discussant  noted that the Dominican Repub lic had witnessed some remarkable 
fluctuations in its economy since its last trad e policy review in 2002.  In 2003, the Dominican 
Republic had suffered one of the most serious economic  and financial crises in its history.  Three of 
the country's largest banks went bankrupt, partly due  to banking fraud but maybe also because of the 
weak demand for its exports after the events of 11 September 2001.  There was also high inflation, a 
sharp currency depreciation and capital flight.  While the country's international reserves were 
running out, it had to bail out the banks, and the scale of that bailout represented as much as 20.3 per 
cent of its GDP.  In January 2005, the Dominican  Republic signed an agreement with the IMF for 
438,000,000 SDRs, the equivalent of about US$665,000,000. 
25. After the implementation of the stabilization programme signed with the IMF, there was a 
rapid economic recovery between 2005 and 2007.  The main economic indicators, such as GDP, 
inflation, the fiscal balance, and inte rnational reserves improved considerably. 
26. The figures for the first quarter of 2008 showed  a slowdown in GDP growth, investment, and 
consumption, due to the inflationary pressures resu lting from high oil prices.  The impact of the recent 
world financial crisis and the sharp decrease in  oil prices on the Dominican Republic's economy was 
as yet unknown. 
27. During the past five or six years the Dominican Republic's economy had experienced 
significant fluctuations.  At the beginning of 2008 it  had been on the slide again, but it was difficult to 
predict how it would evolve in a context of decr easing oil prices, weaker external demand, and the 
credit crunch.  Members had asked questions about  the prospects for the economy and the measures 
that the Dominican Republic would take in this regard.  He would be interested in hearing the 
responses. 
28. Given the Dominican Republic's recent experien ce in dealing with banking crises, it had the 
advantage of knowing how to cope with the current , more serious financial turmoil, and how to 
stabilize its capital accounts.  The real problem w as more likely to come from weaker demand for its 
exports, such as textiles and tourism.  He noted that a successful Doha Round and a strengthened 
world trade system would be of great help  to countries like the Dominican Republic. 
2. Trade policy regime 
29. The Dominican Republic had been making effort s in trade liberalization, participating 
actively in the WTO and in many regional trade ag reements.  Its average applied tariff rate had 
decreased from 8.6 per cent in 2002 to 7.5 per cent in 2008.  The share of duty-free lines had 
increased from around 13 per cent to almost 55 per cen t in the same period.  No anti-dumping, 
countervailing or safeguard measures had been adopte d over the previous six years;  and its services 
regime was becoming more open as a result of regulatory reforms. 
30. The Dominican Republic had also adopted measu res to facilitate trade flows, such as the 
elimination of consular invoices, the introduction of a single customs declaration form, and the 
reduction of the statutory time limit for customs clea rance.  As for TBT- and SPS-related measures, it 
was making efforts to build up capacity in order to notify both types of measures within the periods 
agreed in the WTO. 
31. He noted, however, that there was still room for improvement.  Most Members had submitted 
questions regarding customs procedur es and valuation.  Issues such as the necessity of hiring customs WT/TPR/M/207 
Page 8  
 
  brokers or agents, the timing of presenting documents to customs, and the question of 
WTO consistency in the use of reference values ha d been pinpointed as well as TBT and SPS issues.  
Improvements in standard-setting transparency and notification frequency had been encouraged. 
32. Regarding the free-trade zone (FTZ)  regime, the boundary between FTZ and 
non-FTZ companies had been blurred by two types of measure.  On the one hand, companies in FTZs 
were gradually being allowed to export their products  to the domestic market, and on the other, some 
fiscal concessions that had been granted only to  FTZ companies were also granted to exporters 
outside the FTZs.  He wondered whether this was th e Government's real intention or simply due to 
pressure by special interest groups.  If it was the Gove rnment's intention, he would be interested to 
know the reason.  Both types of measure woul d increase administrative costs because the customs 
needed to tax the products flowing in from the FTZ and refund the tax on exports from 
non-FTZ companies, while the additional benefits  accruing from such measures were not clear. 
33. Competition policy had also drawn Members' atte ntion.  The Dominican Republic had just 
established its National Competition Commission in 2008,  and he was interested in hearing of any 
progress in the competition policy regime, and in r esponses to Members' questions on this issue. 
3. Sectoral policies 
34. According to the Secretariat Report, during 2005-07, the quotas announced for importing rice 
had been below WTO-bound levels;  they represente d between 86 per cent and 93 per cent of the 
bound volume of 17,810 tonnes.  He thought Members might be interested in hearing the reason for 
this.  Members had raised other questions about agriculture, including details of the 
TRQ administration, the Dominican Republic's res ponse to comments that its agricultural policies 
discouraged the export of crops, and complaints th at import licences were tied to the requirement to 
buy certain domestic products.  These questions co vered both policy and operational aspects, and it 
might be useful to raise them in the review of  the Dominican Republic's agricultural trade regime. 
35. Energy seemed to be a big issue for the Domini can Republic, especially the electricity sector.  
The Dominican Republic had taken c oncrete steps to reduce electricity theft and to renegotiate the 
contracts signed between electricity distributors a nd generators.  However, the consumption of some 
types of energy, such as LPG and diesel, was highly subsidized, and that policy might be undermining public finances and rational energy use.  Member s had questioned whether the Dominican Republic 
planned to adopt a market-based approach for its en ergy policy, and about the possibilities for joining 
in with the exploration and exploitation activ ities through cooperation with local companies. 
36. The Secretariat Report stated that although the financial sector had recovered from the crisis 
of 2003-04, the wide spread between the banks' lendi ng and the deposit rates seemed to be an issue.  
This could partly reflect banks' high costs and reserve requirements, and the limited amount of 
competition.  Members would be very interested in hearing the Dominican Republic's strategy for 
ensuring financial stability. 
37. Members would also be interested to know when the Dominican Republic was going to open 
its insurance markets to mode 1 and mode 2 supply, and let fore ign insurance companies set up a 
branch in the country.  The Dominican Republic ha d undertaken some further liberalization in its 
DR-CAFTA agreement.  He believe d it would be beneficial to bot h the Dominican Republic and other 
WTO Members to multilateralize those commitments. 
38. Many Members had posed questions about restrictions in the professional services sector.  
While some of these questions would be easier to  answer if the conclusion of Doha Round was 
imminent, others focussed on the reciprocity requi rement in the Dominican Republic's policy and 
simply asked for more information.  WT/TPR/M/207 
 Page 9 
 
 
  39. The explosive growth of the telecommunication sect or after its liberalization was remarkable;  
the figures shown in the Report could be en couraging for Members who were still limiting 
competition in their telecommunication markets.  Some Members were interested in knowing more 
about the new "number portability" measure, which was very likely to increase competition as it 
would lower the cost for consumers switching from one telecom operator to another.  He enquired 
about the Government's plans for implementing this  measure, and any experience or lessons learned 
so far. 
40. The Dominican Republic was famous for its beautiful beaches, and the importance of the 
tourism sector to the economy w as evidenced by its 7 per cent shar e of GDP and 6 per cent share of 
employment.  He asked whether the Government  would implement or had implemented, any 
measures to ensure some stability in this sect or, given the current world financial crisis. 
41. The discussant expressed overall satisfaction in reviewing the trade policy of the Dominican 
Republic.  While Members encouraged the Dominica n Republic to further reduce the gap between its 
bound rate and applied tariff rate, and bind the libera lization of its services ma rkets at the status quo, 
they also recognized that the Dominican Repub lic was committed to a market economy, and had 
undergone a major domestic financial cr isis only four years previously. WT/TPR/M/207 
Page 10  
 
  IV. STATEMENTS BY MEMBERS 
42. Members welcomed the delegation of the Domi nican Republic led by HE Mr Luis Manuel 
Piantini.  Members noted with satisfaction the ra pid economic growth recorded by the Dominican 
Republic from 2005 and the improvement in its main  macroeconomic indicators.  Members also 
congratulated the Dominican Republic on pursuing its  strategy of trade liberalization and on its 
constructive role in the negotiations under the D oha Development Agenda;  they encouraged it to 
continue supporting the multilateral trading system.  They also took note of the Dominican Republic's 
active participation in preferential trade agreemen ts.  Members thanked the Dominican Republic for 
its advance replies and looked forward to r eceiving answers to the questions still pending. 
43. The representative of India noted the Dominica n Republic's strong and quick recovery from 
the 2002-04 financial and economic crisis.  The He ritage Foundation reported that the Dominican 
Republic's economy was 58.5 per cent free.  Its overall score was 0.9 percentage points higher than in 
2007, partially reflecting improved bus iness, labour, and monetary freedom. 
44. Tourism and free-trade zones had become majo r employers and key sources of revenue.  The 
Dominican Republic was the number one tourist des tination in the Caribbean, with nine ecological 
zones of breathtaking beauty. 
45. There were some concerns about the Dominican  Republic's economy due to the deterioration 
in the external economic environment, caused by the global financial crisis, the fall in tourist arrivals, 
slackening of demand for its products in its major market, and relatively still high food and fuel 
prices.  On the domestic front, controlling inflation would pose a challenge as even in the event of fall 
in fuel prices the manufacturers had refused to bring down prices.  Energy and electricity problems 
needed to be addressed comprehensively, as th ey were hindering the Dominican Republic from 
realizing decent industrial deve lopment and promoting trade through the enhanced market access 
promised by CAFTA DR According to Codopyme  group, industrial production had declined nearly 
30 per cent in recent months due to the world financial crisis. 
46. Official unemployment in 2008 was nearly 16 per cent, and about a quarter of the population 
lived below the poverty line.  These were worrisome indicators for any Government that was keen to 
progress rapidly, based on socially inclusive economic growth. 
47. The Government had made economic  recovery a priority, cutting spending, restructuring debt, 
and securing IMF funds.  The IMF believed that the Dominican Republic's past record in meeting 
fiscal and other macroeconomic targets would help  to maintain confidence in the short term;  
however, policy credibility would be quickly eroded if targets were not met in the outlook period.  
GDP growth in 2009 would decline to 3 per cent fro m an estimated 5.5 per cent in 2008 as external 
conditions worsen and domestic  demand growth declined. 
48. The Secretariat Report pointed out that economic  growth had been distinctly cyclical and 
disparities had continued, with th e incentives framework still favouring some groups to the detriment 
of others.  In order to achieve sustainable econom ic growth and social development, the Dominican 
Republic needed to formulate and implement policie s to address these twin issues, which continued to 
have a negative impact on the country's economic pe rformance and sustainable social development. 
49. Friendly ties between India and the Domini can Republic had been acquiring increasing 
economic and commercial content in recent years.  Bilateral trade had increased by 50 per cent since 2002. 
50.
 The representative of Mexico  noted that the Dominican economy had grown at an average 
annual rate of 5.8 per cent during the period 2002-2007.   Following the financial crisis of 2003-2004,  WT/TPR/M/207 
 Page 11 
 
 
  the economy had recovered rapidly.  As from 2005, economic growth had been driven by domestic 
demand, causing GDP to grow at a rate of 10.7 per cent in 2006.  However, and despite efforts to 
promote economic growth, levels of poverty remained high, with some 40 per cent of the population 
living in conditions of poverty.  Poverty reduction w as an unfinished task in many countries in the 
region, including the Dominican Republic, and was b ecoming more urgent in view of the difficult 
international economic situation. 
51. Public finances had improved since 2004 as a r esult of the economic stabilization programme.  
However, the deficit on the current account balance (5.6 per cent of GDP) in 2007 was a signal that 
had to be addressed.  That deficit could not be coun teracted by the surplus on the balance of services 
(tourism revenue) and the steady increase in family remittances. 
52. In particular, given that family remittances by  Dominican citizens based abroad accounted for 
nearly 8 per cent of GDP, the world economic slowdown meant that those remittances could be 
seriously affected, and the Dominican Republic should therefore take the necessary steps to 
counteract their decline and the impact  thereof on the balance of payments. 
53. With regard to trade liberalization, the Do minican Republic had placed special emphasis on 
its preferential agreements and, since 2002, had sign ed free trade agreements with Central American 
countries, the United States, the European Union and Caribbean countries.  Mexico and the Dominican Republic were studying the possibility of  negotiating a free trade agreement which would 
stimulate and diversify trade between the two countries. 
54. The report noted that the agriculture sector accounted for only 8 per cent of GDP but 
benefited from a simple average applied MFN tariff of  14.2 per cent, 7 points higher than the simple 
average applied to the manufacturing sector.  The av erage MFN tariff applied to products subject to 
tariff quotas was roughly 80 per cent out-of-quota and 20 per cent in-quota.  Given the high international food prices and the world economic crisis, it would be desirable for the Dominican Republic to eliminate those quotas in order to pr otect the most disadvantaged population groups. 
55. The manufacturing sector had a 29 per cent share of GDP.  The average tariff applied to 
non-agricultural products had been 6.3 per cent in 2008 .  That sector had a dual character, one side 
being oriented towards the domestic market and the other – the main driver of exports – towards free 
zones.  Export subsidies under the free trade regime w ould be eliminated in 2015.  In that connection, 
the Dominican Republic was encouraged to take the necessary steps to eliminate the distortive effects 
of the bias created by the preferential tax regime. 
56. The services sector was the main source of  economic activity and employment in the 
Dominican Republic.  In 2007, that sector had cont ributed 52 per cent of GDP and used 60 per cent of 
the country's labour force.  Nevertheless, and despite the importance of services, the Dominican 
Republic had scheduled specific commitments in only 37 per cent of the sectors covered by the 
GATS. 
57. As part of the work of the Doha Round, the Dominican Republic had submitted an initial 
conditional offer in services and a revised offer.  Since 2002, significant progress had been made in 
the liberalization of the telecommunication, financ ial and tourism sectors.  Mexico hoped that the 
Dominican Republic's final offer would reflect progress in the liberalization of those sectors, which would give investors greater security and confidence. 
58. Mention should also be made of the Dominican  Republic's efforts to streamline its customs 
procedures, including in particular the Single Cu stoms Declaration, the elimination of consular 
invoices and the elimination of minimum customs valuation prices for new products.  Mexico also 
commended the Dominican Government's efforts to adopt competition legislation which would WT/TPR/M/207 
Page 12  
 
  constitute a key factor in promoting the efficiency of the economy.  It also welcomed the adoption of 
various regulations to improve the protection of intellectual property rights, which in some cases went 
beyond the provisions of the TRIPS Agreement. 
59. The representative of Ecuador
 said that, since its previous trade policy review, the Dominican 
Republic's economy had turned in a solid performan ce, with annual average growth of 5.8 per cent 
during the period 2002 2007.  The c oordination of monetary and fiscal  policy and the positive results 
of the different production sectors had been some of the factors which had contributed to that sound economic performance. 
60. The Dominican Republic had also been deployin g considerable efforts to make its trade 
regime more efficient, for which purpose it ha d implemented a number of measures aimed at 
facilitating trade, such as the improvement of cust oms procedures, the elimination of import charges 
and export taxes, and the adoption of legisla tion on government procurement, competition and 
intellectual property. 
61. Imports and exports had maintained  steady growth, and in the case of the latter in particular, 
the share of primary products had fallen from 56 per cent in 2002 to 47 per cent in 2006.  In that 
connection, it should not be forgotten that the S ecretariat report referred to the decline in the 
contribution of the free zones to Dominican export growth during the period 2002-2007.  In addition 
to causing distortions in trade, the free zones carried  a high cost for the public purse in terms of the 
tax incentives they were granted. 
62. The Dominican Republic and Ecuador, as developi ng countries in the same region, shared a 
number of challenges, particularly with regard to the development of effective mechanisms to combat 
poverty.  Ecuador considered that the Doha De velopment Round offered developing countries an 
opportunity to achieve a multilateral trading system  that would help to address that challenge 
successfully, for which reason it was confident that the coordination of positions with the Dominican 
Republic in areas of common interest would be  maintained and deep ened in the future. 
63. Although the two countries' trade relations did not yet reflect the potentialities of their 
respective markets, there was a cl ear tendency towards growth.  In the period 2002-2007, Ecuadorian 
exports to the Dominican Republic had doubled while imports from that country  had grown more than 
sevenfold. 
64. The representative of the United States
 noted the Dominican Republic's continuing path 
towards trade liberalization since its last review  in 2002.  The United States and the Dominican 
Republic had enjoyed close relations for decades, a nd their bilateral trade relationship took place 
within the broader context of excellent cooperati on on a variety of matters of mutual interest, 
including ongoing security and counter-narcotics ef forts.  The Dominican Republic was the United 
States' largest trading partner in the Caribbean B asin region with US$10.3 billion in two-way trade in 
goods in 2007. 
65. The long-standing unilateral trade preferences that the United States provided through the 
Caribbean Basin Initiative trade preferences prog ram had contributed to economic growth and 
development in the Dominican Republic.  However th e basis of their trade relationship had changed 
recently from unilateral trade preferences to recipr ocal free trade through the Dominican Republic – 
Central America – United States Free Trade Agreement (DR-CAFTA). 
66. The Dominican Republic was pursuing a strategy of trade liberalization at the multilateral, 
regional, and bilateral levels.  The United Stat es commended the Dominican Republic on the direction 
of its trade liberalization strategy.  On the multila teral front, the Dominican Republic continued to be 
an active and constructive participant in the Doha  Round.  Moreover, in June 2003, the Dominican  WT/TPR/M/207 
 Page 13 
 
 
  Republic had ratified the Fifth Prot ocol annexed to the GATS regard ing financial services, and in 
July 2006, it acceded to the In formation Technology Agreement. 
67. At the regional and bilateral level, the Dominican Republic, along with other Caribbean 
nations, had recently concluded an Economic Partnership Agreement with the European Union.  The 
Dominican Republic had also finalized negotiations  with Panama on a bilateral trade agreement. 
68. The DR-CAFTA was another key liberalization step by the Dominican Republic during the 
review period.  It was signed in August 2004 and entered into force for the Dominican Republic on 
1 March 2007.  Under the agreement, the Parties removed barriers to trade and investment, which 
would strengthen regional economic integration.  The DR-CAFTA included important disciplines on:  
customs administration and trade facilitation, techni cal barriers to trade, government procurement, 
investment, cross-border trade in services, financial services, telecommunications, electronic 
commerce, intellectual property rights, transparency, and labour and environmental protection. 
69. The Dominican Republic had weathered a financia l crisis in 2003-04.  In addition, it had 
implemented a number of significant modifications to  its domestic trade regime;  many of these were 
necessitated by its commitments under the DR-CA FTA, and the benefits had rebounded to the 
multilateral trading system. 
70. The Dominican Republic had taken significant st eps to modernize its customs procedures, 
while at the same time making its customs operations  more secure.  In particular, it had eliminated 
consular invoices, introduced a single customs decl aration, provided for electronic transmission of 
declarations and commercial documen ts, and reduced the time required for customs clearance.  It had 
also participated in the certification of ports under the Container Security Initiative.  Regarding 
intellectual property rights, it had made significant changes in its patent, trade mark, and copyright 
laws, some of which exceeded its TRIPS Agreemen t obligations.  The Dominican Republic had also 
substantially revised its government  procurement law, introduced significant reforms in the banking 
sector, and enacted a competition law. 
71. The United States applauded the Dominican Republic 's positive efforts, but had concerns with 
certain aspects of its trade regime.  As the Secretariat Report had noted, the manufacturing sector 
continued to have a marked "dual character" with a domestic-market-oriented sector and an 
export-oriented sector operating under the free-z ones regime.  Recent economic reforms had not 
adequately addressed the sectoral divergences between  the free zones and the domestic economy.  
Moreover, the tariff concessions granted under the free-zones regime provided export subsidies.  
According to the Secretariat Report, "the Domini can Republic had notified the WTO that the tariff 
and tax concessions granted under the Free Zones Law included export subsidies and had undertaken 
to eliminate these by 2015 at the latest.  Under the DR-CAFTA, the Dominican Republic undertook to 
eliminate all tariff exemptions subject to performan ce requirements by 2009", i.e., 1 January 2010.  
He reminded the Dominican Republic of the need to take preparatory steps now to fulfil its 
obligations. 
72. The Secretariat Report had noted a lack of tran sparency in the Domini can Republic's adoption 
and dissemination of SPS measures, and he asked how the Dominican Republic would address these issues.  The United States was also concerned that decisions on whether to issue SPS "no-objection" certificates were not always based strictly on SPS grounds, but rather might be based on economic considerations.  He reminded the Dominican Re public of its obligation to apply SPS measures in 
accordance with its obligations  under the SPS Agreement. 
73. Persistent inefficiencies in the electricity sector continued to hamper economic development 
in the Dominican Republic.  Consumption conti nued to be highly subs idized, which burdened 
government finances and undermined the rational use of energy.  He encouraged the Dominican WT/TPR/M/207 
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  Republic to take steps to address this long-standing  difficulty, while respecting its international trade 
and investment commitments. 
74. The United States would continue to work w ith the Dominican Republic to achieve an 
ambitious result in the Doha negotiations, a resu lt that included new market access in services, 
industrial goods and agriculture , which could further enhance opportunities for the Dominican 
Republic to expand its exports and its export markets. 
75. The representative of Peru
 noted the improvement in macroeconomic indicators achieved by 
the Dominican economy after the crisis of 2002 and as a result of the opening up of trade.  She pointed out that there were still huge challenges related inter alia  to poverty reduction and the 
improvement of social and institutional indicators, as well as in specific aspects of trade such as the 
maintenance of certain subsidies,  particularly export subsidies. 
76. She hoped that the observed increase in trad e between the Dominican Republic and Peru 
would continue.  Like the Dominican Republic, Peru  believed in the complementarity of bilateral, 
regional and multilateral trade liberalization initiatives , and accordingly, in addition to expecting its 
bilateral and regional initiatives to bear tangibl e fruit, hoped that successful outcomes from the Doha 
Development Round would lead to a successf ul conclusion at the multilateral level. 
77. The representative of Japan
 noted the Dominican Republic's economic growth since its 
previous TPR, despite the crisis in 2003-04.  Th e Dominican Republic had also enjoyed substantial 
outcomes, including the stability of the current exch ange rate and the inflation rate, as a result of 
various reforms based on the standby agreement with  the IMF, such as tax reform, fiscal policy, 
monetary policy, measures to strengthen the financ ial sector, and reform of the electricity sector. 
78. Japan expected that the Dominican Republic w ould continue to make positive efforts, in 
particular to ensure sustainable development of  the macroeconomy, to improve fiscal positions in 
accordance with trade liberalization, to strengt hen its competitiveness, and to reduce poverty and 
unemployment rates. 
79. The Dominican Republic, as a founding Member of the WTO, was an active participant in the 
WTO and DDA negotiations.  The Government report mentioned that the Dominican Republic's trade 
policy was shaped by the process of economic liberali zation.  According to the Secretariat Report, the 
Dominican Republic considered that lowering tariffs  led to greater efficiency and competitiveness on 
the part of domestic producers and facilitated a high er rate of economic growth.  Japan also agreed 
with the Secretariat Report regarding the reducti on of the gap between bound and applied tariffs. 
80. With regard to import prohibitions, Japan un derstood that the tax authority had recently 
established a law to prohibit the import of right-hand-drive motor vehicles.  He asked the Dominican 
Republic to explain the aim of the regulation, in cluding the rationale for it being applied only to 
right-hand-drive motor vehicles. 
81. The free zones had made a significant contribut ion to exports and attracted considerable 
foreign investment.  In the services sector, tourism played a vital role in generating jobs and hard 
currency and attracting foreign investment.  In the financial sector, the Dominican Republic had 
ratified the Fifth Protocol to the GATS in 2003.  Nevertheless, Japan agreed with the Secretariat 
report that the Dominican Republic could make its le gal regime more secure and stable by extending 
its multilateral commitments to excluded sectors, a nd modifying its current commitments so as to 
reflect more closely its applied regime, including in the financial and maritime transport sectors. 
82. The representative of Argentina  said that he was attentively monitoring certain measures that 
mainly affected trade in agricultural goods.  WT/TPR/M/207 
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  83. The representative of Colombia  noted that, despite the difficulties encountered four years 
earlier, the Dominican Republic had applied corrective measures which had produced highly 
satisfactory results, as reflected in a 5.8 per cent av erage annual rate of real economic growth and an 
inflation rate which had been kept in single digits. 
84. Colombia noted the sound management of the fi scal deficit and the application in 2004 of 
measures whereby the deficit had been controlled a nd substantially reduced;  it also noted that the 
tariff policy applied in the context of the opening  up of trade had led to the simple average of 
MFN tariffs declining to 7.4 per cent in 2007, whil e the average effective tariff rate had fallen to 
5.3 per cent. 
85. Colombia noted the action taken by the Domini can Republic in recent years to modernize its 
customs system.  The Dominican Republic had prom oted the elimination of consular invoices, 
introduction of a single customs declaration, elect ronic transmission of the declaration and other 
documents to customs, electronic payment of taxes, reduced clearance times and certification of ports.  The Dominican Republic was also continuing to implement mechanisms to combat smuggling and 
other illicit trading activities.  Those changes were key to establishing efficient customs procedures 
and facilitating trade by means of tools that strengt hened oversight.  That could be a successful model 
for customs modernization if account was taken of th e fact that customs clearance normally took only 
one day. 
86. However, there were some matters which Colomb ia still saw as a challenge to the country's 
achievement of sustainable development, su ch as poverty indices, governance and institutional 
performance, which should be appropriately addressed by the Dominican Republic. 
87. Regarding bilateral relations between the two countries, the trade balance had traditionally 
been positive for Colombia, reaching US$614 million in 2007 and US$508 million in August 2008.  Colombia's main imports from the Dominican Repub lic were:  lorries, medical devices, cardboard 
waste, gypsum and scrap metal.  Colombia's main exports to the Dominican Republic were:  gasoline, 
preparations of petroleum oils, coal, light petroleum oils and petroleum. 
88. The representative of Chile
 observed that his country maintain ed a solid and deep relationship 
with the Dominican Republic in areas relating to  politics, culture, education, cooperation and 
international organizations.  As a result, trade re lations between the two c ountries were varied and 
growing.  Bilateral trade had increased since the earl y 1990s.  In 2007, the value of Chilean exports to 
the Dominican Republic had amounted to US$50.8 million, an increase of 87.2 per cent compared with 2003.  That same year, imports had amount ed to US$8.3 million, which was a 426.7 per cent 
increase over 2003.  Bilateral trade figures, though modest, had increased by 25.6 per cent since 2006 
and by 105.8 per cent since 2003.  The Domini can Republic was establishing an institutional 
framework for the implementation of anti dumpi ng, countervailing and safeguard measures.  He 
encouraged the Dominican Republic to apply only those measures that were necessary to redress 
injury to the domestic industry and to do so in an objective manner and in accordance with 
WTO disciplines.  The Dominican Republic was wo rking to improve the SPS-related legal framework 
and to strengthen its institutional capacity to notify SPS measures and technical regulations.  He urged 
the Dominican Republic to build cap acity for the application of such measures for the benefit of 
consumers and producers.  The Dominican Repub lic had approved the General Law on Defence of 
Competition, which would contribute to increasing the efficiency of its market.  The reduction of the 
average difference of some 28 percentage points be tween applied and bound tariffs would enhance the 
predictability of the Domini can Republic's trade regime. 
89. The representative of Korea
 noted that the Dominican Republic had responded to the 
2004 financial crisis with the fiscal and monetary  policies needed to stabilize the economy.  The 
economy had recovered rapidly:  average GDP growth  was close to 6 per cent, per capita income had WT/TPR/M/207 
Page 16  
 
  grown steadily, and FDI had reached a record US$1. 7 billion.  Despite the crisis, the Dominican 
Republic had remained open to the multilateral trad ing system.  Since 2002, exports and imports had 
increased and diversified, reflecting the Domini can Republic's progress in liberalizing its trade 
regime.  The average applied MFN tariff rate had fa llen, and import surcharges had been eliminated.  
The General Law on Competition was expected to ente r into force in 2009, paving the way for greater 
market efficiency.  Under an agreement with th e Economic Development Cooperation Fund of Korea, 
the Dominican Republic would receive loans for the computerization of customs procedures.  As a result, the customs administration would become more transparent, efficient, and predictable.  These 
efforts had been supplemented by new legislat ion streamlining customs procedures, regulating 
government procurement, and improving the protec tion and enforcement of intellectual property 
rights. 
90. Foreigners were subject to a local partnership requirement for public works contracts.  This 
might deter foreign participation in these contracts,  and its removal would ensure non-discrimination.  
As an original Member of the WTO, the Dominican  Republic was an active participant in the DDA.  
The Dominican Republic and Korea cooperated in ag riculture negotiations as members of the G-33. 
91. The representative of Canada
 noted that close to 700,000 Canadians had visited the 
Dominican Republic in 2007, generating US$557 million in revenues.  In 2007, Canada's exports to 
the Dominican Republic totalled US$184 million, and imports from the Dominican Republic were 
US$105 million.  Since its last Review, the Dominican  Republic had continued to liberalize trade, and 
had adopted several measures to simplify custom s procedures, facilitate trade, and enhance 
predictability.  Despite the period of economic  instability between 2002 and 2004, the Dominican 
Republic had made significant progress.  Canada enc ouraged the Dominican Republic to reinforce the 
openness of its economy, and its integration into th e world economy.  The Dominican Republic gave 
priority to the multilateral trading system.  As an original Member of the WTO, it had played an active role in the multilateral trading system, pa rticularly the DDA.  Canada encouraged the 
Dominican Republic to join the GPA, as envisaged dur ing its last Review.  Tariffs had been reduced 
and export taxes and import surcharges had been e liminated.  He asked how the Dominican Republic 
planned to continue reforming its agriculture sector, pa rticularly to enhance the transparency of tariff 
rate quotas, in the light of the World Bank's sugges tion that reform build on the natural advantages of 
the Dominican Republic, and seek to reduce ineffi ciencies.  Canada encouraged the Dominican 
Republic to take the necessary steps to phase-out  export subsidies under the Free Zones Law by the 
2015 deadline established by the WTO, and to in crease efforts to overcome compliance challenges 
with SPS transparency obligations. 
92. The Dominican Republic had adopted initiatives to  establish an open services and investment 
regime.  It had also signed various investment  protection and promotion agreements.  Although 
foreign investment was allowed in most sectors, le gal protection for foreign investment in mining and 
energy had to be improved.  Certain policies and practices restricted the openness of some service 
sectors;  Canada encouraged the Dominican Repub lic to use less restrictive measures.  To 
complement its participation in the multilateral trading system, the Dominican Republic was pursuing 
an active bilateral and regional trade agenda.  Domestic trade policy had benefited from the 
implementation of DR-CAFTA and the Economic Partnership Agreement with the EU and 
CARICOM.  Canada encouraged the Dominican Re public to ensure that future bilateral trade 
agreements liberalized substantially all trade a nd contained ambitious market access commitments.  
Canada looked forward to continuing negotia tions with the Dominican Republic towards the 
completion of an FTA. 
93. The representative of the European Communities
 said that the Dominican Republic was one 
of the strongest economies in Central Ameri ca and the Caribbean.  The Dominican economy had 
recovered rapidly from the 2004 crisis, and had ma intained high growth rates.  He urged the 
Dominican Republic to continue facilitating th e conditions necessary for achieving a level of  WT/TPR/M/207 
 Page 17 
 
 
  sustained economic growth that contributed to social  inclusion.  It was n ecessary for the Dominican 
Republic to continue the work of stabilizing public fi nances, in particular by reducing the level of the 
deficit and implementing measures aimed at cont rolling public expenditure and ensuring fiscal 
austerity.  The Dominican Republic was an example of how small economies could benefit from trade liberalization and the multilateral system.  The Dominican Republic had integrated into the 
international economy through its active particip ation in the WTO and the implementation and 
deepening of regional integration.  He encouraged  the Dominican Republic to continue furthering the 
process of consolidation within CARIFORU M.  The European Communities and the 
CARIFORUM members had signed an Economic Part nership Agreement on 15 October 2008.  He 
urged the Dominican Republic to continue wo rking to increase commercial opportunities in the 
region, including through renewed efforts towards regional integration. 
94. The Dominican Republic maintained customs va luation practices which were inconsistent 
with the provisions of the Agreement on Customs Valuation, such as the use of the system of 
reference values, post-entry audits and ex-post valu e control.  He requested the Dominican Republic 
to modify those practices and fully comply with the Customs Valuation Agreement.  The Dominican 
Republic was not following the guidelines laid down by the OIE, nor was it implementing the 
regionalization system.  He urged the Dominican authorities to apply strict sanitary and phytosanitary standards based on guidelines and scientific prin ciples adopted internationally, which did not 
constitute unwarranted trade restraints. 
95. The representative of Costa Rica
 noted that the Dominican Republic was his country's main 
trading partner in the Caribbean.  Following the en try into force of the FTA between Central America 
and the Dominican Republic, there had been an upwa rd trend in the volume of trade between the 
two countries.  While bilateral trade had tota lled barely US$82.7 million in 2002, it had reached 
US$324.1 million in 2007.  Costa Rica had recorded a positive bilateral trade balance equivalent to 
US$133.3 million in 2007.  The number of exported products had grown from 436 in 2002 to 566 in 
2006.  Industrial products had accounted for 92 per cent of Costa Rican exports to the Dominican 
Republic.  The Dominican Republic had become Costa Ri ca's main supplier of bars and rods of iron 
or non-alloy steel, cocoa beans and angles, shapes  and sections of iron or steel.  Costa Rica had 
become one of the Dominican Republic's main supplie rs of paper and paperboard, fertilizers, plastic 
packing cases and boxes, cleaning preparations a nd paper hygiene products.  Costa Rica hoped that 
the entry into force of the DR-CAFTA for Cost a Rica and the results of the Doha Round trade 
negotiations would consolidate that trend. 
96. The representative of Guatemala  said that the free flow of trade and positive political ties had 
encouraged the Dominican Republic and Guatemala to strengthen their trade relations by means of an 
FTA, which had grown into the DR-CAFTA.  The Dominican Republic had benefited from 
preferential arrangements under the Cotonou Ag reement and had recently signed an Economic 
Association Agreement with the European Commun ities.  As a member of the Group of Small and 
Vulnerable Economies, the Dominican Republic participated actively in multilateral trade 
negotiations.  Since its previous Trade Policy Re view, the Dominican Republic had streamlined its 
customs procedures and approved the General Law on Defence of Competition.  That was helping to 
promote the efficiency of the Dominican market a nd to dilute its level of concentration.  The 
Dominican Republic had abolished the transitional im port surcharge, in line with its commitment to 
WTO rules.  Given its special status as a small developing country, the Dominican Republic had 
encountered certain difficulties in implementing measu res relating to transparency in the adoption of 
sanitary and phytosanitary measures and customs valuation. 
97. The representative of Brazil  indicated that, as a result of the economic crisis, fiscal debt had 
risen sharply, inflation had increased to 42.7 per cent in 2003, and nominal and real interest rates had 
gone up.  This had led to a fall in economic activ ity, private consumption, and investment.  Brazil 
commended the Dominican Republic on its efforts to implement sound policies to guarantee fiscal, WT/TPR/M/207 
Page 18  
 
  monetary, and financial discipline.  Although the measures adopted had required significant 
institutional adjustment, they had borne fruit:  economic growth between 2005 and 2007 had reached 
9.5 per cent, the inflation rate had been reduced to  a single digit, per capita income had increased, and 
unemployment and poverty had fallen.  The Domini can Republic had streamlined customs procedures 
through the elimination of consular invoices, the adoption of a single customs declaration, and a 
one-day time limit for customs clearance.  Imports usually cleared customs within six hours.  The 
Dominican Republic was actively engaged in the negotiation of FTAs comprising ambitious 
commitments.  Initiatives of this kind had been launched recently with Canada, Chinese Taipei, and 
Cuba.  She welcomed the intention of the Dominican  Republic to explore the possibility of embarking 
upon negotiations with MERCOSUR. 
98. The Dominican Republic needed to deepen multilateral liberalization, particularly in 
agriculture.  Agriculture was subject to the highest  bound rates;  tariff quotas, direct payments, and 
price controls persisted in the sector.  Chicken imports had been well below the bound quota volume, 
and quota commitments for rice remained to be fu lfilled.  In the sugar sector, a 2007 Law prohibited 
bio-fuel imports when domestic production met de mand.  Some agricultural policies were having a 
disruptive effect.  Several levies and charges, which had substantially increased taxes applied 
exclusively on imports, had been abolished.  Bilatera l relations had intensified in recent years;  Brazil 
and the Dominican Republic had common interests in  the energy sector.  Brazilian companies were 
involved in the construction of the Moncion dam, which would help alleviate the crisis in the 
electricity sector.  Bilateral collaboration for ag ricultural research and the production of bio-fuels 
could be enhanced.  The Dominican Republic would greatly benefit from replacing fossil fuels with 
renewable sources of energy. 
99. The representative of Honduras
 noted that bilateral trade relations had been strengthened by 
the FTA between Central America and the Domini can Republic, which had been signed in 1998 and 
had entered into force in 2001.  The Domini can Republic and Honduras were parties to the 
DR-CAFTA.  The Dominican Republic was pursui ng trade facilitation through the elimination of 
consular invoices, introduction of a single cust oms declaration, electronic transmission of the 
declaration and other customs documents, electroni c payment of taxes, reduction of the statutory 
time-limit for customs clearance and certification of  ports.  The Dominican Republic had continued 
liberalizing its trade by reducing tariffs, elimina ting import surcharges and export taxes and adopting 
new legislation on government procurement, comp etition policy and intellectual property rights.  
Honduras' exports to the Dominican Republic included t obacco;  cigarettes;  crude oil;  bread, pastry, 
cakes, biscuits and other bakers' wares;  and domestic sewing machines.  Its imports from the 
Dominican Republic included cocoa b eans;  medicines;  groats and meal;  plates, sheets, film, foil and 
strip and other propylene polymers;  and tubes, pi pes and hoses, and fittings therefor.  The Dominican 
Republic and Honduras had signed cooperation programmes in the areas of education, labour, 
tourism, gender equality, coffee, health, aquaculture and fisheries. 
100. The representative of Nigeria  commended the Dominican Republic for its active and 
constructive role in the DDA negotiations.  The Dominican Republic was pursuing numerous FTAs 
and trade partnerships to integrate into world trade, open new foreign markets, and guarantee the 
durability of preferences.  The Dominican Republic 's stabilization process had been boosted by the 
conclusion of an IMF agreement, which focused on restoring fiscal and monetary discipline, restructuring public debt, and introducing structur al reforms.  The economy had recovered rapidly 
from the 2002-04 crisis as a result of strong growth  in private consumption and investment.  
GDP growth had peaked at 10.7 per cent in 2006.  The Dominican Republic continued to make efforts 
to liberalize its trade regime through streamlined custom procedures, tariff reduction, elimination of 
import surcharges and export taxes, and new legi slation on government pr ocurement, competition 
policy, and intellectual property rights.  It con tinued to experience difficulties relating to poverty 
reduction and governance, where performance indicato rs were still below the regional average.  In 
addition, the Dominican Republic faced daunting cha llenges in the electricity sector, which remained  WT/TPR/M/207 
 Page 19 
 
 
  in a deep crisis.  The internati onal community needed to support th e Dominican Republic in its efforts 
to confront this problem. 
101. The representative of Barbados  noted that the economy had shown remarkable resilience in 
the face of the economic and financial crisis of 2003-04, achieving an average annual real GDP growth rate of 5.8 per cent during the period un der review, notwithstanding marked fluctuations.  
This had been achieved largely through prompt and targeted actions to re-establish fiscal, monetary, 
and financial discipline, and structural reform .  The Dominican Republic had remained outward 
looking and had continued its active and focused pa rticipation in the global trading system through 
autonomous liberalization and particip ation in regional trade agreemen ts.  In addition, it had adopted 
measures to streamline customs procedures and stre ngthen the legislative framework in key areas, 
including government procurement, competition polic y, and intellectual property rights.  Its foreign 
investment regime remained an important plat form for development, and was built upon an open 
regime, with few restrictions.  The Dominican Republic's commitment towards liberalization was 
reflected in its openness and the high share in GDP  of exports and imports of goods and non-factor 
services (approximately 74 per cent during the period  under review).  A fundamental element of the 
Dominican Republic's development policy was its par ticipation in wide-ranging  bilateral and regional 
trade partnerships.  Barbados recognized and appreci ated the Dominican Republic's active role in the 
DDA, particularly as coordinator for agri culture issues within the SVE Group. 
102. Barbados and the Dominican Republic had solid bilateral relations, c onsolidated through a 
CARICOM FTA signed in 1998 and a regional CARIFO RUM Economic Partnership Agreement with 
the European Union signed in October 2008.  The Dominican Republic was vulnerable to social and 
economic challenges due to its relatively small size, openness, and susceptibility to the negative 
impacts of climate change.  Since its last Revi ew, the Dominican Republic had been affected by 
changes in the international trading environment, including high food, fuel, and commodity costs, and 
turmoil in the global financial markets.  The Domi nican Republic had relied on a careful mix of fiscal 
and monetary policies, structural reform, and stre ngthened banking regulation to manage the recovery 
and stimulate further economic development.  The support of the international community would be 
critical in promoting sustainable development and av oiding financial dislocation in small, vulnerable, 
economies. 
103. The representative of Mauritius
 noted that, as members of the ACP and SVE groups and other 
alliances, the Dominican Republic and Mauritius had c onsistently affirmed the primacy of enhanced 
special and differential treatment for small economies as an integral part of the outcome of the DDA.  
The economic difficulties faced by the Dominican Republic had led to macroeconomic instability 
during 2002-04.  While such difficulties were inhere nt to small and vulnerable economies, they also 
resulted from external factors.  However, the Do minican Republic's economy had recovered quickly.  
The fiscal situation had shifted from deficit to surplu s, and public debt ratios had declined markedly 
due to prudent policies.  Through appropriate mone tary policies, inflationary and exchange rate 
pressures had been contained.  GDP growth had been  10.7 per cent in 2006, an d 8.5 per cent in 2007.  
Finance and insurance, communications, and trade ha d been the fastest growing sectors in 2007.  The 
tourism sector had not been significantly affected by the October 2007 tropical storms. 
104. In addition to monetary and fiscal discipline,  the Dominican Republic had further opened its 
trade and investment regime through unilateral tariff reductions and the conclusion of trade 
agreements.  It had also enacted legislation to consolidate reforms and establish the foundations to 
implement multilateral, regional, and bilateral comm itments.  The Dominican Republic had also taken 
steps to facilitate trade by modernizing custom s procedures, strengthening the TBT framework, and 
adopting legislation on government  procurement, TRIPS, and competition policy.  It was ranked 
among the top ten reformers worldwide.  Significan t reform had been achieved with respect to 
business start-ups, property registration, tax payment, and trade.  The textile and clothing sector had 
been under intense pressure following the expiry of  the Multi-Fibre Arrangement.  Frequent adverse WT/TPR/M/207 
Page 20  
 
  climatic conditions had had a devastating impact  on critical sectors of the economy, entailing a 
transfer of financial resources towards reconstruction.   This had been exacerbated by the international 
food, energy, and financial crises.  Given its close economic links with the United States, the 
slowdown of the US economy could delay growth in  the Dominican Republic as a result of decreased 
export demand, and lower FDI and remittances.  Ongoing macroeconomic reform would allow the 
Dominican Republic to mitigate risks associated with  economic volatility.  However, efforts had to be 
supported fully by development partners. 
105. The representative of Haiti
 noted that sensible macroec onomic measures had enabled the 
Dominican economy to achieve 8 per cent growth since 2005, while inflation had remained below 
10 per cent.  The benefits of growth had not led to poverty reduction.  At the bilateral level, the 
Dominican Republic was Haiti's third biggest trading partner.  The value of bilateral trade between 
1997 and 2004 had been approximately US$607 million, or nearly US$76 million per year, including more than 97 per cent, on average, of exports from the Dominican Republic.  Parallel to official trade 
channels, there was an informal trade arrangement of a very specific kind which related mainly to 
agricultural and livestock products.  Between July 2004 and June 2005, informal trade in agricultural 
products had been valued at more than US$46 million.   Such trade bore some resemblance to formal 
bilateral trade, inasmuch as it was made up predom inantly of Dominican exports (more than 80 per 
cent of trade).  Haiti's trade deficit with the Dominican Republic was estimated at more than 
US$71 million per year. 
106. The Dominican Republic had a very active global trade strategy based on free trade 
agreements and trade negotiations with CARICOM,  Central America, the European Union and the 
United States.  On the other hand, it had not yet co ncluded any free trade agreements with Haiti.  The 
Dominican authorities for the most part confined th emselves to maintaining diplomatic relations.  The 
Dominican Republic attached priority to the multilatera l trade agenda.  It was participating actively in 
the Doha Development Round negotiations.  It had put forward numerous proposals, particularly in 
respect of agriculture, services (tourism, financia l services and basic telecommunications) and export 
subsidies.  It had also put forward proposals conc erning the definition of "small economies" and the 
measures that could be taken to develop special  and differential treatment on behalf of those 
economies in the different areas of nego tiation in the Doha Development Round. 
107. The representative of El Salvador
 noted that, since its previous Trade Policy Review, the 
Dominican Republic had adopted laws on gover nment procurement, competition policy and 
intellectual property rights.  The financial sector  had recovered from th e 2003-2004 crisis, largely 
because of the supervisory regime implemented by  the Dominican Republic.  Dominican exports had 
recorded moderate growth.  Free zone exports acc ounted for the bulk of total goods exports, and the 
country's trade continued to be dominated by ma nufactures.  Although the proportion of trade with 
Europe and Asia had increased, the United States rema ined the main trading partner, absorbing one 
third of the Dominican Republic's trade (excluding free zones).  In the area of intellectual property, 
the Dominican Republic had adopted laws to improv e the protection and enforcement of intellectual 
property rights.  In the context of a cooperation project, technicians from the National Intellectual 
Property Office of El Salvador's National Regi stry Centre (CNR) had supported the National 
Industrial Property Office (ONAPI) in computerizing its  specialized patent office.  That project had 
been extended to other areas, including tr ademarks and other distinctive signs. 
108. Within the framework of the DR-CAFTA Agreem ent, closer ties had developed between the 
private sectors of the Dominican Republic and El Sa lvador, which would serve to deepen bilateral 
trade relations.  In the field of multilateral trade,  El Salvador and the Dominican Republic advocated 
the consolidation and intensification of special and differential treatment for developing countries.  In 
the area of subsidies and countervailing measures,  El Salvador and the Dominican Republic had 
promoted the adoption of the General Council's deci sion for the continuation of extensions of the 
transition period pursuant to Article 27.2(b) of  the Agreement on Subsidies and Countervailing  WT/TPR/M/207 
 Page 21 
 
 
  Measures.  The decision gave some developing countries the possibility of consolidating their 
development objectives by maintaining certain incen tive programmes until 2015.  In the framework of 
the Doha Round, the Dominican Republic had su pported proposals on agriculture, non-agricultural 
market access, services and fisher ies subsidies.  Those proposals pr ovided for special flexibilities for 
small economies in order to promote fuller integration into world trade. WT/TPR/M/207 
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  V. REPLIES BY THE REPRESENTATIVE OF THE DOMINICAN REPUBLIC AND 
ADDITIONAL COMMENTS 
109. The representative of the Dominican Republic
 said that, as a precautionary measure in view 
of the crisis on the international capital market s, the Dominican Republic had been implementing 
policies for the restraint of domestic demand in or der to slow down economic growth and reduce the 
current account deficit.  The Dominican Republic had adjusted its monetary policy by increasing 
interest rates, and had approved a draft budget whic h provided for a reduction of expenditure in real 
terms.  It had stepped up its promotion of the tourism sector in search of new markets.  During the first nine months of 2008, the income generate d by that sector and remittances had increased by 
4.7 per cent and 5 per cent, respectively.  E xports had increased as a result of the Economic 
Partnership Agreement (EPA). 
110. The Dominican Republic had encountered difficulties in the electricity sector over a period of 
three decades, due to the financial weakness of  distribution companies and the high costs of 
generating companies.  As a result, the end cons umer received inadequate service at a cost per 
kilowatt that was one of the highest in the world.  The basic factors affecting financial self-sufficiency 
in the sector were the low collection rate for en ergy provided by the distribution companies and the 
failure to adjust tariffs in accord ance with established criteria.  With a view to reducing generating 
costs, private generators were replacing high-cost fuels with lower cost a lternatives such as natural 
gas.  The use of non-conventional energy was al so being promoted, since the Dominican Republic's 
geographical position enhanced its potential for the development of solar and wind energy and 
bio-fuel projects.  The index measuring the efficien cy of energy bill collection by the distribution 
companies had recorded a 4.1 per cent improvement between January and September 2008.  That 
trend would be boosted by the con tinued installation of electricity meters and the implementation of 
legislation penalizing the theft of electric power.  It was hoped in the coming months to eliminate the 
discrepancy between the theoretical tariff and the tari ff actually applied.  The subsidy to the electricity 
sector was expected to decline from 2.5 per cent of GDP in 2008 to 1 per cent of GDP in 2009. 
111. The free zone incentive model had been an impor tant instrument for the promotion of that 
sector, contributing to the steady growth of exports , employment generation a nd technology transfer.  
The Dominican Republic recognized that that mode l could not serve as a permanent mechanism for 
small economies.  However, the dismantling of  incentives would severely affect employment, 
generating problems of governance.  Consequently, the Dominican Republic had not been able to 
dismantle the tax regime applied to free zones.  The Dominican Republic nevertheless reiterated its 
commitment to comply with its obligations unde r different bilateral a nd multilateral agreements 
regarding the elimination of incentives. 
112. The Dominican Republic had fully applied the methodology of the Customs Valuation 
Agreement since July 2003.  In line with its commitments, it maintained dialogue with importers 
whenever there were differences in  the valuation of goods.  When the customs authority had doubts 
about a declaration, it applied the sequence of value determination methods laid down in the 
Valuation Agreement.  Where there were differenc es in valuation and the value of the goods was 
adjusted, the process of customs clearance continued so  as to avoid losses due to delays in the release 
of goods.  The Directorate-General of Customs coul d request trade documents at any stage in the 
process.  Where there was a possibility of delays in  the process, prior to releasing goods the customs 
authority required the importer, at no extra cost, to provide a letter of guarantee.  The customs 
authority possessed a national database containing reference values, which was used as a risk 
assessment tool.  The World Customs Organisation recommended that practice.  The database was also used to evaluate the implementation of met hods for distinguishing identical and like goods, since 
values investigated by the customs authority were in putted into it.  The use of customs brokers in the 
Dominican Republic was optional.  WT/TPR/M/207 
 Page 23 
 
 
  113. The rules governing the allocation, administration and use of tariff quotas had been duly 
notified to the WTO.  The average fill rate for tariff quotas from 2004 to 2007 had been 216.3 per cent.  Under the Dominican Republic's tradi ng schemes, no products were subject to import 
restrictions.  The Dominican Republic had embarked on strengthening the mechanisms for disseminating information and adapting its SPS legal framework, with a view to building institutional 
capacity and providing its trading partners with time ly and appropriate notifications.  The Dominican 
Republic had a database on sanitary statutes which could be consulted through the Internet site of the 
Ministry of Agriculture.  The enquiry point and national information service of the Ministry of 
Agriculture was working to facilita te the notification of measures.  In addition, the Dominican 
Republic had commissioned a consultancy to create,  design and publish an SPS portal through which 
information would be disseminated to interested se ctors, and linkages with national and international 
organizations would be facilitated.  The portal would also serve as a reference point for the retrieval 
of SPS-related legislation and documents, and notifications under bilateral and multilateral 
agreements. 
114. The Dominican Republic had made progress in the area of Technical Barriers to Trade (TBT) 
during the period under review, including the estab lishment in 2006 of the National Committee for 
Implementation of the TBT Agreement.  Th e Committee oversaw the implementation and 
administration of the TBT Agreement and recommended the most suitable measures and processes in the framework of its multilateral and regional commitments.  The Dominican Republic had also 
undertaken a number of initiatives designed to st rengthen the TBT institutional framework and 
provide timely and adequate notification to its trading partners.  As a result, since its last Trade Policy 
Review, the notifications made by the Domini can Republic had increased from zero to 55.  
Nevertheless, there were still limita tions, particularly with regard to the institutional framework and 
staff capacity.  The Dominican Republic woul d continue making efforts in that area. 
115. The financial system exhibited high levels of capitalization, provisioning, liquidity and 
profitability, combined with low delinquency rat es and exposure on investments in international 
financial markets.  The indicators thus remained  strong enough to withstand any stress conditions.  
The high margin of financial intermediation was due to the lack of depth and small size of the market.  
As new financial intermediation entities and new fi nancial products entered the market, the margin 
would go on declining, while the legal framework placed no restriction on the entry of new entities.  
In the insurance sector, the Dominican Republic was re vising its legislation in order to authorize the 
establishment of branches of foreign capital compani es irrespective of their origin.  Regarding the 
discrepancy between the commitments  assumed at multilateral level and the legal rules applied in the 
services sector, the Dominican Republic had proved th at it was an active participant in the WTO and 
in other trade forums.  The Dominican Republic was firmly committed to the success of the Doha 
Round;  the quality of its offers would ma tch the flexibility shown by other Members. 
116. The discussant
 noted that Members were concerned about the Dominican Republic's 
compliance with the SPS Agreement, phase-out of expor t subsidies by 2015, use of reference values 
in customs valuation, reduction of bound tariff rate s, expansion of services commitments, efforts to 
stabilize the electricity sector, and strategy for facing the global financial crisis.  The Dominican Republic had provided very compre hensive responses to the questions posed by Members;  the 
Mission in Geneva could serve as a useful channe l for clarification or additional information. 
117. The representative of the United States
 asked whether the Dominica n Republic had a bilateral 
commitment to end the use of export subsidies befo re 2015, and whether, in an effort to facilitate 
adjustment, it had begun discussions with interested  stakeholders regarding its commitment to end 
export subsidies by 2015. 
118. The representative of Japan  indicated that Article XX(b) of GATT was applied to its new 
regulation prohibiting imports of right-hand moto r vehicles.  He asked how the regulation was WT/TPR/M/207 
Page 24  
 
  consistent with Article XX(b) of GATT.  Some  Japanese companies had voiced concerns regarding 
the introduction of this regulation, which had been subject to a preparation period of only 30 days. 
119. The representative of the European Communities
 noted that the EC would submit follow-up 
questions on the fiscal deficit, the use of the tr ansaction value method for customs valuation, the 
implications and the implementation of the national plan for systemic competitiveness, and on the 
applicability of the SPS Agreement on products from Haiti. 
120. The representative of India  said that his country would study the Dominican Republic's 
responses and ask follow up questions if needed. 
121. The representative of Canada  noted that Canada would submit in writing a few follow-up 
questions, mostly on the establishment and notifications of standards. 
122. The representative of the Dominican Republic  indicated that the Dominican Republic would 
comply with the commitment it had undertaken bila terally to eliminate tariff incentives and that it 
would subsequently come into full compliance with  its multilateral commitments.  Regulation 0208, 
which prohibited the use and importation of right-hand dr ive vehicles, reflected the fact that the traffic 
system in the Dominican Republic was designed to accommodate left-hand drive vehicles.  
Alterations to right-hand drive vehicles were carri ed out in an unprofessional manner, and that had 
caused traffic accidents.  That was an issue affec ting human health and safety.  There were also 
driving problems, since according to the Metropolitan Transport Authority, the angle of visibility in turn manoeuvres for right-hand drive vehicles was different, and that had caused accidents.  If it was shown that the vehicles in question had been purchased  before the entry into force of the regulation, 
even though they had not been shipped, a time-li mit of 30 days was given to submit documents 
proving the transaction.  As a result, the acquire d rights of persons who had entered into such 
transactions were not affected.  WT/TPR/M/207 
 Page 25 
 
 
  VI. CONCLUDING REMARKS BY THE CHAIRPERSON 
123. This third Trade Policy Review of the Domini can Republic has been highly informative, and 
afforded this Body the opportunity to appraise in detail the evolution of the country's trade policies 
since 2002.  This was made possible largely by th e constructive engagement of Ambassadors Piantini 
and Hernández Bona, and the rest of their team.  I would also like to acknowledge the valuable 
contribution to this exercise of the discussant,  Mr Yi-fu Lin, and thank Members for their 
participation. 
124. Members welcomed the Dominican Republic's rapid economic recovery after the 
2002-04 financial crisis, made possible in large part by the implementation of sound fiscal and 
monetary policies as well as structural reforms.  However, some Members noted that the economy is 
still prone to cyclical fluctuations and urged the Do minican Republic to persist with its reform efforts 
in order to be better prepared to face external  shocks.  In this respect, the Dominican Republic 
outlined the measures it is taking as a response to th e deteriorating conditions of the world economy. 
125. Members recognized the active role of the Do minican Republic in the multilateral trading 
system, in particular the DDA negotiations, and welcom ed its ratification of the Fifth Protocol to the 
GATS and its adherence to the ITA.  Members took note of the great importance the Dominican 
Republic has attached to its participation in regional trade agreements, as part of its efforts to further 
integrate into the global economy. 
126. Members commended the Dominican Republic's commitment to trade liberalization, as 
demonstrated by its unilateral MFN tariff reducti ons since 2002.  They urged the Dominican Republic 
to reduce its bound rates to reflect applied tariffs  in order to increase the certainty of its import 
regime.  Members also acknowledged the Dominican  Republic's efforts to facilitate trade and 
modernize customs, but posed questions about certa in customs valuation practices.  Members also 
queried the transparency in the adoption of technical regulations and SPS measures.  The Dominican 
Republic noted that work is under way to set up the necessary infrastructure and mechanisms to 
ensure more timely notifications. 
127. Members commended the Dominican Republic fo r the strengthening of its legal and 
institutional framework, including in the areas of  competition policy, government procurement, and 
intellectual property rights.  Several Members urge d the Dominican Republic to continue taking steps 
to eliminate the distortions arising from fiscal in centives, and to comply with its international 
commitments in this area.  The Dominican Republic confirmed its engagement to comply with such 
commitments. 
128. Some Members considered that more liberal po licies are needed in the agriculture sector, and 
questioned the administration of tariff rate quotas.  The Dominican Republic stated that no limits are 
set on the importation of any product, including rice.   The Dominican Republic described the steps it 
is taking to address inefficiencies in the electricity sector .  It also noted that it is revising its bio-fuels 
regime to ensure consiste ncy with WTO obligations. 
129. Members noted the reforms undertaken by the Dominican Republic to modernize and 
liberalize its services sector.  They encouraged the Dominican Republic to continue along that path, 
and to expand its GATS commitments to reflect the current legal framework.  The Dominican Republic replied to numerous questions posed by Members concerning specific aspects of its services 
regime.  The Dominican Republic further noted that  amendments to its insurance regulations are 
under consideration to ensure their WTO consistency. 
130. In conclusion, Members welcomed the Do minican Republic's commitment to trade 
liberalization, and its conviction that  this should be a central pillar of  development.  The considerable WT/TPR/M/207 
Page 26  
 
  reforms undertaken since 2002 have demonstrated th e Dominican Republic's capacity to weather the 
current adverse global economic environment, and to further restructure its economy in order to 
sustain its economic and social development. 
131. I would like to close this review by thanki ng once again Ambassadors Piantini and Hernández 
and the rest of their delegation, as well as the di scussant and the Members that took part in this 
meeting.  I would also like to express my appreci ation to the delegation of the Dominican Republic 
for the many responses provided and look forward to  receiving responses to any outstanding questions 
within one month.  Finally, I thank the interpreters for their hard work. 
__________