U.S. completes CAFTA negotiations
The Bush administration has completed free trade negotiations with El Salvador, Guatemala, Honduras and Nicaragua to form the U.S./Central American Free Trade Area.
During talks in Washington Tuesday, however, the Costa Rican delegation withdrew over concerns about opening the country’s telecommunications and insurance markets. “Costa Rica has a monopoly in telecommunications and insurance, and there are some issues related to dealer protections,” said U.S. Trade Representative spokesman Richard Mills.
The Bush administration said the door has been left open for Costa Rica to join the regional pact in the weeks ahead.
The U.S. Chamber of Commerce applauded the Bush administration’s work on CAFTA. “This agreement should pave the way for a substantial expansion of business ties between the U.S. and Central America,” said Dan Christman, senior vice president for international affairs at the chamber.
Market access to Central America has been expanded for U.S. beef, pork, poultry, rice, feed grains and horticultural products under the agreement. The countries have also agreed to resolve their sanitary and phytosanitary differences for agricultural products.
According to the chamber, trade between the United States and Central America reached about $22 billion in 2002. The chamber said these Central American countries together are “on par” with industrialized countries such as Italy and they purchase more U.S. goods than Australia, Spain and Sweden.
“Once negotiations to incorporate the Dominican Republic are completed over the next few months, the resulting agreement will offer U.S. companies access to the largest market for U.S. goods and services in Latin America after Mexico,” the chamber said.
However, U.S. Agriculture Secretary Ann M. Veneman said in a statement that CAFTA would not amount to a free-for-all in agricultural trade between the countries.
“We want to assure our producers that provisions are in place to provide additional protection to import sensitive products, such as sugar, dairy, peanuts and meat during the transition period,” she said. “Depending on the products, these could include tariff-rate quotas, long-term tariff phase-outs, nonlinear tariff reductions, and the application of an import safeguard mechanism.”