On August 5, 2004, the United States Trade Representative (USTR) and trade ministers from Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Republic signed the Dominican Republic-Central America-United States Free Trade Agreement (the CAFTA-DR; see Appendix A , Chronology of Negotiations). The CAFTA-DR is a regional trade agreement with all parties subject to "the same set of obligations and commitments," but with each country defining its own market access schedule with the United States. It is a comprehensive and reciprocal trade agreement, replacing U.S. unilateral preferential trade treatment extended to these countries under the Caribbean Basin Economic Recovery Act (CBERA), the Caribbean Basin Trade Partnership Act (CBTPA), and the Generalized System of Preferences (GSP). On June 30, 2005, however, the Senate passed S. 1307 by a vote of 54 to 45. The House followed on July 28, 2005, passing H.R. 3045 by a vote of 217 to 215. President Bush signed the bill into law on August 2, 2005 ( P.L. 462). It entered into force on March 1, 2006 and was implemented for El Salvador, Honduras, Nicaragua, Guatemala, and the Dominican Republic within the next year. Following passage of 14 implementing bills in the Costa Rican National Assembly, the United States implemented the agreement with Costa Rica on January 1, 2009. This report discusses negotiation issues and evolution of the CAFTA-DR agreement from the time negotiations commenced on January 27, 2003 until its implementation by the last country on January 1, 2009. It will not be updated. 109-53 , 119 Stat. The first was the need for better Central American integration as part of CAFTA-DR, which historically has been hampered. Importantly, in 2003 some 80% of imports from Central America and the Dominican Republic entered the United States duty free under either normal trade relations (NTR) status or the CBI or GSP programs. These estimates are in line with expectations voiced prior to the negotiations that the marginal effects of the CAFTA-DR would be small, but positive for the U.S. economy as a whole, given the CAFTA-DR countries had small and already largely open economies. Emphasis is given to those sectors and issues expected to be most affected by the agreement, or that generated the most contentious policy debate. Each country negotiated a list of its most sensitive products for which duty-free treatment is delayed. Patents and trade secrets rules conform more closely with U.S. norms. An Enforceable Labor Chapter

U.S. labor advocates have charged that "the labor provisions of the CAFTA-DR will not protect the core rights of workers in any of the six countries participating in the agreement."
The United States Trade Representative (USTR) and trade ministers from Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Republic signed the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR) on August 5, 2004. Nearly one year later, it faced a contentious debate and close vote in both houses of the U.S. Congress. The Senate passed implementing legislation 54 to 45 on June 30, 2005, with the House following in kind 217 to 215 on July 28, 2005. President Bush signed the legislation into law on August 2, 2005 (P.L. 109-53, 119 Stat. 462). The United States implemented the agreement on a rolling basis as countries brought their laws and regulations into conformity with the obligations of the agreement. El Salvador was the first country to implement the agreement on March 1, 2006. Costa Rica was the last, implementing the agreement on January 1, 2009, after a lengthy procedural delay and national referendum.
The CAFTA-DR is a regional agreement with all parties subject to "the same set of obligations and commitments," but with each country defining its own market access schedule with the United States. It is a reciprocal trade agreement, replacing U.S. unilateral preferential trade treatment extended to these countries under the Caribbean Basin Economic Recovery Act (CBERA), the Caribbean Basin Trade Partnership Act (CBTPA), and the Generalized System of Preferences (GSP). It liberalizes trade in goods, services, government procurement, intellectual property, and investment, and addresses labor and environment issues. Most commercial and farm goods attain duty-free status immediately. Remaining trade will have tariffs phased out incrementally over five to twenty years. Duty-free treatment will be delayed longest for the most sensitive agricultural products. To address asymmetrical development and transition issues, the CAFTA-DR specifies rules for transitional safeguards, tariff rate quotas, and trade capacity building.
The CAFTA-DR is not expected to have a large effect on the U.S. economy as a whole given the relatively small size of the Central American economies and the fact that most U.S. imports from the region had already been entering duty free under normal trade relations or CBI and GSP preferential arrangements. Adjustments will be slightly more difficult for some sectors, but none are expected to be severe. Supporters see it as part of a policy foundation supportive of both improved intraregional trade, as well as, long-term social, political, and economic development in an area of strategic importance to the United States. Opponents wanted better trade adjustment and capacity building policies to address the potentially negative effects on certain import-competing sectors and their workers. They also argued that the labor, intellectual property rights, and investment provisions in the CAFTA-DR needed strengthening. This report discusses negotiation issues and evolution of the CAFTA-DR agreement from the time negotiations commenced on January 27, 2003 until its implementation by the last country on January 1, 2009. It will not be updated.