DR-CAFTA: Regional Issues

Publication Date: July 2005

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Trade

Type:

Abstract:

On August 5, 2004, the United States signed the U.S- Dominican Republic-Central America Free Trade Agreement (DR-CAFTA) with five Central American countries (Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua) and the Dominican Republic. DR-CAFTA could have a significant effect on U.S. relations with the region, primarily by establishing a permanent reciprocal trade preference arrangement among the signatory countries. DR-CAFTA must now be ratified by each country's legislature and approved by the U.S. Congress before taking effect. Although DR-CAFTA has been ratified by three of the six legislatures (El Salvador, Honduras, and Guatemala), opposition to the agreement exists in many of the signatory countries. Opposition groups have expressed concerns about the lack of transparency during the negotiation and ratification processes. Other regional concerns focus on DR-CAFTA's likely effects on the rural poor, labor conditions, the environment, and domestic laws. The U.S. Senate approved legislation (S. 1307) to implement the pact on June 30, 2005, and the House is expected to act on similar legislation (H.R. 3045) in July 2005. For more information, see CRS Report RL32322, Central America and the Dominican Republic in the Context of the Free Trade Agreement (DR-CAFTA) with the United States, and CRS Report RL31870, The Dominican Republic-Central America-United States Free Trade Agreement (DR-CAFTA). This report will be updated periodically.