Transcript DR-CAFTA
DR-CAFTA By Jessie Pina and Christopher Ruiz Agenda CAFTA Benefits Regionalization Central American Region Imports and Exports Agriculture Industry Textile Industry Telecommunication Industry Pros and Cons Conclusion CAFTA Signed on August 2, 2005 Participating countries: • • • • • • • Guatemala El Salvador Honduras Costa Rica Nicaragua Dominican Republic United States Benefits Reciprocal Trade Agreement 80% of US exports will be duty-free Access to service markets Better Business Environment Better access to markets Consumers will be benefit Labor rights Environmental protection Regionalization Both US and Central American firms are regionalizing Highway integration throughout the region Central American Countries are working together Central American Region 48 million population 10th largest market for US exports 18 million labor force Average GDP per capital $6,500 GDP per capital: US vs. Central America • $48,000 vs. $39,200 CIA Factbook GDP per capita Guatemala $5,400 El Salvador $6,400 Honduras $3,700 Nicaragua $3,000 Costa Rica $11,900 Dominican Republic $8,800 CIA Factbook Real GDP Growth Rate GDP Growth Rate 6.00 5.00 4.00 3.00 2.00 1.00 N ic ar ag ua E lS al va do G r ua te m al a H on du ra C s D o om st a in R ic ic an a R ep ub U ni lic te d S ta te s 0.00 GDP Growth Rate Imports USA- 2,190,000,000,000 Central America • Guatemala $ 15,420,000,000 • El Salvador $ 9,750,000,000 • Nicaragua $ 5,279,000,000 • Honduras $10,200,000,000 • Dominican Republic $ 16,020,000,000 • Costa Rica $ 15,370,000,000 CIA Factbook Exports USA- $ 1,377,000,000,000 Central America • Guatemala $ 8,028,000,000 • El Salvador $ 4,550,000,000 • Nicaragua $ 3,183,000,000 • Honduras $ 6,236,000,000 • Dominican Republic $ 7,170,000,000 • Costa Rica $ 9,675,000,000 CIA Factbook Agriculture Tariffs on virtually all agricultural and food products are being eliminated Change the "one-way-street" of duty-free access currently enjoyed by CAFTA countries on most of their exports into a "two-way-street" that provides U.S. Textile Competition Protects US jobs Protects US Exports Illegal Transshipments Low labor cost Close proximity to US Communication Telephone landlines (in use): • United States 163,200,000 • Guatemala 1,355,000 • El Salvador 1,080,000 • Nicaragua 247,900 • Honduras 821,200 • Dominican Republic 907,000 • Costa Rica 1,437,000 Communication Cont Mobile phones: • United States 255,000,000 • Guatemala 10,150,000 • El Salvador 6,137,000 • Nicaragua 2,123,000 • Honduras 4,185,000 • Dominican Republic 5,513,000 • Costa Rica 1,503,000 Pros 40% of imports are from the US 2nd largest Latin American economy Stable, democratic governments Close to the US Increase Hispanic population in the US Increase Investment, economic growth, and trade Ability to compete with China ex. Textile Cons Threatens Agriculture sector Globalization Promotes privatization and deregulation Environmental Concerns Inability to compete with economies of scale. Test data exclusivity US Politics http://www.youtube.com/watch?v=jMa85 z9zxhg Conclusion Important FTA Can CAFTA be beneficial? Efficiency Legal system?