El Salvador To Become First Country To Implement CAFTA

by Mike Godfrey, Tax-News.com, Washington

28 February 2006

United States Trade Representative Rob Portman announced last week that he has recommended President George W. Bush issue a proclamation to implement the CAFTA-DR agreement for El Salvador - the first signatory country to the free trade deal to receive such a recommendation from USTR.

"We have worked closely with El Salvador over the past several months to ensure its legislative and regulatory regime reflects the obligations and responsibilities set forth in the CAFTA-DR agreement," Portman said in a statement issued on Friday.

The United States, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua signed the CAFTA-DR in August 2004.

El Salvador was the first to ratify in December 2004. Nicaragua was the most recent, in September 2005.

All but Costa Rica have ratified the Agreement, yet despite this, the United States government implemented CAFTA on January 1.

CAFTA eliminates duties on more than half the value of US farm exports to the region, expands IP protections and opens telecommunications and other markets.

Outgoing Costa Rican President Abel Pacheco submitted the CAFTA to the Legislative Assembly in late October, in the face of threatened strikes, but the legislative process could take several months.

Oscar Arias, who is likely to become Costa Rica's next president following reports last week that he has won a slender 18,000 vote majority over his main rival Otton Solis, is also a supporter of the trade pact, so it is likely a question of when rather than if Costa Rica finally ratifies CAFTA.

However, Arias must wait until several challenges to the election results are resolved before he is officially declared as having won the election which took place earlier in the month.

Portman stated that the US government will continue to work with its CAFTA-DR partners to ensure "timely and full implementation of the agreement."

"We hope and expect that we will be able to bring additional CAFTA-DR partners into the agreement soon," he said.

A vote on the pact may take place in Costa Rica's Asamblea Legislativa in the coming weeks, but, according to a report by A.M. Costa Rica, this could happen before a new Assembly, which is likely to be more pro-CAFTA, is sworn in on May 1.

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