Guatemala Implements CAFTA While Costa Rica Hangs Back

by Mike Godfrey, Tax-News.com, Washington

07 July 2006

US President George W Bush issued a proclamation to implement the US-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR) for Guatemala on July 1.

Guatemala joined El Salvador, Honduras and Nicaragua which have already implemented the agreement. The Dominican Republic delayed its planned July 1 implementation of the Treaty while it continues to negotiate some aspects of the agreement. The final member country, Costa Rica, has yet to ratify the agreement.

US Trade Representative Susan C Schwab said: "I am pleased the President has issued a proclamation to implement the CAFTA-DR agreement for Guatemala as of July 1, 2006. We have worked closely and intensively with all six CAFTA-DR countries to ensure they meet the obligations and responsibilities under the agreement. Our constructive engagement has had positive results and we’re pleased that Guatemala is now ready to join El Salvador, Honduras and Nicaragua in full implementation of this agreement. I greatly appreciate the sincere and diligent effort by Guatemala to adopt the necessary regulatory and legislative framework under CAFTA-DR.

"We will continue our work with the remaining two CAFTA-DR partners to ensure timely and full implementation of the agreement."

The United States, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua signed the CAFTA-DR in August 2004. All but Costa Rica have ratified the Agreement. Implementing legislation for the CAFTA-DR passed the US Senate in June 2005 and the House of Representatives in July 2005 and was signed by the President in August 2005.

After being elected in March, Costa Rica president Oscar Arias vowed to ensure that Costa Rica plays a full part in the Agreement. However, despite his determination to steer the agreement through the legislative assembly, Arias's efforts may be hampered by his lack of a majority by four seats. Moreover, the Supreme Court has yet to decide whether CAFTA needs a two-thirds majority in order to be approved.

Recommended