US And Central America Sign Free Trade Deal

by Mike Godfrey, Tax-News.com, Washington

02 June 2004

Costa Rica, along with four other Central American nations, finally signed a free trade accord with the United States in Washington last week which will go into effect subject to ratification by the legislatures of the countries concerned.

The Central American Free Trade Agreement, or CAFTA, will eliminate tariffs and duties on around 80% of manufactured goods and 50% of agricultural products exported from the United States to Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua.

Tariffs on all other goods, with the exception of American sugar and a few Central American agricultural goods, will be phased out over a longer period.

Applauding the pact, the US National Association of Manufacturers said: “This is the highest-quality trade agreement yet.”

“Not only does it eliminate tariffs on 80 percent of US manufactured exports immediately, but it also sets new standards for intellectual property protection, anti-corruption measures, open distribution channels, and other issues that are important for US companies,” observed NAM Vice President for International Economic Affairs, Frank Vargo.

Meanwhile, Costa Rica’s Foreign Trade Minister Alberto Trejos commented that the sealing of the CAFTA deal was “a moment of great satisfaction” for the country.

“It was a hard negotiation, during which the country obtained the balance and objectives it had proposed at the beginning of the process,” noted Trejos.

Recommended