IT Products Among CAFTA's Immediate Beneficiaries

By John S. McClenahen Under terms of the five-nation U.S.-Central America Free Trade Agreement (CAFTA) announced Dec. 17, U.S. exports of information technology products, agricultural and construction equipment, paper products, chemicals, and medical and scientific equipment would gain immediate duty-free access to El Salvador, Guatemala, Honduras and Nicaragua. Indeed, more than 80% of U.S. exports of consumer and industrial products to Central America would be free of duties once the trade pact took effect, figures the Office of the United States Trade Representative. The duty-free figure for U.S. consumer and industrial product exports would rise to 85% within five years of implementation -- and the remaining tariffs would be gone by 10 years. In addition to consumer and industrial goods, the pending agreement covers agriculture, services and government procurement. It would also make permanent the trade benefits Central American countries already receive under the U.S. Caribbean Basin Trade Partnership Act, meaning that nearly all consumer and industrial products made in Central America would enter the U.S. duty free once the CAFTA was implemented. A fifth Central American country, Costa Rica, could be added to the CAFTA before the Bush administration signs the pact. For the U.S., action now moves from the negotiating table to Capitol Hill, where the CAFTA is expected to face heated debate next year in the House and Senate. Under terms of the Trade Act of 2002, the White House must notify Congress of its intent at least 90 days before the signing of the agreement, and that notification is expected to be delivered "early next year," says the trade representative's office. A draft text of the CAFTA agreement is slated to be released in January. U.S. President George W. Bush announced his intention to negotiate a free-trade agreement with Central American countries on Jan. 16, 2002. Between January 2003, when negotiations began, and Dec. 17, nine rounds of bargaining took place.

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