CAFTA: And Now There Are Five

ByJohn S. McClenahen Five Central American countries will be on the roster of partners when the Bush Administration sends Congress notice of its intention to sign the U.S.-Central America Free Trade Agreement (CAFTA). The U.S. and Costa Rica reached agreement on Jan. 25. In December 2003, the U.S. reached agreement with El Salvador, Guatemala, Honduras and Nicaragua. Costa Rica accounts for about one-third of all U.S. trade with the five Central American countries now signed up for CAFTA. Exports of U.S. goods to Costa Rica were valued at $3.5 billion last year; imports were $3.4 billion, according to figures from the Office of U.S. Trade Representative Robert B. Zoellick. The U.S. expects to conduct CAFTA negotiations with the Dominican Republic during the next few months. Under the terms of CAFTA, more than 80% of U.S. consumer- and industrial-goods exports to Central America would become duty-free upon the pact's implementation. The remaining tariffs would be phased out over 10 years.