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Broward County Policy On Dominican Republic Central America Free Trade Agreement (DR-CAFTA)

Background

The Dominican Republic-Central America Free Trade Agreement (DR-CAFTA) is an agreement that eliminates trade barriers on virtually all trade between the U.S. and the nations of Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua. The agreement was set to take effect January 1, 2006 but has not due to continued negotiations on import quotas and intellectual property protections. No signatory to the agreement is currently operating under it. With the FTAA currently stalled, DR-CAFTA is seen as a positive step toward the goal of a Western Hemisphere FTAA.

Disadvantages

As is the case with the FTAA, and for many of the same reasons, DR-CAFTA faces strong political opposition. Labor and environmental groups point to fewer than predicted improvements in labor and environmental conditions in Mexico under NAFTA as an indication of what will happen under DR-CAFTA. The parties continue to face challenges in resolving issues related to regulation of pharmaceuticals and protection of intellectual property under the agreement. Political instability in signatory countries like Nicaragua will also present challenges to the full implementation of the agreement.

Advantages

South Florida and Broward County currently enjoy a substantial cultural and economic link to the countries currently signed to the agreement, and with the elimination of virtually all remaining barriers to free trade, DR-CAFTA is expected to produce additional investment in Broward County as more companies seek to leverage this area’s proximity and proven leadership as the gateway to the region. Florida’s exports to the region are expected to increase by over half a billion dollars in the first year of the agreement alone.

Recommendation

Given the overall advantages to Broward County presented by the passage of DR-CAFTA, the Broward County supports DR-CAFTA.

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