CAFTA to be Implemented on ‘Rolling’ Basis

January 6, 2006

WASHINGTON, D.C. (EFE) – The United States announced last week that implementation of the free-trade agreement between the United States, Central American and the Dominican Republic (CAFTA-DR) – originally set for Jan. 1 – will take place “on a rolling basis as countries make sufficient progress to complete their commitments under the agreement.”

 

The announcement was made official Dec. 30 in a statement from by U.S. Trade Representative spokesman Stephen Norton, although news of the rolling start date had been leaked earlier in the month (NT, Dec. 23, 2005).

 

“Several countries are close to being ready to implement, but none has completed all of its internal procedures,” Norton said in explaining the decision to phase-in the treaty. “The United States will continue to work intensively with CAFTA-DR partners to bring them on board as quickly as possible. At the same time, the implementation process should not be rushed.

 

Otherwise, the benefits of CAFTA-DR to farmers, workers, businesses and consumers could be jeopardized.” The rolling basis start date means that countries will enter into the free-trade pact as soon as they are ready.

 

The main sticking point is over intellectual property rights. Though the trade pact has provisions to protect intellectual property rights, many of the participating Central American countries’ national copyright and intellectual property laws are insufficient or lacking.

 

Now these countries are being asked to modernize their own legislation before entering into free trade with the United States. Apparently, not everyone was clear on what needed to happen for the trade pact to enter into force.

 

One Nicaraguan CAFTA insider told The Nica Times recently that the United States never made it clear that Nicaragua had to pass new intellectual property rights legislation before entering into the free trade agreement. If that had been known earlier, appropriate steps would have been taken last year, he said.

 

Nicaragua’s Executive Branch this week presented the legislative National Assembly with draft bill of new intellectual property rights law, which it hopes to pass by next month.

 

Of the five participating Latin countries, El Salvador reportedly is the closest to being ready to enter into the free-trade pact, and the Dominican Republic is the furthest from being ready. Costa Rica has yet to ratify the trade pact.

 

Once the accord is fully implemented, the Central American countries and the Dominican Republic will be able to seek reimbursement from the United States for duties paid after Jan. 1 on textile and clothing exports that are freed of such levies under CAFTA-DR.

 

“During the interim period before full implementation, countries can continue to enjoy existing trade preferences,” Norton said.

 

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