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Statement of USTR Spokesman Stephen Norton Regarding CAFTA-DR Implementation

"The United States has been working intensively with free trade agreement partners in Central America and the Dominican Republic in order to implement the CAFTA-DR. The United States will implement the CAFTA-DR on a rolling basis as countries make sufficient progress to complete their commitments under the agreement.

"Several countries are close to being ready to implement but none has completed all of their internal procedures. For example, on December 15 El Salvador’s Congress passed a legislative package to implement the CAFTA-DR. Once the Congress sends the legislation to President Saca for signature in early January, El Salvador will have the ability to issue further regulations and complete its internal steps and the final CAFTA implementation review process with the United States.

"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 of the United States and of its CAFTA-DR partners could be jeopardized.

"During the interim period before full implementation, countries can continue to enjoy existing trade preferences."

Background

Countries which are signatories to CAFTA-DR include the United States, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua. All of the CAFTA-DR signatories have ratified the Agreement except Costa Rica. El Salvador was the first to ratify in December 2004. Nicaragua was the most recent, in September 2005.

Implementing legislation for the CAFTA-DR passed the U.S. Senate in June and the House of Representatives in July, 2005, and was signed by the President in August.

The CAFTA-DR partners agreed to a target date of January 1, 2006, for entry into force. All countries recognized, however, that this was an ambitious goal, and that all countries might not have completed their implementation process by that time. Other U.S. free trade agreements have had a longer preparation period to get ready (typically 6-7 months with only one country), so the need for additional time is not unusual.

With the exception of Costa Rica, all of the countries are working to complete the implementation process as soon as possible. Under the "rolling admissions" process, entry into force would occur on the first day of the month with a country that the USTR determines is ready by the middle of the preceding month. The intervening time will allow for a Presidential proclamation to be prepared. Implementation as early as February 1 is possible in some cases.

CAFTA-DR is the second largest U.S. export market in Latin America, behind only Mexico, buying more than $16 billion in U.S. exports. Successful CAFTA-DR implementation is critical to the broader U.S. policy goals for the Americas of strengthening democratic governance, expanding economic opportunity, and investing in people.

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