Skip to Content

CAFTA-DR (Dominican Republic-Central America FTA)

On August 5, 2004, the United States signed the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR) with five Central American countries (Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua) and the Dominican Republic. The CAFTA-DR is the first free trade agreement between the United States and a group of smaller developing economies. This agreement is creating new economic opportunities by eliminating tariffs, opening markets, reducing barriers to services, and promoting transparency. It is facilitating trade and investment among the seven countries and furthering regional integration.

Central America and the Dominican Republic represent the third largest U.S. export market in Latin America, behind Mexico and Brazil. U.S. exports to the CAFTA-DR countries were valued at $19.5 billion in 2009. Combined total two-way trade in 2009 between the United States and Central America and the Dominican Republic was $37.9 billion.

The agreement entered into force for the United States and El Salvador, Guatemala, Honduras, and Nicaragua during 2006, for the Dominican Republic on March 1, 2007, and for Costa Rica on January 1, 2009. With the addition of Costa Rica, the CAFTA-DR is in force for all seven countries that signed the agreement.

On August 15, 2008, the CAFTA-DR Parties implemented important changes to the agreement’s textiles provisions, including changing the rules of origin to ensure that pocket fabric in apparel is sourced from the United States or another CAFTA-DR Party. The Parties also implemented a reciprocal textile input sourcing rule with Mexico. Under this rule, Mexico will provide duty-free treatment on certain apparel goods produced in a Central American country or the Dominican Republic with U.S. input, and the United States will provide reciprocal duty-free treatment under the CAFTA-DR on certain apparel goods produced in a Central American country or the Dominican Republic with Mexican input. These changes will further strengthen and integrate regional textile and apparel manufacturing and create new economic opportunities in the United States and the region.

CAFTA/DR Trade Facts:

CAFTA/DR countries combined would currently be our 14th largest goods trading partner with $60 billion in total (two way) goods trade during 2013. (Note: CAFTA/DR countries would have been the 10th largest if EU countries were grouped together as one entity, as well as NAFTA countries).  Exports totaled $30 billion; Imports totaled $30 billion; The U.S. goods trade deficit with CAFTA/DR was $662 million in 2013.

Exports 

U.S. goods exports to CAFTA/DR countries in 2013 were $29.5 billion, down 1.5% ($449 million) from 2012, but up 95.9% from 2003.

CAFTA/DR countries combined would have been the United States= 14th largest goods export market in 2013. (Note: CAFTA/DR countries would have been the 10th largest if EU countries were grouped together as one entity, as well as NAFTA countries)

The U.S. export markets in CAFTA/DR for 2013 were: Costa Rica ($7.2 billion), Dominican Republic ($7.2 billion), Guatemala ($5.5 billion), Honduras ($5.3 billion), El Salvador ($3.2 billion), and Nicaragua ($1.1 billion).

The top export categories (2-digit HS) in 2013 were: Mineral Fuel ($6.7 billion), Electrical Machinery ($3.3 billion), Machinery ($2.3 billion), Special Other (low value and charity shipments) ($2.0 billion), and Plastic ($1.5 billion).

U.S. exports of agricultural products to CAFTA/DR countries totaled $3.8 billion in 2013, as a group it would be the 6th largest U.S. Ag export market. Leading categories include: soybean meal ($566 million), wheat ($529 million), corn ($309 million), and prepared food ($212 million).

Imports 

U.S. goods imports from CAFTA/DR countries totaled $30.1 billion in 2013, down 2.5% ($766 million) from 2012, but up 78.5% from 2003.

CAFTA/DR countries combined would have been the United States=16th largest goods import supplier in 2013. (Note: CAFTA/DR countries would have been the 11th largest if EU countries were grouped together as one entity, as well as NAFTA countries)

The U.S. import suppliers from CAFTA/DR for 2013 were: Costa Rica ($11.9 billion), Honduras ($4.5 billion), Dominican Republic ($4.3 billion), Guatemala ($4.2 billion), Nicaragua ($2.8 billion), and El Salvador ($2.4 billion).

The five largest import categories in 2013 were: Electrical Machinery ($9.7 billion), Knit Apparel ($6.1 billion), Edible Fruit and Nuts (bananas, pineapples) ($2.2 billion), Woven Apparel ($1.9 billion), and Optic and Medical Instruments ($1.8 billion).

U.S. imports of agricultural products from CAFTA/DR countries totaled $4.9 billion in 2013, as a group it would be the 3rd largest supplier of Ag imports. Leading categories include: bananas and plantains ($1.3 billion), coffee (unroasted) ($1.0 billion), fresh fruit (excluding bananas) ($763 million), fruit and vegetable juices ($275 million), and processed fruit and vegetables ($260 million).

Balance of Merchandise Trade 

The U.S. goods trade deficit with CAFTA/DR was $662 million in 2013, down 32.4% ($317 million) from 2012.

Investment 

Reported U.S. foreign direct investment (FDI) in CAFTA/DR countries (stock) was $7.1 billion in 2012 (latest data available), roughly the same as 2011.

Reported U.S. direct investment in CAFTA/DR countries is led by the manufacturing sector.

CAFTA/DR countries= reported FDI in the United States (stock) was not available in 2012.

**CAFTA/DR consists of Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua.


Note: Services trade data with CAFTA/DR countries are not available. 

United States Proceeds with Labor Enforcement Case Against Guatemala

The United States is proceeding with a labor enforcement case against Guatemala under the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR).  The U.S. has engaged extensively with Guatemala in an effort to improve labor law enforcement, which has led to the signing of a groundbreaking Enforcement Plan between the United States and Guatemala in April 2013.  Guatemala took a number of important steps to implement the Enforcement Plan; however, critical actions agreed to under the Enforcement Plan still remain outstanding.  Further steps are necessary to demonstrate that the legal reforms Guatemala has undertaken are being effectively implemented, leading to concrete improvements on the ground.

Learn more here.