CONCERNS ABOUT IMPACT OF FULL CAFTA/DR IMPLEMENTATION IN DOMINICAN REPUBLIC

For many years the Dominican Republic (DR) has been one of the top export destinations for US dry bean exports in the Americas and is the top export market in the region (minus Mexico) for the period September – July 2019 at 26,000 MT. This is down slightly from the same period in 2018 which was recorded at 32,000 MT. One of the reasons for our success in this market is the CAFTA/DR free trade agreement that went into effect in 2005.  The agreement includes a tariff rate quota (TRQ) system that gives us the advantage of duty free market access for a specific quantity of our exports every year until full implementation. Once the duty free quota is filled, preferential duties are offered on a sliding scale depending on quantity for up to 36,000 MT of US origin dry beans as part of this quota system.

TRQs are a critical part of this trade agreement as they create a binding commitment to import from the US at preferential or zero duty tariffs.  This is critical in a market like the DR where dry beans are considered a ‘sensitive’ product as they are grown in significant but not sufficient quantities locally. In 2020, the CAFTA/DR agreement reaches full implementation and there will be no more TRQs as imports will be allowed in unlimited quantities at zero duty tariffs. This sounds like a huge advantage, but without the commitment of a quota, we are concerned that the current trade regime could be challenged in the DR in a way that could impact our exports. This is a sensitive and complex issue that we are working closely with the office of the U.S. Trade Representative and the Foreign Agricultural Service (FAS) to ensure that it does not impact our market share. More to come.