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DR-CAFTA By Jessie Pina and Christopher Ruiz

DR-CAFTA By Jessie Pina and Christopher Ruiz. Agenda. CAFTA Benefits Regionalization Central American Region Imports and Exports Agriculture Industry Textile Industry Telecommunication Industry Pros and Cons Conclusion. Signed on August 2, 2005 Participating countries: Guatemala

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DR-CAFTA By Jessie Pina and Christopher Ruiz

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  1. DR-CAFTA By Jessie Pina and Christopher Ruiz

  2. Agenda • CAFTA • Benefits • Regionalization • Central American Region • Imports and Exports • Agriculture Industry • Textile Industry • Telecommunication Industry • Pros and Cons • Conclusion

  3. Signed on August 2, 2005 Participating countries: Guatemala El Salvador Honduras Costa Rica Nicaragua Dominican Republic United States CAFTA

  4. Benefits • Reciprocal Trade Agreement • 80% of US exports will be duty-free • Access to service markets • Better Business Environment • Better access to markets • Consumers will be benefit • Labor rights • Environmental protection

  5. Regionalization • Both US and Central American firms are regionalizing • Highway integration throughout the region • Central American Countries are working together

  6. Central American Region • 48 million population • 10th largest market for US exports • 18 million labor force • Average GDP per capital $6,500 • GDP per capital: US vs. Central America • $48,000 vs. $39,200 CIA Factbook

  7. GDP per capita • Guatemala $5,400 • El Salvador $6,400 • Honduras $3,700 • Nicaragua $3,000 • Costa Rica $11,900 • Dominican Republic $8,800 CIA Factbook

  8. Real GDP Growth Rate

  9. Imports • USA- 2,190,000,000,000 • Central America • Guatemala $ 15,420,000,000 • El Salvador $ 9,750,000,000 • Nicaragua $ 5,279,000,000 • Honduras $10,200,000,000 • Dominican Republic $ 16,020,000,000 • Costa Rica $ 15,370,000,000 CIA Factbook

  10. Exports • USA- $ 1,377,000,000,000 • Central America • Guatemala $ 8,028,000,000 • El Salvador $ 4,550,000,000 • Nicaragua $ 3,183,000,000 • Honduras $ 6,236,000,000 • Dominican Republic $ 7,170,000,000 • Costa Rica $ 9,675,000,000 CIA Factbook

  11. Agriculture • Tariffs on virtually all agricultural and food products are being eliminated • Change the "one-way-street" of duty-free access currently enjoyed by CAFTA countries on most of their exports into a "two-way-street" that provides U.S.

  12. Textile • Competition • Protects US jobs • Protects US Exports • Illegal Transshipments • Low labor cost • Close proximity to US

  13. Communication • Telephone landlines (in use): • United States 163,200,000 • Guatemala 1,355,000 • El Salvador 1,080,000 • Nicaragua 247,900 • Honduras 821,200 • Dominican Republic 907,000 • Costa Rica 1,437,000

  14. Communication Cont- • Mobile phones: • United States 255,000,000 • Guatemala 10,150,000 • El Salvador 6,137,000 • Nicaragua 2,123,000 • Honduras 4,185,000 • Dominican Republic 5,513,000 • Costa Rica 1,503,000

  15. Pros • 40% of imports are from the US • 2nd largest Latin American economy • Stable, democratic governments • Close to the US • Increase Hispanic population in the US • Increase Investment, economic growth, and trade • Ability to compete with China ex. Textile

  16. Cons • Threatens Agriculture sector • Globalization • Promotes privatization and deregulation • Environmental Concerns • Inability to compete with economies of scale. • Test data exclusivity • US Politics • http://www.youtube.com/watch?v=jMa85z9zxhg

  17. Conclusion • Important FTA • Can CAFTA be beneficial? • Efficiency • Legal system?

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