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CAFTA OVERVIEW. James McCarthy. Central America at a Glance. 13th Largest Market for U.S. Exports U.S. Exports = $19.6 Billion (2006) Larger Market Than India, Russia, and Indonesia combined Overall Population: 49 million. The CAFTA-DR Region at a Glance. Why Export to Central America?.

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cafta overview

CAFTA OVERVIEW

James McCarthy

the cafta dr region at a glance
13th Largest Market for U.S. Exports

U.S. Exports = $19.6 Billion (2006)

Larger Market Than India, Russia, and Indonesia combined

Overall Population: 49 million

The CAFTA-DR Region at a Glance
why export to the cafta region
Why Export to theCAFTA Region?
  • 40% of Region’s Imports Are From the U.S.
  • On-going Market Liberalization
  • Growing U.S. Hispanic Population
  • Proximity and Receptivity to U.S.
  • Stable Democratic Governments
cafta region at a glance gross domestic product
CAFTA Region at a GlanceGross Domestic Product

Source: Summa Magazine. Sep. 2006

cafta region at a glance growth rates 2006
CAFTA Region at a GlanceGrowth Rates 2006

Source: Country Central Banks

u s exports to cafta dr countries
U.S. Exports to CAFTA-DR Countries

Apparel, Computers and Electronics, and Fabric Mill Products Account for Nearly Half of the Total U.S. Manufactured Exports to DR-CAFTA Markets.

challenges
Financial Reform

Respect for Contracts

Investment Protection

Judicial Reform

Export Promotion

Corruption

Education

IPR Protection

Security

Start-ups; SMEs

Leadership

Challenges
el salvador highlights
El Salvador Highlights

Slightly smaller than Massachusetts

Democratically-elected Government

President Elias Saca (2004)

Smallest country in Central

America

3rd largest economy

Remittances make up 15% of GDP

Largest airport in the region

el salvador highlights14
El Salvador Highlights
  • Smallest Country in CA; Densely Populated
  • Over 2 Million Salvadorans in U.S.
  • Dollarized Economy
  • U.S. is El Salvador's Leading Trading Partner (41% import market share)
  • First country to implement CAFTA-DR (March 1, 2006)
  • % increase in U.S. exports since CAFTA entry into force: 16.3%
guatemala highlights
Guatemala Highlights
  • Largest Economy in CA
  • Economy Nearly Completely Privatized
  • Relatively Low Tariffs (1-17%) for Almost All Products
  • % Increase in U.S. exports since CAFTA entry into force: 17.5%
guatemala highlights16
Guatemala Highlights
  • In 2006, remittances (US$ 3.6 Billion) accounted for 10% of the GDP
  • Implemented DR-CAFTA on July 1, 2006
  • Over 1.3 Million Guatemalans live in the U.S.
nicaragua highlights
Nicaragua Highlights
  • Safest Country in Central America
  • Price Controls Phased-Out
  • Strong Privatization Program
  • Rich in Natural Resources
  • Lack of Diversity in Sector

Development

  • Post CAFTA increase in imports from the U.S.: 13.2%
nicaragua highlights18
Nicaragua Highlights
  • Democratically-elected Government
  • President Daniel Ortega – January 07 – Policies?
  • Constitutional Government
  • Formal Independent Court System
nicaragua highlights19
Nicaragua Highlights
  • Lowest Wage Rates in CA
  • Benefiting most from CAFTA... early days (13.2% rise in imports from U.S.; 17.3 percent increase in exports to U.S.)
  • Economic Diversification Just Beginning
  • Needs Infrastructure
  • New Government: Words and Deeds
honduras highlights
Honduras Highlights
  • Competitive Labor Costs
  • U.S. Accounts for 50% of All Foreign Trade
  • Maquiladora Industry Accounts for 15% of GDP and 11% of Exports
  • Largest Port in CA
  • U.S. Has 40% of FDI in Honduras
  • % increase in U.S. exports since CAFTA entry into force: 15.5%
costa rica highlights
Costa Rica Highlights
  • 19,652 square miles (size of West Virginia)
  • 95% literacy rate
  • Spanish Language (English Widely Spoken)
  • Democratic Republic
  • Life Expectancy: 76 years
costa rica highlights22
Costa Rica Highlights
  • President: Oscar Arias, May 2006
  • Tourism is key for its economy
  • Poor infrastructure
  • 70% of FDI comes from the United States. (CINDE)
  • High-tech companies and call centers/large employers
cafta dr dates approval implementation
CAFTA-DR DatesApproval/Implementation
  • Legislatures: Approval Implementation
    • El Salvador: 12/17/2004 3/1/2006
    • Honduras:03/04/2005 4/1/2006
    • Guatemala: 03/11/20057/1/2006
    • U.S.A. 07/28/2005 8/2/2005
    • Nicaragua 10/11/2005 4/1/2006
    • DR 09/06/2005 31/1/2007

*Costa Rica – Referendum

opportunities best prospect industries
Opportunities: Best Prospect Industries

Automotive Parts and Service Equipment

Food Processing & Packaging Equipment

Electric Power Generation & Distribution

Equipment

Hotel and Restaurant Equipment

Franchising

Security and Safety Equipment and Services

Telecommunications Equipment and Services

Construction Equipment