Costa Rican trade officials have announced that country will join the Central American Free Trade Agreement with the United States, also known as CAFTA.
“We're very pleased Costa Rica has joined its Central American neighbors in this cutting-edge, modern FTA designed to expand trade between friends and neighbors,” says U.S. Trade Representative Robert B. Zoellick. “With each Central American nation, we worked to tailor market access provisions to reflect individual circumstances, and that work is now complete with Costa Rica.”
In late-December the United States reached a trade agreement with the four Central American countries of El Salvador, Guatemala, Honduras and Nicaragua. However, Costa Rica was not included in the agreement at first, deciding that it needed additional time before signing off on the trade pact.
Proponents of the trade agreement say it will phase out tariffs and other trade barriers, and will promote regional economic integration and growth. Costa Rica currently accounts for approximately one-third of U.S. trade with the five Central American countries. According to the trade agreement, more than half of current U.S. farm exports to Central America will become duty-free immediately under the trade pact, including high quality cuts of beef, cotton, wheat, soybeans, key fruits and vegetables, processed food products, and wine, among others.
Tariffs on most remaining U.S. farm products will be phased out within 15 years. U.S. farm products that Zoellick says will benefit from improved market access include pork, dry beans, vegetable oil, poultry, rice, corn, and dairy products. Textiles and apparel will be duty-free and quota-free immediately if they meet the Agreement's rule of origin, he says.
Although the House and Senate must approve the Central American Free Trade Agreement before it can take affect, President Bush is expected to sign the trade pact when it reaches his desk.