DR-CAFTA: Regional Issues

RS22164 -- DR-CAFTA: Regional Issues

Updated February 10, 2006


On August 5, 2004, the United States signed the U.S.- Dominican Republic-Central America Free Trade Agreement (DR-CAFTA) with five Central American countries (Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua) and the Dominican Republic. DR-CAFTA could have a significant effect on U.S. relations with the region by establishing a permanent reciprocal trade preference arrangement among the signatory countries. The House and Senate passed the required implementing legislation (H.R. 3045) for DR-CAFTA in July 2005, and President Bush signed it into law (P.L. 109-53) on August 2, 2005. DR-CAFTA has been ratified by five of the six legislatures (Dominican Republic, El Salvador, Honduras, Guatemala, and Nicaragua), but ratification has stalled in Costa Rica, and significant opposition to the agreement exists in many of the signatory countries. Implementation of the agreement has been delayed from the original target date of January 2006, causing negative political, and possibly economic, repercussions in many countries. Regional concerns focus on DR-CAFTA's likely effects on the rural poor, labor conditions, the environment, and domestic laws. This report will be updated periodically. For more information, see CRS Report RL32322, Central America and the Dominican Republic in the Context of the Free Trade Agreement (DR-CAFTA) with the United States, coordinated by [author name scrubbed].