The Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR FTA) came into force in 2006 for the United States, El Salvador, Guatemala, Honduras and Nicaragua, 2007 for the Dominican Republic and 2009 for Costa Rica. Under the free trade agreement, 100% of U.S. exports of consumer goods and industrial goods to CAFTA-DR countries will no longer be subject to tariffs. Tariffs on almost all agricultural products in the United States will expire by 2020. To be treated duty-free under free trade agreements, products must comply with applicable rules of origin. Free-form certification of CAFTA-DR manufacturers and exporters and U.S. importers can be used as an alternative to the presentation of the Certificate of Origin when they have ensured that their products meet the requirements of the CAFTA-DR Free Trade Agreement. Why has CAFTA, like U.S. trade agreements before and after, failed to reduce widespread labour abuses? Kim Elliot, a member of the U.S. Free Trade Agreements` U.S. Free Trade Agreements, recently proposed this statement bluntly: the working provisions of U.S. trade agreements “are included because they are necessary to get congressional business.” She added: “This is really about policy, not how to raise labour standards in these countries.” Worse still, CAFTA has contributed to the economic instability in the region. Development organizations have warned against CAFTA`s very thin passage that the agreement could lead to the ouster of family farmers, who make up a significant part of the workforce in Central America, by forcing them to compete directly with the heavily subsidized U.S.
agricultural industry. Agricultural imports from the United States have doubled in Honduras, El Salvador and Guatemala since the agreement came into force, while countries` agricultural balance with the United States has declined, reflecting farmers` movements. Honduras` trading system is relatively open, with an average tariff rate of about 6% in 2012 (relatively stable at this rate for more than 10 years), a modest application of non-tariff barriers and without recourse to emergency measures. Agricultural products are subject to an average tariff of 10.5%, while the average tariff for non-agricultural products was 5.0%.