Report providing background information on current political and economic conditions in the Dominican Republic, as well as an overview of some of the key issues in U. S.-Dominican relations.

On August 5, 2004, the United States, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Republic signed the Dominican Republic- Central America-United States Free Trade Agreement, or the DR-CAFTA. The DR-CAFTA was negotiated as a regional agreement in which all parties would be subject to the “the same set of obligations and commitments,” but with each country defining its own separate schedules for market access. It is a comprehensive and reciprocal trade agreement, which distinguishes it from the unilateral preferential trade arrangement between the United States and these countries as part of the Caribbean Basin Initiative (CBI), as amended. It liberalizes trade in goods, services, government procurement, intellectual property, investment, and addresses labor and environment issues.

On August 2, 2005, President Bush signed into law the bill to implement the Dominican Republic-Central American Free Trade Agreement, or DR-CAFTA (P.L. 109-53, H.R. 3045). In DR-CAFTA, the United States and six countries will completely phase out tariffs and quotas — the primary means of border protection — on all but four agricultural commodities traded between them in stages up to 20 years. The four exempted products are as follows: for the United States, sugar; for Costa Rica, fresh onions and fresh potatoes; and for the four other Central American countries, white corn. DR-CAFTA’s provisions, once fully implemented, are expected to result in trade gains, though small, for the U.S. agricultural sector. This report describes this agreement in detail, as well as the stances of both supporters and detractors.