USTR Visit Highlights Importance of Central American Free Trade Agreement (CAFTA) Negotiations

WASHINGTON – U.S. Trade Representative Robert B. Zoellick will travel to Central America October 1-3, to discuss the ongoing U.S.-Central America Free Trade Agreement (CAFTA) negotiations with the Presidents of Costa Rica, El Salvador and Nicaragua; Central American trade ministers; legislators; and, members of the private sector and civil society.

"This year we opened an important positive chapter in U.S. – Central American relations with our negotiations on a comprehensive free trade agreement to open our markets and expand opportunities for our peoples. We have made great strides this year in our CAFTA negotiations, and I look forward to discussing with Presidents Pacheco, Flores, Bolanos, and my ministerial colleagues our efforts to complete the negotiations this year," said Zoellick. "Central America holds great promise for building on our already close trade ties that have spurred jobs and growth in all our countries. The recent setback in Cancun of the global trade talks makes it all the more important that we continue pressing to open markets bilaterally with CAFTA and throughout the hemisphere with the Free Trade Area of the Americas."

"In particular, I am pleased that I will be able to listen and learn from entrepreneurs and business students who are focused on regional growth opportunities, and members of civil society who are working to improve environmental and labor conditions," said Zoellick.

On Wednesday, October 1, Zoellick will visit Costa Rica, where he will meet with parliamentarians, participate in a roundtable with Central American business leaders at a Procter and Gamble facility and have lunch with Costa Rican workers and Ministry of Labor officials at a local foods plant. He will then meet with President Pacheco.

On Thursday, October 2, Zoellick will visit El Salvador and tour a local organic soap manufacturing company, meet with President Flores and then participate in a meeting of the CAFTA trade ministers. The ministers will discuss progress on negotiations for a United States-Central America Free Trade Agreement (CAFTA), the Free Trade Area of the Americas (FTAA), the outlook for global trade talks, trade capacity building, and closer trade ties between Central American nations and the United States. The trade ministers and chief negotiators from the United States and Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua will participate in the meeting.

In addition to reviewing the progress in the CAFTA negotiations, the ministers will discuss how trade capacity-building initiatives can help the Central American nations effectively implement and benefit more fully from the CAFTA. U.S. trade-related technical assistance aims to build the capacity of developing countries to participate in the global trading system.

"Our efforts in the area of trade capacity building underscore our commitment to improving lives in developing countries through trade and aid," Zoellick said. Over $60 million in U.S. traderelated technical assistance has been provided to the CAFTA countries this year.

Following the Thursday meetings, Zoellick will travel to Nicaragua where he will meet with President Bolanos and then participate in a roundtable discussion with students at the Central American Institute of Business Administration (INCAE).

Zoellick will finish his visit on Friday in Nicaragua, where he will meet with parliamentarians and other stakeholders from Nicaragua’s business community and civil society.

Background

The United States is currently negotiating the CAFTA with Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua. We are aiming to conclude the negotiations in December 2003. On August 4, the Administration notified Congress of its intent to also initiate negotiations with the Dominican Republic, and to seek to integrate the Dominican Republic into the CAFTA. The Administration could then send Congress one bill that would include the six countries.

The United States and the five Central American countries share almost $25 billion in total (two-way) trade in goods. U.S. goods exports to the Central Americans are on track to reach $11.5 billion in 2002, better than a 42 percent increase since 1996. That total is about the same as U.S. exports to Russia, India and Indonesia combined. The United States is expected to import $13 billion of goods from the Central Americans in 2003, of which 74 percent entered duty free under the Caribbean Basin Initiative and Generalized System of Preference programs.

There have been seven rounds of CAFTA negotiations held so far, with two more scheduled.