On March 1, the Dominican Republic joined El Salvador, Guatemala, Honduras and Nicaragua as a country where the U.S.-Central America Free Trade Agreement (CAFTA) has been implemented. March 1 was also the one-year anniversary of the date CAFTA took effect for El Salvador, the first Central American country to implement CAFTA. The Office of the U.S. Trade Representative (USTR) reported in connection with the announcement about the Dominican Republic that exports from El Salvador, Guatemala, Honduras and Nicaragua to the United States grew by over 18 percent in 2006. Salvadoran President Saca likewise said that increased exports to the United States from small- and medium-sized businesses are helping to generate more jobs in El Salvador.
Costa Rica is now the only signatory to the original agreement where CAFTA is not in force. Costa Rica’s legislature has yet to ratify the necessary legislation.
In the same presidential proclamation that announced the implementation of CAFTA for the Dominican Republic, the president also authorized the Committee for the Implementation of Textile Agreements (CITA) to determine whether Nicaragua has failed to comply with its commitment under the tariff preference level (TPL) agreement negotiated with the United States at the time CAFTA was negotiated. The TPL permits Nicaragua duty-free export to the United States of 100,000,000 square meter equivalents (SME) annually of certain cotton and man-made fiber trousers that are cut and sewn in Nicaragua with fabric from anywhere in the world. In return for this TPL, Nicaragua must export to the United States one SME of cotton or man-made fiber trousers for each SME of trousers it exports to the United States under the TPL. According to the presidential proclamation, if CITA determines that Nicaragua has failed to fulfill this commitment, CITA may reduce the overall limit in the TPL for Nicaragua.