Guest Column
Central America Free Trade Agreement (CAFTA) – Pros and Cons
By Hugo W. Merida, CEO - Los Angeles Metro Hispanic Chambers of Commerce
About
American Business
If DR-CAFTA is rejected, today's trade imbalance will continue. Nearly 80% of
Central American and Dominican products already enter the
U.S. market duty free,
while U.S. manufactured goods face steep tariffs. In other words, these
countries already have nearly complete access to our marketplace while we
have limited access to theirs.
If DR-CAFTA is approved, it will end this unfair trade imbalance,
which contributes to the overall U.S. trade deficit, by opening the region's
markets to U.S. exports. Over 80% of U.S. consumer and industrial goods will
gain immediate tariff-free access into the region. A study by the National
Association of Manufacturers projects the agreement will generate $1 billion
in new exports by
U.S.
manufacturers. A series of state-specific studies by the U.S. Chamber of
Commerce shows DR-CAFTA will generate $4 billion in new sales and over
25,000 new jobs in its first year across the entire economy.
About American
Jobs
If DR-CAFTA
is rejected,
rising international competition in the textile and apparel industries will
drive more jobs out of the United States, According to a survey by the
American Apparel and Footwear Association (AAFA), 57% of its member
companies' executives expect to decrease their sourcing in Central America
and the Dominican Republic if DR-CAFTA is rejected. That means lost sales
for American textile manufacturers and their employees.
If DR-CAFTA is approved, the same AAFA survey found that 51% of its
member companies expect to increase their sourcing in Central America and
the Dominican Republic, and another 41% expect to maintain their current
level. Given that apparel imported from China has less than 1% U.S. content
- whereas garments imported from Central America and the Dominican Republic
have on average 60% U.S. content - prospects for America's textile industry
and its 650,000 employees are considerably brighter with DR-CAFTA.
About American Farmers and
Ranchers
If DR-CAFTA is rejected, American farm exports will continue to face steep tariffs
on their exports. The average agricultural tariff applied to
U.S. exports to these
countries exceeds 11% and is much higher for key products such as beef
(tariffs range from 15-30%), pork (15-47%), rice (15-60%), and corn (as high
as 45%). By contrast, over 99% of Central American and Dominican
agricultural products already enter the
U.S.
market duty free.
If DR-CAFTA is approved, it will immediately eliminate tariffs on
more than half of all
U.S.
farm products, with nearly all others phased out over a few years. A study
by the American Farm Bureau Federation projects the agreement will boost
U.S. farm exports to the region by $1.5 billion per year.
About American Sugar Producers
If DR-CAFTA is rejected, the status quo will continue. Today, sugar
is the most protected commodity in U.S. agriculture. According to the
non-partisan Government Accountability Office, America's consumers are
overpaying for their sugar to the tune of nearly $2 billion per year. Much
of this money goes to
U.S.
sugar growers, who represent less than one-half of one percent of American
farmers.
If DR-CAFTA is approved, the status quo will continue. Sugar will
continue to be the most protected commodity in U.S. agriculture. The
miniscule amount of sugar that will enter the United States under DR-CAFTA
amounts to just 1% of
U.S.
consumption or about 1.5 teaspoons per week for every American. Unlike the
Weather and the Atkins diet, DR-CAFTA will have no noticeable impact on
sugar prices whatsoever.
Support the Free Trade Agreement with
Central America and the
Dominican Republic
by
contacting your Congressperson in Washinghton
because it is
Opportunity
and Growth in Our Neighborhood
FROM THE DESK OF: Hugo W. Merida
CEO - Los Angeles Metro Hispanic Chambers of Commerce
Chairman - International Trade Committee of The California Hispanic Chambers of Commerce -
DR-CAFTA Groups Leader - The United States Hispanic Chambers of Commerce
3333 Wilshire Blvd., Suite 607, Los Angeles, CA USA 90010
Tel 213-739-7016 fax 213-389-5775
hmerida@hugomerida.org www.hugomerida.org
hmerida@chamberla.org www.chamberla.org