The Dominican Republic-Central America Free Trade Agreement (DRCAFTA) demonstrates that developing countries are beginning to recognize the importance of open and transparent government procurement. DRCAFTA accomplishes this important objective by including many of the principles and commitments of the WTO Government Procurement Agreement, to which the DR-CAFTA parties are not signatories.

DR-CAFTA meets Trade Promotion Authority (TPA) negotiating objectives for government procurement.

• The principal negotiating objective established by Congress for government procurement in TPA is to establish consultative mechanisms among the parties to promote increased transparency in developing guidelines, rules, regulations and laws for government procurement and other regulatory regimes. DR-CAFTA accomplishes this.
• DR-CAFTA grants U.S. suppliers nondiscriminatory rights to bid on contracts from Central American government ministries, agencies and departments. It covers the purchases of most Central American central government entities, including key ministries and state-owned enterprises. It requires fair and transparent procedures, stipulating specific procedures for advance notice of purchases and timely and effective bid review. And it ensures that bribery in government procurement is specified as a criminal offense under Central American and U.S. laws.

U.S. businesses endorse DR-CAFTA’s procurement provisions.

• DR-CAFTA is a major step forward in improving market access in the region for U.S.-based firms. It greatly improves the ability of those firms to make informed trade and investment decisions. The transparency and regulatory certainty that will flow from DR-CAFTA’s government procurement provisions is one important step toward that end. As a result of DR-CAFTA, only U.S. firms will benefit from this certainty since other countries have not yet undertaken these obligations through the WTO.