Trade expansion is an important catalyst for U.S. economic growth. Exports account for about one-quarter of U.S. economic growth, and exportrelated jobs pay more, on average, than nonexport-related jobs. The Dominican Republic-Central America Free Trade Agreement (DR-CAFTA) will open new opportunities for U.S. manufacturers to export industrial goods to our neighbors, not only helping those economies grow and thrive but also expanding new opportunities for growth at home.

Elimination of trade barriers promises growth for U.S. exports.

• Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic together already represent the second-largest U.S. export destination in Latin America. DR-CAFTA will render 80 percent of U.S. exports to the region permanently duty free upon implementation. A range of industrial goods, from yarns to medical and scientific equipment, stand to gain from this development. DR-CAFTA is comprehensive, and all tariffs will be removed within 10 years.
• Guatemala, Honduras, Nicaragua and the Dominican Republic will join the Information Technology Agreement (Costa Rica and El Salvador already are signatories), opening up duty-free export opportunities for a host of products in which American producers lead the world.
• The International Trade Commission estimates that, after DR-CAFTA is fully implemented, U.S. textile, apparel and leather products exports to the region will have grown by $803 million (or 15 percent); petroleum, coal, chemicals, rubber and plastic products by $406 million (or 13 percent); nonelectric machinery by $401 million (or 20 percent); and motor vehicles and parts by $180 million (or 48 percent).

DR-CAFTA levels the playing field for U.S. manufacturers.

• Under the Generalized System of Preferences program and the Caribbean Basin Initiative, the United States already provides virtually duty-free treatment to imports from DR-CAFTA countries. DR-CAFTA will level the playing field by opening the markets of Costa Rica, El Salvador, the Dominican Republic, Guatemala, Honduras and Nicaragua to U.S. exports.

DR-CAFTA meets Trade Promotion Authority (TPA) negotiating objectives for industrial goods.

• The principal negotiating objective established by Congress for industrial goods in TPA is to obtain competitive opportunities for U.S. exports that are “substantially equivalent” to those afforded foreign exports to the United States. Our negotiators have met this objective in DR-CAFTA.
• U.S. treatment of industrial goods imported from the region, largely barrier free at present, will be matched when DR-CAFTA is fully implemented with similar access for U.S. industrial exports.
• TPA further instructs U.S. negotiators to incorporate effective dispute settlement provisions for trade disputes. Such provisions are part of DR-CAFTA.
• TPA also stipulates that trade agreements should “foster economic growth, raise living standards, and promote full employment in the United States and enhance the global economy.” The International Trade Commission concluded that the agreement, when fully implemented, will provide benefits to the U.S. economy worth an additional $166 million each year.

U.S. manufacturers endorse DR-CAFTA.

• Congressional approval of DR-CAFTA will promote economic growth and better working conditions in the developing countries included in this agreement. It also will help sustain U.S. economic growth. DR-CAFTA should not be viewed by Congress in isolation. It is an important building block in our overall trade strategy to open markets for U.S. companies and workers through a network of free trade agreements and through the World Trade Organization — a strategy that promotes economic growth in the United States.
• A 10 percent increase in U.S. exports leads to a 7 percent increase in U.S. employment. In contrast, a 10 percent increase in domestic sales generates a 4 percent increase in U.S. employment.
• DR-CAFTA can serve as a model of how developing and industrial nations can work together to find consensus on trade liberalization. Increased access to international markets is critical to the future growth and prosperity of the U.S. economy and to the economies of DR-CAFTA partners.