The Dominican Republic-Central America Free Trade Agreement (DR-CAFTA) will open new opportunities for American telecommunications services providers to export to U.S. neighbors, not only helping those economies to grow and thrive but also expanding new opportunities for growth at home.

DR-CAFTA levels the playing field for U.S. telecommunications services.

• While the United States’ DR-CAFTA partners already have begun to liberalize their telecommunications services sectors, important barriers remain, many of which are addressed in the agreement:
  • DR-CAFTA grants nondiscriminatory access to and use of public telecommunications networks and services.
  • It ensures that each party’s telecommunications regulatory body is separate from and not accountable to any public telecommunications services
  • a provision that is critical to ensuring fairness, impartiality and regulatory integrity in each country’s telecommunications sector.
  • The “negative list” approach for services means that all new telecommunications services not initially exempted will be liberalized automatically.
  • DR-CAFTA’s technical barriers to trade eliminate standards, regulations and procedures that have slowed trade growth in telecommunications products and services in recent years.
  • Costa Rica’s decision to liberalize its government-owned telecommunications company’s monopoly is a major achievement of DR-CAFTA. For example, Costa Rica has agreed to open private network and Internet services in 2006 and mobile wireless services in 2007. It also has agreed to grant private firms flexibility in the choice of network technology and to establish an independent regulator for the sector.

Elimination of trade barriers promises growth for U.S. telecommunications providers.

• U.S. telecommunications providers are optimistic that these commitments will increase demand for services in which U.S. providers are highly competitive, including Internet and private network services.
• DR-CAFTA also eliminates, or binds at zero, tariffs on a range of telecommunications products exported by U.S. companies. U.S. exports of these products have been declining recently, but commercial opportunities that will flow to U.S.-based firms as the economies in the region grow are expected to reverse that export trend.

DR-CAFTA meets Trade Promotion Authority (TPA) negotiating objectives for telecommunications services.

• A number of the principal negotiating objectives established by Congress in TPA are relevant to U.S. telecommunications providers, including the elimination of regulatory and other barriers that deny national treatment and market access or unreasonably restrict the establishment or operations of services suppliers and the reduction or elimination of artificial or trade-distorting barriers to foreign investment.
• TPA also broadly instructs U.S. negotiators to seek trade agreements that foster economic growth, raise living standards, promote full employment in the United States and enhance the global economy. This negotiating objective is particularly relevant to U.S. telecommunications providers, which find new opportunities in growing markets, both at home and abroad.
• DR-CAFTA meets these negotiating objectives. Telecommunications services liberalization was a particularly sensitive issue for some DR-CAFTA partners, and U.S. telecommunications companies applaud U.S. negotiators for achieving these objectives in DR-CAFTA.

Telecommunications providers endorse DR-CAFTA.

• Congressional approval of DR-CAFTA will promote economic growth in these developing countries, with appropriate links to new growth by U.S. telecommunications services providers.
• DR-CAFTA breaks new ground in commitments for these sectors from DR-CAFTA partners and thus is an important building block in the 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.
• DR-CAFTA demonstrates to developing countries, in particular, that liberalization of sensitive industries is possible and mutually beneficial.
• DR-CAFTA incorporates provisions that were difficult for some parties to make. The fact that those provisions are part of this agreement sets an important precedent for ongoing trade negotiations with other developing countries with similar telecommunications sector concerns. The commitments demonstrate the parties’ determination to put the futures of their economies ahead of outdated development paths.