CAFTA Q&A: Answers from ITA Part 1
Success story: US exports to CAFTA-DR partners have increased 79% through 2012.
Datamyne blog anchor Bill Armbruster recently conducted an e-mail interview with the Commerce Department’s International Trade Administration (ITA). This first installment focuses on US export growth and opportunities.
Bill Armbruster: How successful have the free trade agreements with Central America been?
International Trade Administration: With the implementation of the CAFTA-DR free trade agreement, 80% of US exports of consumer and industrial goods immediately became duty-free in our partners – Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua. Our exports to those countries increased by 79% from 2005, the year before the agreement, to 2012.
Armbruster: What types of exports have shown the greatest success?
ITA: Key US exports that have experienced significant growth to the CAFTA-DR countries include: petroleum products, machinery, electrical/electronic products, textile fabrics, cotton yarns, cereals (wheat, corn, rice), plastics, motor vehicles, paper products, and medical instruments. Last year, US merchandise exports to CAFTA-DR countries alone totaled $30.2 billion. US companies are also benefitting from the recent implementation of the US-Panama Trade Promotion Agreement.
Since most of the countries in Central America are very small and have limited manufacturing, areas demonstrating continuing opportunities for US exporters cross many industry sectors. Among key industry opportunities for US companies in Central America is the automotive sector, which includes automotive parts, accessories, and aftermarket products. There is also a high level of export opportunities in the restaurant equipment sector, with many small restaurants purchasing large and small equipment for their operations.
Armbruster: In general, how much interest has there been among US exporters in Central America?
ITA: Many US exporters choose Central America as a subsequent Latin America market, if their company has already been successful in larger markets, such as Brazil, Mexico and Panama. There is also a clear relationship between exporters based in Florida, Texas and California with Latin America. The majority of inquiries to the International Trade Administration from both new and current exporters come from these three states.
Overall, the number of ITA US Commercial Service export successes to Central America has grown by 51% from Fiscal Year 2008 to Fiscal Year 2012, reflecting an increased interest from US businesses in the region. Export successes are cases in which the exporter notifies us that they have completed a transaction thanks to Commercial Service assistance.
Bill Armbruster, the anchor for the Datamyne Blog has covered shipping and trade for 30 years as a reporter and editor with The Journal of Commerce and Shipping Digest. Read his column CAFTA Cements US Trade Relationship.
The opinions expressed in this article are those of its author and do not purport to reflect the opinions or views or Descartes Datamyne. In addition, this article is for general information purposes only and it’s not intended to provide legal advice or opinions of any kind and my not be used for professional or commercial purposes. No one should act, or refrain from acting, based solely on this article without first seeking appropriate legal or other professional advice.
Date posted: May 29, 2013