The CARICOM-Dominican Republic Free Trade Agreement

THE CARICOM- DOMINICAN REPUBLIC FREE TRADE AGREEMENT Ministry of Foreign Affairs & International Cooperation Takuba Lodge 254 South Road & Shiv Chanderpaul Drive Tel: 226-1606-8 ext. 244 www.minfor.gov.gy

BASIC FACTS The CARICOM/Dominican Republic Free Trade Agreement was signed on August 22, 1998. A Protocol Implementing the Agreement was signed on April 28, 2000. An Instrument of Provisional Application to give effect to the Agreement was subsequently signed on December 1, 2001, thereby providing for the entry into force of the Agreement between those Parties which have completed the ratification process. The Dominican Republic and Guyana ratified the Agreement on February 5, 2002 and March 19, 2004, thereby entering the Agreement into force between the two countries.

CARICOM- Dominican Republic Free Trade Agreement Status: Active Signed: August 22, 1998 In force: October 6, 2004 Agreement type: Free trade agreement covering goods Country grouping: Regional- Member States of CARICOM and the Dominican Republic

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WHAT IS COVERED IN THE AGREEMENT? The purpose of the Agreement is to enhance the levels of cooperation and to promote economic development through trade liberalization and increased competitiveness. The main themes of the Agreement are Liberalization on

the basis of national export interests, Reciprocity, Special treatment for CARICOM Least Developed Countries (LDCs), and Most Favoured Nation (MFN). It specifically recognizes and offers protection to those products which may be considered as sensitive to the Parties. Essentially, the Agreement has provisions for market access for Trade in Goods, Trade in Services, Rules of Origin, Technical barriers to Trade, Sanitary and Phyto-sanitary (SPS) Measures, Economic Cooperation, Government Procurement, Intellectual Property Rights Settlement of Disputes, Temporary Entry of Business Persons and Reciprocal Promotion and Protection of Investments. The Agreement also discourages anti-competitive business practices and allows for countries to apply corrective measures where injury has been created due to evidence of dumping or the use of subsidies. In addition, the discriminatory treatment with respect to the application of standards to like goods or services is discouraged and the use of international standards is encouraged.

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MARKET ACCESS PROVISIONS

The Agreement grants CARICOM exporters access to the Dominican Republic market, which is in excess of eight (8) million consumers. It provides for duty free access for approximately 85% of all goods traded between the Parties. The Product Lists are contained in the Protocol Implementing

the CARICOM/Dominican Republic Free Trade Agreement and includes: •

ATTACHMENT I: Goods which shall be Subject to Phased

Reduction of the Most Favoured Nation (MFN Rate of Duty) – Coffee; Biscuits (sweetened/unsweetened); Jams and Fruit Jellies; Passion Fruit Juice; Pasta; Soups and Broths; Rum; Sausages; Essential Oils; Perfumes and Toilet Waters; Mattresses; Paper/Paperboard Crates and Boxes, etc.

•

ATTACHMENT II: Goods which shall be subject to Most Favoured

Nation

(MFN)

Rate

of

Coconuts;

Rice;

Garlic;

Milk

Coconuts;

Cane

or

beet

Duty and

Sugar;

– Cream;

Meat; Wheat

Animal/Vegetable

Fish;

Beans;

Flour;

Beans;

Fats

and

Oils;

Pepper Sauce; Natural/Artificial Waters; Beer; Tobacco; Cigarettes; Portland Cement

and

Cement

Clinkers;

Paints

and

Varnishes;

Soap

and

organic surface Agents; Disinfectant; Iron/Steel Bars and Rods, etc.

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MARKET ACCESS PROVISIONS

•

ATTACHMENT V:

List and Schedules of Selected Agricultural Products which shall be Subject to Special Trade Arrangements – Ochro, Pumpkin; Tomato; Onion; Cabbage; Potato; Cassava; Yam; Pineapple; Citrus Fruit; Carrot; etc.

A point to note is that with respect to the application of the Agreement, the phasing-out period for the goods covered under Attachment I has elapsed, meaning that the goods are subject to duty free treatment. However, the CARICOM LDCs are not required to grant reciprocal duty free treatment to goods originating in the Dominican Republic and exported to those countries and will therefore attract the MFN rate of Duty. This is because of the special treatment accorded to those countries under the Agreement.

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TRADE FACILITATION UNDER THE AGREEMENT In terms of Rules of Origin, a Certificate of Origin with a Declaration by exporters must be certified by the Competent Authorities in each exporting country which is a Party to the Agreement and must accompany each shipment of goods. Exporters are also required to maintain records related to Certificates of Origin for a period of three (3) years from the date of the Certificate. For goods with a value expressed in the national currency of the Parties under the equivalent of US$1,000, a Certificate of Origin is not required. Instead, an Invoice with a signed Declaration that the goods were produced in the territory of any of the Parties will be accepted.

Detailed provisions are made to address technical barriers to trade (TBT) and sanitary and phytosanitary (SPS) measures including; discouraging discriminatory treatment with respect to the application of standards to like goods or services; and encouraging the use of international standards.

PROVISIONS FOR TRADE IN SERVICES The agreement has a built-in agenda that caters for further deepening of the agreement to address market access for services. In article III of appendix II reference is made to –measures that affect the sale, market and production of a services; as well as commercial presence, excluded measures provided by a state enterprise, air services and services of government functions such as public education and social security, among other factors.

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GUYANA’S TRADE PERFORMANCE AND OPPORTUNITIES UNDER THE AGREEMENT

General Trade Trends with the Dominican Republic Guyana’s

trade

with

the

Dominican

Republic

has

been

generally low. Average exports over the period 2015 to 2019 was equivalent to US$7,409 (000) while average imports was equivalent to US$13,277 (000). Guyana has therefore generally maintained a balance of trade deficit with the Dominican Republic.

Figure 1 below provides additional details on Guyana’s general trade patters with the Dominican Republic over the period 2015 to 2019.

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GUYANA’S TRADE PERFORMANCE AND OPPORTUNITIES UNDER THE AGREEMENT Fruits account for about 86% of total exports under the agreement with the main export product being dried coconuts (HS 0801). Over the period under review, Guyana exported an annual average of US$5,705 (000) worth of dried coconut to the DR and US$7,282 (000) to the world market. The Dominican Republic therefore accounted for 78% of Guyana’s total exports of dried coconuts. The Dominican Republic imported on average US$8,203 (000) from the world market, which suggests that over 50 % of the Dominican Republic imports of dried coconuts come from Guyana. It is important to note that dried coconuts are not traded preferentially under the CARICOM- Dominican Republic Free Trade Agreement. In light of the trade trends however, the agreement would be more beneficial for Guyana if this product (dried coconuts) and other products with strong domestic productive capacity, such as rice, attract lower duties, in line with the terms of the agreement. The Ministry will give consideration to renegotiating the terms of the agreement to include these products. Overall, Guyana’s rate of utilization of the preferential access provided by the agreement is less than 1%. However, there may be opportunities that may emanate from the oil and gas sector and from the current products listed under the various regimes for which the Dominican Republic has strong import demand (see below for opportunities under current product lists).

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OPPORTUNITIES UNDER CURRENT PRODUCT LISTS Under attachment 1, which refers to goods that were subject to a phased reduction of the MFN rate of duty, there was almost no export activity for Guyana during the period 2015 to 2019 except for passion fruit juice, jams, pasta, biscuits and rum which were exported in very small values with rum being the main export product valued at US$17.4 (000). However, given the size of the Dominican Republic in terms of value of total imports from the world, the table below shows the top five products for which the country has strong import demand and for which there is some productive capacity in Guyana. These are products for which Guyana may be able to viably export to the Dominican Republic with the enhancement in its productive capacity.

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OPPORTUNITIES UNDER CURRENT PRODUCT LISTS Under Attachment II, which refers to goods which shall be subject to the MFN rate of duty, over the period 2015- 2019, the following were the key products exported from Guyana to the Dominican Republic: o

Fish, fresh or chilled, excluding fish fillets and other fish meat of

Heading No. (HS 0302), an average of US$ 177.2 (000) was exported. o

Fish, frozen, excluding fish fillets and other fish meat of Heading No.

(HS 0303), an average of US$164.8 (000) was exported. o

Animal or vegetable fats and oils and their cleavage products; prepared

edible fats; animal or vegetable waxes (HS 1517), an average of US$17.8 (000) was exported. o

Cane or beet sugar, and chemically pure sucrose in solid form (HS

1701), an average of US$63.6 (000) was exported.

Most of the products under this list are fairly large import markets for the Dominican Republic, considerably larger than Guyana’s total exports to the world market. For instance, fresh and frozen fish and cane sugar are two of Guyana’s largest export products that constitute very small exports to the Dominican Republic. As an example, just about 1% of Guyana’s exports of frozen fish over the period 2015 to 2019 went to the Dominican Republic market and 0.07% of cane sugar.

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OPPORTUNITIES UNDER CURRENT PRODUCT LISTS The table below shows the top five products with strong import demand in the Dominican Republic and with some productive and export capacity in Guyana. These are products for which Guyana may be able to viably export to the Dominican Republic with the enhancement in its productive capacity.

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TRAVELIING TO THE DOMINICAN REPUBLIC TO DO BUSINESS The agreement provides for easy movement of business people for the purpose of conducting business. However, entrepreneurs must provide evidence that a business connection was made and present proof of citizenship.

CONSULTATIVE MECHANISM UNDER THE AGREEMENT The Parties agreed to establish a Joint Council to primarily monitor the implementation of the Agreement, its Annexes and Appendices. The Joint Council is tasked with other roles such as resolving disputes establishing Committees

and and

delegating Working

responsibilities

Groups

or

Expert

to

Standing

Groups.

The

Council shall convene in Ordinary Sessions at least once per year and in Extraordinary Sessions as is necessary as agreed between the Parties.

For the full text of the agreement, please Click Here Foreign Trade Information System (SICE), Organisation of American States (OAS)

For more information please contact Ministry of Foreign Affairs & International Cooperation Takuba Lodge 254 South Road & Shiv Chanderpaul Drive Tel: 226-1606-8 ext. 244 www.minfor.gov.gy

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