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The U.S.-Dominican Republic-Central America Free Trade Agreement (DR-CAFTA) will help America clean up its own neighborhood, said Salvador Stadthagen, Nicaragua's ambassador to the United States, during Georgia Tech's Global Business Forum on April 5.
"We live in the same neighborhood," said Stadthagen, the forum's lunchtime keynote speaker, explaining that the entire community suffers from a "rotting house next door," where dire straits lead to narco trafficking and other crime.
By opening the doors for trade, the United States will do much to improve the lot of its neighbors like Nicaragua, where the current income per capita is only one-thirtieth of that in America, Stadthagen said.
The 12th annual Global Business Forum, organized by the Georgia Tech Center for International Business Education and Research (GT CIBER) and presented by United Parcel Service, featured experts, business leaders, and government officials discussing topics relevant to those seeking business opportunities in DR-CAFTA nations: Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua.
"DR-CAFTA eliminates virtually all tariff barriers in a $33 billion trade market," said John McIntyre, executive director of GT CIBER. "Countless new business opportunities will arise from this agreement."
While 80 percent of Central American and Dominican products have entered the U.S. market duty free, U.S. exports to the DR-CAFTA countries have faced substantial tariffs. President Bush signed the proclamation to begin implementing DR-CAFTA February 28.
"DR-CAFTA is a way to support freedom, democracy, and economic reform in our own neighborhood," said John Andersen, director of the U.S. Department of Commerce's Office of Latin America and the Caribbean, who was the forum's morning keynote speaker.
"It really is a significant market," Andersen said, noting that America already exports $15.7 billion in products to Central America and the Dominican Republic � more than the United States sells to India, Indonesia, and Russia combined.
Exports support twelve million American jobs, which pay 13 to 18 percent more than the average position, said Andersen, who highlighted the success of the North American Free Trade Agreement between Canada, Mexico, and the United States. He said that America will continue to forge free-trade agreements with countries in the Western hemisphere, a $13 trillion market with 800 million people. The United States is now negotiating with Panama, which the other Central American countries elected not to include in DR-CAFTA.
"Central America is one of the few areas in the world where the U.S. has a trade surplus ($1.2 billion)," said Nicaragua 's Stadthagen. "We are raised on American products."
One out of every eight Central Americans lives in the United States, and the $8 billion a year in remittances they send home enable their countrymen to buy a lot of U.S. products and produce a lot of American jobs, he said. Central America's booming tourism industry will enable its residents to buy even more U.S. goods, he added.
U.S. businesses should consider opening more production operations in Central America, even though labor costs more there than it does in Asia, Stadthagen said. "U.S. companies need a base of production in our hemisphere," he explained. "We are in a position to deliver quickly." Products manufactured in Central America also use more U.S.-made materials than those from Asia, he noted.
Co-organizers of the forum, held at Georgia Tech Research Institute's conference center, included the Georgia Department of Economic Development, U.S. Export Assistance Center, SunBelt Network, Georgia Hispanic Chamber of Commerce, Hemisphere Inc., and U.N. CIFAL Center for the Americas/Atlanta. Sponsors include McKenna Long & Aldridge LLP and Merial Ltd. The U.S. National Centers of Excellence in International Business also provided support.
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