Tuesday, June 29, 2010

Free Trade Tuesday - DR-CAFTA

The Dominican Republic – Central America Free Trade Agreement (DR-CAFTA) is a multilateral agreement between the U.S. and Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Dominican Republic. The agreement is designed to develop economic relations and encourage trade between the parties through the reduction and elimination of tariffs and other barriers to trade. When launched in 2006, DR-CAFTA immediately eliminated tariffs on more than 80 percent of U.S. exports of consumer and industrial products, phasing out the rest over 10 years. DR-CAFTA does not have an expiration date and all duties should be completely phased out by January 1, 2025. The agreement also eliminates the payment of the 0.21% merchandise processing fee for qualifying articles.

The DR-CAFTA uses a methodology similar to NAFTA, CFTA, and AFTA to determine whether a good qualifies for preferential tariff treatment; however, the responsibility for providing information to substantiate the claim is on the importer. A certificate of origin is not required to be presented in order to obtain benefits, unless requested by CBP. The U.S. Commercial Service maintains a sample form, which is similar to the NAFTA Certificate. Click HERE for some interesting CAFTA trade information on exports to and imports from CAFTA countries.

DR-CAFTA - Key Facts
Expiration: N/A
HTS General Note: GN 29
Imported Directly: No additional production allowed. Must stay under Customs control.
De Minimis:
· 10% - Non Textiles (Value)
· 10% - Textiles (Weight)
· Some Exceptions
Origin Criteria:Tariff Shift, RVC - Build-up/Build-down, Accumulation
MPF: Originating Goods Exempt
Countries: El Salvador, Nicaragua, Honduras, Guatemala, Dominican Republic, Costa Rica, United States
Related Regulations: 19 CFR 10. 581

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