… Trump officials are taking a very close look at the 2005 pact signed with six Latin American nations to see if they can block Nicaragua, the Dominican Republic and El Salvador from keeping preferential access to U.S. markets without disturbing the rest of the agreement…
After NAFTA fight, Trump threatens another trade battle with Central America
By Franco Ordoñez, The News Tribune (WA)
January 08, 2019
Now that the Trump administration has revamped the North American Free Trade Agreement, it is taking a look at kicking key countries out of its sister pact, the Central American Free Trade Agreement.
Trump officials are taking a very close look at the 2005 pact signed with six Latin American nations to see if they can block Nicaragua, the Dominican Republic and El Salvador from keeping preferential access to U.S. markets without disturbing the rest of the agreement.
“We are very concerned with Nicaragua’s move toward authoritarianism, and El Salvador’s and Dominican Republic’s questionable ties with China,” the official said. “As the United States has made clear, we will not allow our trade agreements, including CAFTA-DR, to become back doors to benefit non-market economies and repressive actors in the region.”
Eliminating the three countries from CAFTA or CAFTA-DR, as it’s best known, would not necessarily block them from selling goods to the United States, but they would be subject to higher tariffs that were in place before the 2005 agreement was signed.
The fact that the United States is turning its sights on the Central America agreement is not necessarily a surprise. Since President Donald Trump announced plans to rework NAFTA, leaders across the Western hemisphere expected the administration would eventually turn its attention to their agreements and apply similar changes. NAFTA served as a template to the rest of the 11 free trade agreements in Latin America.
Nicaragua, El Salvador and the Dominican Republic are also countries that have found themselves recently in Trump’s crosshairs.
The Trump administration has been slapping sanctions and increasing economic and political pressure in Nicaragua as the Ortega government has increased its authoritarian power. The administration pulled its ambassadors out of El Salvador and the Dominican Republic last year after the two countries broke diplomatic ties with Taiwan to get closer with China, a U.S. trade adversary that the administration has accused of a “predatory economic activity.”
CAFTA was never just about trade...
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