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CAFTA Trade Relations between the US and Central America

Updated on January 30, 2012

There has been a lot of talk among politicians of relations between the US and Central America. The most prominent being that of the trade relations. There has been a constant struggle in many countries like El Salvador, Nicaragua and Honduras, for example. To help lift people above the poverty line but they are resistant to the CAFTA program because they do not want to be indebted t o the US for these economic gains. The ones who have signed and ratified the agreement have had mutual and beneficial success in trade relations with the US.

The Benefits of CAFTA

Since the introduction, of the North American free trade agreement instituted by President Clinton there have been a number of changes by participating countries and the United States. These changes were further introduced with all the Central American countries ratified it again before finalizing it in 2003 during the bush administration. The agreement allowed trade and products within the following countries and the U.S.

•Costa Rica - Costa Rica imports bananas, coffee, sugar and cocoa.

•The Dominican Republic – Exports designer clothes

•El Salvador – Coffee, sugar, paper and clothes

•Guatemala – Coffee, bananas, Clothes

•Honduras - Coffee, fruits, nuts, Clothes

•Nicaragua – Coffee, shellfish.

The main function of the CAFTA or Central American free trade agreement is that any nation that trades with the US or each other that no tariffs on goods would be allowed. Most of the imports come in from Florida as the main source or California.

The Challenges

It is suggested that the American companies are going into these Central American nations that establish branches there are still in the process of helping these countries prosper. Yet, it has been questioned whether or not the cost of living that these companies re providing are truly helping everyone in those countries. Other concerns are worries about large pharmacy companies taking advantage of less strict drug control processing. Others have suggested that the influx of American goods at cheaper prices has a dramatic influence on the local business. I believe all these points are true, and proper management and oversight should be done to prevent them from being unregulated. So, with the proper implementation and companies respecting the laws of the program the benefits to all countries involved can be enormous.


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