free trade agreement question?

yankee · #1 09-05-2005, 02:02 PM

exactly what does that mean I am an textile importer does that mean no more taxes of any kind or comm.exchange fees only costs is just the freight from the u.s. I find that hard to believe ? no hidden taxes or costs anywere? if anyone has a better understanding of this agreement please fill me in. what about to import a new car does that mean no more taxes no surcharges just freight from the u.s.? So that means all cars will be at about comparable to the u.s. in value money wise? so I think it would be wise to buy a car brand new car in jan/06 yes or no?

Chris · #2 09-06-2005, 09:03 PM

yankee, this is not a simple question and I really do not know how to answer it. But I don't think you should buy and import a brand new car in Jan.2006.

windeguy · #3 09-07-2005, 02:16 PM

Simple it is not. I took a look at the text of the DR-CAFTA and it requires a lawyer to interpret the ifs, ands or buts involved. My best guess from what I understood is that autos will have a decreasing duty over several years.

I invite those with expertise in reading such agreements to help us out.

rellosk · #4 09-07-2005, 03:54 PM

From today's DR1 news

Quote:

Deputies ratify DR-CAFTA

The Chamber of Deputies ratified the DR-CAFTA agreement yesterday by a vote of 118-24. The Senate had approved the legislation last 25 August. United States ambassador Hans Hertell visited the deputies to congratulate them on the bill's passage. As a result of the legislative approval, as from January 2006 goods and services from the United States will enter the Dominican Republic 80% duty free. The remaining 20% will gradually be reduced over a specified period of time. The deputies took over eight hours of deliberations before the final vote. As reported in Hoy, the deputies that voted against the bill or who abstained said that the main reason for their negatives was the fact that they felt that the deputies had not fully understood the legislation they were approving. The FTA agreement is comprised of some 2,000 pages of text. Several of the deputies, including Pelegrin Castillo (FNP-National District), said that the legislation did not contain enough guarantees for local producers and should have been sent to a sub-committee for scrutiny.
Overall, the objectives of the DR-CAFTA agreement are the expansion and promotion of commercial ties between the Dominican Republic, the Central American nations and the United States, abolishing trade restrictions, easing frontier barriers for merchandise, and promoting fair trade in a duty free zone. Investment opportunities are another big part of the FTA, which also includes multiple guarantees and incentives for foreign investors.

2000 pages of text sounds like a lot will be open to interpretation. It's going to be very interesting come January 1st.

suarezn · #5 09-07-2005, 06:22 PM

From what I understand (I'm not a lawyer...but I did stay at a Holiday Inn last night), car duties will be phased out immediately...I can already see the already crowded streets in the capital looking like parking lots all the time...instead of just sometimes. For a lot of other products (such as agricultural) duties will be phased out over a certain number of years, which could range from about 5 years to as long as 20 years depending on the type of product.

One thing that is not clear at all to me is what constitute an "American" car (i.e. Could a Honda made in Ohio be imported without paying taxes? How about a PT Cruiser, which is assembled in Toluca, Mexico?). Like someone already said a lot of things will be based on interpretation and "mojadera de mano".

aegap · #6 09-07-2005, 06:31 PM

Remember that DR does not manufacture any car. So what will practically happen is that they will find a way to compensate( read replace the custum taxes with taxes somewhere else directly affecting vehicles sold in the country). I doubt DR-CAFTA will serve to reduce taxes on vehicles.

suarezn · #7 09-07-2005, 06:42 PM

Quote:

Originally Posted by aegap

Remember that DR does not manufacture any car. So what will practically happen is that they will find a way to compensate( read replace the custum taxes with taxes somewhere else directly affecting vehicles sold in the country). I doubt DR-CAFTA will serve to reduce taxes on vehicles.

I wish they had done that. It would seem fair to me that if you bring a vehicle you should pay some taxes, but what they've done instead is replace the custom taxes with taxes that will paid by the general population in the form of a higher sales tax, and others...Once again screwing over the poor that cannot afford to buy one of these imported cars.

HOWMAR · #8 09-07-2005, 06:48 PM

Quote:

Originally Posted by suarezn

From what I understand (I'm not a lawyer...but I did stay at a Holiday Inn last night), car duties will be phased out immediately...I can already see the already crowded streets in the capital looking like parking lots all the time...instead of just sometimes. For a lot of other products (such as agricultural) duties will be phased out over a certain number of years, which could range from about 5 years to as long as 20 years depending on the type of product.

One thing that is not clear at all to me is what constitute an "American" car (i.e. Could a Honda made in Ohio be imported without paying taxes? How about a PT Cruiser, which is assembled in Toluca, Mexico?). Like someone already said a lot of things will be based on interpretation and "mojadera de mano".

Read the following: http://www.ustr.gov/assets/Trade_Agr...le240_3921.pdf
It is 20 pages devoted to determining the country of origin of a product. We may ask a simple question, but complex answers have been negociated in the treaty. From reading the agreement it looks like a Honda from Ohio would qualify, a PT cruiser from Mexico would not. But, if a % of a product line qualifies and a % doesn't, an overall percentage can be opted to reduce the duty on the complete line. This is not a simple yes or no answer.

Chris · #9 09-07-2005, 07:25 PM

And also, car duties will not be phased out over night... Check the Agreement.

rellosk · #10 09-07-2005, 07:33 PM

Quote:

Originally Posted by HOWMAR

Read the following: http://www.ustr.gov/assets/Trade_Agr...le240_3921.pdf
It is 20 pages devoted to determining the country of origin of a product. We may ask a simple question, but complex answers have been negociated in the treaty. From reading the agreement it looks like a Honda from Ohio would qualify, a PT cruiser from Mexico would not. But, if a % of a product line qualifies and a % doesn't, an overall percentage can be opted to reduce the duty on the complete line. This is not a simple yes or no answer.

Thanks for the link. Do you know if the entire document is available online? Back in July someone (possibly you) posted links to other portions of the document.