Central America, Trump and CAFTA

In the view of Fitch Ratings, the likelihood of the trade agreement being renegotiated is low, but the region faces challenges "if US protectionism gains traction over the next few years."

Wednesday, May 17, 2017

From a statement issued by Fitch Ratings:

Fitch Ratings - New York - (May 16, 2017): While Central America and the Dominican Republic could benefit from the expected economic acceleration in the United States, these countries could also face challenges if US protectionism were to gain traction in the coming years, says Fitch Ratings.

DR-CAFTA's small, low-income economies are intimately linked to the United States through trade channels, foreign direct investment, and worker remittances. Fitch's base scenario assumes that economic activity in the United States will continue to support the region during the current rating horizon, but that the change in policy priorities in that country has tilted the risks downward.



More on this topic

U.S. Wants to Take Advantage of FTAs ​​with Latin America

January 2014

The Ministry of Commerce has launched its "Look South" initiative so that U.S. companies can reap the benefits of the trade agreements that have been signed.

The Central American countries are part of the eleven Latin American economies with which the U.S. has trade agreements in force, and are those which - along with Mexico, with whom already has strong trade ties- because of their geographical position, be of interest to U.S.

U.S. - Central America and Obama's Visit

April 2013

Since the entry into force in 2006 of the DR-CAFTA, the tip in favor of the U.S. in the trade balance has multiplied by 5.

"The Central America to which President Barack Obama is coming to visit on on Friday is a region that maintains multiple communication vessels with the United States, including a growing trade relationship which in 2012 amounted to $40 billion, although very much in favor of the American power," reported Prensa.com.

Risks for the Apparel Maquila in Central America

April 2009

A regional industry at risk: You can now add the reduction of US imports to the elimination of the Multi-fiber Agreement of a few years ago.

The apparel maquila is confronting a new challenge. The US recession has caused a contraction in clothing sales and hence a reduction in imports.

Trade with US up by 20 percent in two years of Cafta

July 2008

Trade in some of the countries involved has grown by 20 percent since the introduction two years ago of the Cafta accord between the United States and Central America and the Dominican Republic, according to US Department of Trade figures.

The Cafta countries – excluding Costa Rica, which las a latecomer to the pact – by the end of last year had registered exports of US18.75 billion to the United States, while recording imports of close on US$22.41 billion.

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