A Study of the Environmental Issues Associated with the Dominican RepublicCentral American Free Trade Agreement (DR-CAFTA)

Abstract

The Dominican Republic-Central American Free Trade Agreement (DR-CAFTA) with the United States was passed on July 28, 2005. The main goal of DR-CAFTA is to create a free trade zone for economic development. The Agreement is highly controversial with many contentious issues including concern about the environment, which is the focus of this study. The concern is that the environmental objectives are expected to be subservient to trade and other economic incentives which will lead to further deterioration of the environment in countries where the environmental standards are already low. The effects on the U.S. environment are expected to be minimal. However, it is feared that the U.S. manufacturing facilities may relocate to Central American countries to take advantage of low wages and low environmental requirements, which may result in loss of jobs and capital investment in the U.S. However, overall DR-CAFTA is expected to be beneficial in many ways, including an increase in trade and economic growth in all participating countries.