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Sunday, October 23, 2005

Ambassador touts new trade agreement
Central American markets will open, Costa Rican official says

By Jeff McKinney
Enquirer staff writer
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F. Tomas Duenas


The United States will become a much stronger partner in trade, investment and development with Central American countries when a trade agreement goes into effect.

That will be the word that F. Tomas Duenas, Costa Rica's ambassador to the United States, will deliver as the keynote speaker Thursday at the Hispanic Chamber of Commerce of Greater Cincinnati's Annual Dinner Gala at the Millennium Hotel downtown.

Duenas will focus on new opportunities available for U.S. companies and investors in Costa Rica and other countries in that region when the Dominican Republic-Central America Free Trade Agreement, known as DR-CAFTA, is ratified.

The agreement, which goes into effect in January, will break down trade barriers among the United States, the Dominican Republic, Nicaragua, Honduras, El Salvador, Guatemala and Costa Rica.

Kimberly Elliott, a research fellow at the Institute for International Economics, a Washington-based independent research institute, said DR-CAFTA will be positive but not wide ranging for the U.S. economy.

Among the benefits:

It will become cheaper and easier for U.S. companies to sell goods in those countries by slowly phasing out tariffs.

U.S. agricultural exporters, who typically face among the highest tariffs to ship goods into DR-CAFTA countries, will see those duties eliminated.

U.S. service providers such as insurance and telecommunications companies will gain increased access to those markets.

"For particular U.S. companies that export to the region the gain could be big," Elliott said. "But for the U.S. economy overall, it will not be noticed because trade between the U.S. and the region is just too small."

Alfonso Cornejo, president of the Hispanic Chamber of Commerce, said he expects DR-CAFTA to boost the chamber's membership by adding another 10 to 15 new businesses a year

after the agreement takes effect.

He said that increase will come as Hispanic-owned companies from Greater Cincinnati and Northern Kentucky engage in new commercial relationships with exporters and businesses.

Duenas said Costa Rica is already the largest trading partner of the United States from the Central American region, with U.S. companies sending about $4 billion to $5 billion in products a year to that country.

And he said DR-CAFTA will make it less costly and easier for U.S. companies - including those from Greater Cincinnati and Northern Kentucky - to ship products there.

Duenas said the potential for new investment in the Central American region is several billion dollars a year.

"Costa Rica alone will have $1 billion to $2 billion in new investment opportunities for U.S. companies with the agreement," Duenas said.

He said there are great opportunities for investment in such areas as high technology, medical devices, customer call and business centers and tourism. He said construction and development of residential and commercial properties as well as civil infrastructure such as ports, bridges and roads are also needed.

Duenas said the agreement should increase trading opportunities for Ohio and Kentucky companies.

Duenas said Ohio exported $200 million in goods to Central America in 2004, almost double the amount from 2001. Kentucky exported $154.4 million in goods to Central America last year, up 41.8 percent from 2001, said Mandy Lambert, a spokeswoman for the Kentucky Cabinet for Economic Development.

E-mail jmckinney@enquirer.com