CAFTA-DR (Central America-Dominican Republic) Free Trade Agreement with U.S.: Growing in Importance to Miami-Dade Economy
The countries comprising the U.S. Free Trade Agreement with Central America and the Dominican Republic (CAFTA-DR) have been growing faster than the average growth rate of South American nations since 2014. Table 1 below highlights the differences in economic growth between CAFTA-DR countries and the average for South America.
The Dominican Republic and Nicaragua have been consistently leading economic expansion, and the forecast for this year suggests that both will maintain the leadership in growth among CAFTA-DR countries. Costa Rica is also growing at a solid rate. Based on strong and steady growth rates since 2013, most of these economies offer growing business opportunities for the South Florida Region and for Miami-Dade specifically.
The Free Trade Agreement between the U.S. and the Dominican Republic-Central America also lowers trade barriers, thus offering a common set of trade and investment rules. This facilitates business expansion for Miami-Dade firms. It is also a relatively large and integrated market for Florida and Miami-Dade firms. Table 2 on the next page shows the relatively large importance of CAFTA-DR as a combined marketplace for Miami-Dade products and services.
South Florida exports to CAFTA-DR countries have grown unevenly between 2013 and 2016, depending on the country in question. Strong export growth during this period include Dominican Republic, Costa Rica and Nicaragua. However, El Salvador, Guatemala and Honduras have registered declines in the mentioned years, especially El Salvador due to slow economic growth. This is presented in Table 3 below.
In conclusion, as an integrated marketplace with the U.S., the CAFTA-DR countries offer growing opportunities for Miami-Dade and Florida businesses. Nevertheless, these opportunities appear to be country-specific, based on the performance of each economy.