Implications of DR-CAFTA for the Dominican Republic

Implications of DR-CAFTA for the Dominican Republic

Luis R. Pellerano P.Pellerano & Herrera

Lex MundiCaribbean/Latin America Regional Conference

San Jose, Costa RicaMarch 3, 2006

Implications of DR-CAFTA for the Dominican Republic

Implications of DR-CAFTA for the Dominican Republic

• Agenda

– Meaning of DR – USA Relationship. Local Situation• Statistics• DR Political and Macro Economic Situation

– What Are The Implications Of DR CAFTA• Hello !!!, We Are Not Home Yet• Changes To Legislation • Local Elections of Congress and Municipalities• Hot Topics

– Dealership Law No.173– Supposed Lack Protection Local Agricultural Products

• For the Legal Profession

– In Conclusion…

Meaning of DR – USA RelationshipMeaning of DR – USA Relationship

• Statistics

– Population 9 million– Bilateral Trade US/DR $9.3 billion (est)– Total Imports $7.9 billion (est)– Imports from US $4.7 billion (est)– US Imports Market Share 59%

DR is the 7th Largest market in the entire Western Hemisphere for US exports, after Canada, Mexico, Brazil, Venezuela, Colombia and Chile. The DR is also the largest market of the CAFTA-DR countries

Meaning of DR – US… Local SituationMeaning of DR – US… Local Situation

• DR Political and Macro Economic Situation

– Administration No Control of Congress. Election are coming in May but …may not bring much change

– Election Year Means:• Everything Is Political

• Little Activity Until New Congress Inaugurates In The Fall

– DR had ´03 and ´04 major financial crisis. Largest ever in proportion to GDP

Meaning of DR – US… Local Situation

Meaning of DR – US… Local Situation

• DR Political and Macro Economic Situation

– Since Fall ´04 President Fernandez is Back in Power

– IMF Agreement in Place. DR Exceeded Almost All Targets But Power Industry

– On The Road To Recovery. GPD ´06 9%. Top Three In The World. Inflation 7.44%

What are the Implications of DR CAFTAWhat are the Implications of DR CAFTA

• Hello !!!, We Are Not Home Yet !

Official Statement:

“Both governments are working toward an implementation of the agreement as soon as possible”

However, informally ….

Politics and Extent of Legislative Changes will …

Bottom Line: Unlikely will be in July 1st,2006

What are the Implications of DR CAFTAWhat are the Implications of DR CAFTA

• Changes to Legislation

– Several pieces of legislation has to be amended. Some before, some after. Some are regulations

– AMCHAM Draft

– Not necessarily legally required but needed politically for certainty in interpretation by local courts of agreed terms under the treaty

What are the Implications of DR CAFTAWhat are the Implications of DR CAFTA

• Changes to Legislation

– Several pieces of legislation has to be amended. Some before, some after. Some are regulations

– AMCHAM Draft

– Not necessarily legally required but needed politically for certainty in interpretation by local courts of agreed terms under the treaty

What are the Implications of DR CAFTAWhat are the Implications of DR CAFTA

• Local Elections of Congress and Municipalities

– Will Take Place May 16th

– New Congress Inaugurates August 16th

– It Is Expected Administration Will Increase Participation But Never Control

What are the Implications of DR CAFTAWhat are the Implications of DR CAFTA

• Hot Topics

– Dealership Law No.176

– Supposed Lack Protection Local Agricultural Products

What are the Implications of DR CAFTAWhat are the Implications of DR CAFTA

• For the Legal Profession

– Foreign Lawyers Are Subject to Limitations Imposed by Law. Need be Dominican to Practice

– Foreign Lawyers can Render Advice on Laws of its Own Country, Provided Admitted in Said Jurisdiction

In Conclusion…In Conclusion…

• DR CAFTA will happen for the DR. Opposition Is Limited

• Sorry, We Will Not Run As Fast As El Salvador

• Lots of Opportunities Will Open

– Sale of US Products. US Consumer Goods 70% Market Share

– M&A are Already Happening Everywhere

– Industrial Opportunities. Ethanol, And…

– Eventually More Work for Lawyers

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