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TRADE POLICY REVIEW: DOMINICAN REPUBLIC
7 and 9 October 2002

Concluding remarks by the Chairperson

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See also:
Press release: Fast economic growth driven by efforts to modernize economy


This second Trade Policy Review of the Dominican Republic has been both thorough and very informative. We owe this in some considerable measure to the presence of a large Dominican delegation, led by Minister Dr. Hugo Tolentino Dipp and Vice-Minister Santiago Tejada, and, as well, to the active involvement of many Members. Through our dialogue with the Dominican delegation, we have obtained a better understanding of the trade-related policies and practices in place, of changes affecting them over the last six years, and of their possible future evolution. At the outset allow me to highlight also the support of Members for the Dominican Republic's modernization and liberalization efforts, and their acknowledgement of the considerable progress made in this respect since the Dominican Republic's last Review in 1996.

Members complimented the Dominican Republic, the largest economy in the Central American-Caribbean region, on the remarkable economic growth it has achieved in recent years. This, and its deeper integration in the world economy, has made the Dominican Republic an increasingly important economic partner. However, growth has slowed considerably since 2001, the export base continues to be narrow, both in terms of markets and products, and poverty alleviation remains a challenge. It was thus important to learn of ongoing efforts to address these issues.

The various autonomous, regional and multilateral initiatives the Dominican Republic has taken to liberalize its trade and investment regimes have been key elements in its good economic performance. Members welcomed the Dominican Republic's active participation in the multilateral trading system, and obtained further information on the status and scope of ongoing initiatives to conclude new bilateral trade agreements. They expressed their hope that the Dominican Republic would continue to strive for these initiatives to complement multilateral liberalization efforts. Also noted was the great importance for Dominican exports of unilateral preferences offered by certain trading partners.

Members agreed that the Free Trade Zone, or FTZ, regime has played an important role in promoting exports, but also pointed to the structural distortions the regime had created, and which may undermine future growth prospects. Moreover, the subsidies implicit in the FTZ regime have called into question its compatibility with multilateral principles, and a transition period is in place for its eventual removal. Given this and the regime's major economic importance, Members posed numerous questions on this subject, including on the strategies being considered to permit the economy to move to a more neutral system. The Dominican Republic undertook to use the transition period to bring the FTZ regime in line with the relevant WTO rules.

Members took note of the steps taken by the Dominican Republic to both lower and simplify the structure of applied tariffs. However, they also observed that applied and bound tariffs on agricultural products were particularly high, and asked questions about the use of tariff quotas. Several Members considered it necessary to enhance predictability by closing the current wide gap between applied and bound tariffs.

Numerous questions were posed on customs procedures and valuation, licensing and trade facilitation, with Members welcoming the progress made in these areas, but urging the Dominican Republic to effect further improvements. A number of Members were concerned about the consistency with multilateral principles of a specific tax on alcoholic beverages. Several Members requested information on the development of standards and technical regulations. It was also observed that the Dominican Republic has yet to fulfil various notification obligations under certain WTO Agreements, notably the TBT Agreement, and invited it to seek assistance from the WTO Secretariat if necessary to address this issue and, thus, enhance transparency. I was happy to hear that the Dominican Republic was ready to do so.

A number of Members welcomed the consideration the Dominican Republic is giving to acceding to the plurilateral Agreement on Government Procurement, and wished to learn how the Dominican Republic would reconcile its participation with the requirement in its domestic legislation that preference be given to Dominican suppliers. Several Members also requested information on public bidding procedures, including registration requirements.

On sectoral policies, developments in the services sector attracted particular attention. Members took note of the liberalization measure taken over the last six years but noted that Dominican commitments under the GATS were relatively limited and fell short of the actual openness in the sector. Thus, to enhance predictability, several of them invited the Dominican Republic to expand and deepen its multilateral commitments during the current services negotiations. They also requested information on the status of ratification by the Dominican Republic of the Fifth Protocol to the GATS, which the delegation noted was currently being considered by the National Congress. Some Members also expressed concern about the costs of financial services and inefficiencies in the electricity sector.

Members also sought further clarification on a number of specific areas, including:

  • the foreign investment regime and exceptions to national treatment;

  • SPS measures;

  • competition policy and related legislation;

  • the draft Monetary and Financial Law; and

  • the protection of intellectual property rights.

The Dominican delegation gave written and oral replies to questions posed during the Review. The replies provided have made a major contribution to this meeting, and were clearly appreciated by Members.

This brings us to the conclusion of our Review of the Dominican Republic. Through it, we have gained a first-hand appreciation of the Dominican Republic's achievements since its last Review in 1996, and of the challenges that lie ahead. The Dominican Republic has indeed achieved much in recent years, in good part building on the opportunities created by an increasingly liberal trade and investment regime. But as the Dominican economy matures, new avenues may have to be found to sustain economic growth and social development. I believe that, as a developing country highly integrated in the world economy, this will require efforts in both the domestic and international arenas. In this respect, we all welcomed the Dominican Republic's stated conviction that liberalization is a central pillar of economic growth and development. This conviction bodes well for Dominican Republic's continued and constructive involvement in efforts to strengthen the multilateral trading system, from which I am convinced it has much to gain.