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Fast economic growth driven by efforts to modernize economy
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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.
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