Deep trade agreements are an important institutional infrastructure for regional integration. They reduce trading costs and set many of the rules under which economies operate. If made effective, they can improve political cooperation between countries, thereby increasing international trade and investment, economic growth and social prosperity. Research conducted by the World Bank Group shows that: THE DR-CEFTA is much smaller than other regional trade agreements, such as the North American Free Trade Agreement, currently the largest free trade area in the world. It would have been overshadowed by the Transatlantic Trade and Investment Partnership if the negotiations had been concluded and the Trans-Pacific Partnership approved by Congress. Regional trade agreements are increasing in number and are changing in character. Fifty trade agreements were in force in 1990. In 2017, there were more than 280. In many trade agreements today, negotiations go beyond tariffs and cover several policy areas that affect trade and investment in goods and services, including cross-border rules such as competition policy, public procurement rules and intellectual property rights. THE ART covering customs duties and other border measures are “superficial” agreements; THE ADRs covering a wider range of policy areas, both inside and behind the border, are “deep” agreements. The CAFTA-DR trade zone is the third largest U.S.
export market in Latin America after Mexico and Brazil. According to the U.S. Department of Commerce, the DR-CEFTA has benefited U.S. exporters of petroleum products, plastics, paper, and textiles, as well as manufacturers of motor vehicles, machinery, medical devices, and electrical/electronic products. Cotton, wheat, maize and rice producers have also improved their exports. Maliszewska M, Z. Olekseyuk and I. Osorio-Rodarte, March 2018, Economic and distributional impacts of comprehensive and progressive agreement for trans-pacific partnership: the case of Vietnam. Washington, D.C.: World Bank Group. Prior to THE DR-CEFTA, Honduras had a trade surplus in agricultural products. Years after THE DR-CEFTA, it had experienced a trade deficit.
Many farmers took jobs at U.S. garment factories that moved to their countries after THE ALEAC-DR. However, many other factories have moved to China, Vietnam and other low-wage countries. As a result, APPAFC-DR exports to the United States were lower in 2013 than before the trade agreement was signed. Costa Rica has benefited from increased foreign direct investment in the insurance and telecommunications sectors, which the Government has recently opened to private investors. These products include fruit, coffee and other foods, as well as electronic components and medical equipment. When CAFTA-DR was introduced, the Costa Rican government partially privatized the banking, telecommunications, and insurance sectors, which helped boost economic growth. .