Monday, April 03, 2006

CAFTA's first month

On April 1, El Salvador completed its first month under CAFTA and the treaty took effect for Honduras and Nicaragua. This leaves Guatemala and the Dominican Republic still to pass revisions to their laws for compliance with the treaty, and Costa Rica which has not yet ratified the treaty.

The Salvadoran government has made optimistic statements about the impact of CAFTA's first month. As reported in La Prensa, although there were some problems with US customs as authorities got used to the new regime, there are expressions of interest both in new investment in El Salvador and businesses looking to export to the US.

Obviously one month is too early to start judging the impact of CAFTA. Some of the things to watch will be:

  • Do subsidized US agricultural products increase in shipments to El Salvador?
  • Are there offsetting increases of Salvadoran agricultural exports to the US?
  • Does CAFTA impact the loss of textile jobs to China?
  • Does foreign investment increase in El Salvador, and is the investment in job-creating industries?

1 comment:

Dylan said...

I think another interesting thing to watch for -- other than the ones listed -- is the impact on the informal sector.