DOING BUSINESS INTHE DOMINICAN REPUBLIC52Dur<strong>in</strong>g <strong>the</strong> months that Central America had been negotiat<strong>in</strong>g <strong>the</strong> FTA, <strong>the</strong>Government of <strong>the</strong> Dom<strong>in</strong>ican <strong>Republic</strong> started to get close to <strong>the</strong> relevant authoritiesof <strong>the</strong> United States <strong>in</strong> order to achieve that <strong>the</strong> country be <strong>in</strong>cluded <strong>in</strong> this agreement.In this manner, after hav<strong>in</strong>g <strong>in</strong>itiated talks <strong>in</strong> 2003 and several negotiation rounds,an agreement was reached <strong>in</strong> March 2004 for <strong>the</strong> signature of a FTA between <strong>the</strong>Dom<strong>in</strong>ican <strong>Republic</strong> and <strong>the</strong> United States.The objectives of <strong>the</strong> agreement are <strong>the</strong> follow<strong>in</strong>g:1) To promote fair competition with<strong>in</strong> <strong>the</strong> free trade area;2) To significantly raise <strong>in</strong>vestment opportunities with<strong>in</strong> <strong>the</strong> territories of <strong>the</strong> parties;3) To protect and enforce <strong>in</strong> an effective and appropriate manner <strong>in</strong>tellectualproperty rights;4) To create effective procedures for <strong>the</strong> application and enforcement of <strong>the</strong> FTAso as to facilitate its jo<strong>in</strong>t adm<strong>in</strong>istration and <strong>the</strong> solution of controversies; and5) To provide guidel<strong>in</strong>es for bilateral, regional and multilateral cooperation.StructureThe FTA comprises <strong>the</strong> follow<strong>in</strong>g Chapters:1. Initial Provisions2. General Def<strong>in</strong>itions3. National Treatment and Market Access4. Rules of Orig<strong>in</strong> and Procedures of Orig<strong>in</strong>5. Customs Adm<strong>in</strong>istration and Trade Promotion6. Sanitary and Phitosanitary Measures7. Technical Obstacles to Trade8. Trade Protection (Safeguards,Anti-Dump<strong>in</strong>g)9. Government Contracts10. Investment11. Cross-border Trade <strong>in</strong> Services12. F<strong>in</strong>ancial Services13. Telecommunications14. Electronic Commerce15. Intellectual Property16. Labor17. Environment18. Transparency19. Adm<strong>in</strong>istration of <strong>the</strong> Agreement and Creation of Trade Related Capacities20. Conflict Resolution21. Exceptions22. F<strong>in</strong>al Provisions23. AnnexesIn relation to <strong>the</strong> Chapter on Market Access, it specifies <strong>the</strong> method for <strong>the</strong> reductionof custom and o<strong>the</strong>r duties for both agricultural and <strong>in</strong>dustrial products.Theagreement conta<strong>in</strong>s <strong>the</strong> product lists for each country,where it can be appreciatedhow all of each country's products will be freed from duties.
<strong>Pellerano</strong> & <strong>Herrera</strong>Attorneys at law53As to market access of Dom<strong>in</strong>ican agricultural products, duty reduction has beendivided <strong>in</strong>to 11 stages or “baskets”, which comprise, as applicable, immediateaccess (duty free), or access with<strong>in</strong> 5, 10, 12 and 15 years. Fur<strong>the</strong>rmore, a 20-yearperiodhas been set for sensitive goods (rice, chicken, powder milk and mozzarellacheese).In addition,<strong>in</strong> this sector certa<strong>in</strong> protection mechanisms by way of quotaswere provided, as well as special safeguards for some products.In <strong>the</strong> textile sector, some advantages could be obta<strong>in</strong>ed regard<strong>in</strong>g woven fabricsand knitted fabric.Fur<strong>the</strong>rmore,<strong>the</strong> subject of accumulation was dealt with,so thatfor woven fabrics <strong>the</strong> Dom<strong>in</strong>ican <strong>Republic</strong> may benefit from accumulation <strong>in</strong> relationto Mexico and Canada.The Chapter on Rules of Orig<strong>in</strong> is one of <strong>the</strong> most important of <strong>the</strong> FTA.The agreementprovides <strong>the</strong> m<strong>in</strong>imum transformation requirements that materials have tofulfill to become a f<strong>in</strong>al product of a given country.The Chapter on Investment establishes <strong>the</strong> pr<strong>in</strong>ciple of no discrim<strong>in</strong>ation for<strong>in</strong>vestments and <strong>in</strong>vestors of any of <strong>the</strong> parties <strong>in</strong> relation to <strong>the</strong> nationals of <strong>the</strong>o<strong>the</strong>r party.Fur<strong>the</strong>rmore,<strong>the</strong> best treatment that a country grants to third countrieswill also be granted to <strong>the</strong> o<strong>the</strong>r party and,for <strong>the</strong> United States,<strong>the</strong> best treatmentgranted to any State with<strong>in</strong> <strong>the</strong> Union.In addition,<strong>the</strong> States ma<strong>in</strong>ta<strong>in</strong> <strong>the</strong>ir right of regulation over <strong>in</strong>vestments,provid<strong>in</strong>gthat <strong>in</strong> pr<strong>in</strong>ciple no f<strong>in</strong>ancial damage caused to <strong>in</strong>vestors may be deemed as expropriation.ThisChapter has two important annexes:Annex I, which <strong>in</strong>cludes reserves for discrim<strong>in</strong>atory treatment provided <strong>in</strong>current legislation, andAnnex II, which reserves <strong>the</strong> right to a<strong>do</strong>pt new discrim<strong>in</strong>atory provisions orcontrary to <strong>the</strong> general FTA provisions.The Chapter on Services is also an important sector that deserves particular protection,giventhat our economies are largely services-oriented.Here reserves couldbe made <strong>in</strong> areas such as distribution, maritime and air transport, free zones andaudiovisual services.Fur<strong>the</strong>rmore, <strong>the</strong> Dom<strong>in</strong>ican <strong>Republic</strong> reserved <strong>the</strong> right to put <strong>in</strong> place morerestrictive or discrim<strong>in</strong>atory measures <strong>in</strong> areas such as demarcation of border<strong>in</strong>gland, purchase of public companies, air services, fish<strong>in</strong>g, communication, governmentf<strong>in</strong>ances, social services and m<strong>in</strong>ority-related decisions.An Annex on Professional Services was also approved <strong>in</strong> this Chapter, which seeksto promote <strong>the</strong> mutual recognition of professional licenses.In this regard, ano<strong>the</strong>r important aspect relates to <strong>the</strong> commitments undertakenregard<strong>in</strong>g Law 173, which were <strong>the</strong> follow<strong>in</strong>g:1) They only apply to relations with United States companies;2) There will be no retroactive effect;3) After <strong>the</strong> date of entry <strong>in</strong>to force of <strong>the</strong> agreement, <strong>the</strong> parties may by mutualconsent apply Law 173 to <strong>the</strong>ir contracts; and4) The compensation will be established on a per case basis.The Chapter on Government Contracts provides that public entities shall make