As part of a political bargain to win support for the Dominican Republic-Central American Free Trade Agreement, the Bush administration has agreed to push for faster reductions in tariffs on plastic product exports to Latin America.
The deal, which is part of a side agreement the administration reached to get Rep. Mark Souder, R-Ind., to support DR-CAFTA, could potentially speed up tariff reductions already called for under the trade pact. President Bush signed it Aug. 2.
But it's not clear what plastic products could be impacted. Industry lobbyists have to present a list of goods they want the U.S. Trade Representative to focus on, and U.S. negotiators would have to offer something to convince potentially reluctant Central American countries to agree to the reductions.
As it stands, the DR-CAFTA trade pact will eliminate Central American tariffs on plastic products over five to 10 years.
The trade pact eliminates tariffs immediately on plastic machinery, molds and resins, where the DR-CAFTA countries don't have their own manufacturing. But because the Central American countries have domestic plastic product industries, they wanted a phased-in reduction of tariffs there, said Karen Toliver of the Society of the Plastics Industry Inc.
The agreement covers the Dominican Republic, and Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua. Plastic product tariffs in the DR-CAFTA countries can be as high as 20 percent, said Toliver, senior director, international trade and industry statistics.
Toliver said Washigton-based SPI would work to develop a list of priorities with its member companies. There's no specific timeline for getting that to the USTR, she said.
The plastics deal was one of many the administration made to win enough support for the trade deal, which narrowly passed 217-215, and it's a minor one, compared to much higher-profile side deals on China, sugar and textiles.
Souder, who was unsure about supporting DR-CAFTA, was mainly motivated by an administration commitment to consider tougher measures on China before deciding to vote for the trade deal, according to one of his aides, who spoke on background.