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12/26/03 - CAFTA TRADE AGREEMENT REACHED - 2003-12-24

The United States and four Central American countries have reached an agreement on free trade. The U.S.-Central American Free Trade Agreement, known as CAFTA, is designed to tear down tariff walls that block trade between the U.S. and Central America. It will eliminate tariffs, open markets and promote investment, economic growth, and opportunity in El Salvador, Guatemala, Honduras and Nicaragua. Negotiations continue with a fifth country, Costa Rica.

CAFTA will open markets for services in areas including energy, tourism, transportation, engineering, financial services, and entertainment. And it will advance Central America's political development. In the words of U.S. Trade Representative Robert Zoellick, "CAFTA will promote the indispensable building-blocks of a free society -- such as respect for the rule of law, private property rights, competition, and accountable institutions."

CAFTA is a key part of U.S. regional and global efforts to promote free trade. As President George W. Bush says, free trade "is not just an economic opportunity, it is a moral imperative”:

“A world that trades in freedom will grow in prosperity and in security. For developing nations, free trade tied to economic reform has helped to lift hundreds of millions of people out of poverty. The growth of economic freedom and ownership in developing countries creates the habits of liberty and creates the pressure for democracy and political reform. Economic integration through trade can also foster political cooperation by promoting peace between nations. As free trade expands across the earth, the realm of human freedom expands with it.”

El Salvador Minister of Economy Miguel Lacayo agrees. The U.S.-Central American Free Trade Agreement, he says, “stands for development, democracy, and keeping [the Western] hemisphere strong."