The Dominican Ambassador to the United States, Sonia Guzmán and the Vice Minister for Economic Affairs and International Cooperation of the Ministry of Foreign Affairs (MIREX), Hugo Rivera, held a meeting with the United States trade representative, Ambassador Katherine Tai, in which expressed concern about the impact of the elimination of tariffs on imports of rice originating in the United States projected for 2025 in the Free Trade Agreement between the Dominican Republic, Central America and the United States (DR-CAFTA).
The subject was analyzed during a meeting between Dominican and US officials, in which ideas were also exchanged on strengthening DR-CAFTA as a source of more jobs in the country and cooperation for inclusive economic growth, in particularly through trade facilitation and capacity building.
The meeting was also attended by the Deputy Trade Representative of the United States, Jayme White; the Deputy Trade Representative for the Western Hemisphere, Daniel Watson; the deputy commercial representative for Agricultural Affairs, Julie Callahan and the senior director for Central America and the Dominican Republic, Andrea Malito.
While the Dominican delegation was also made up of the director of Trade Negotiations of the Foreign Ministry, Manuel Díaz Franjul; the minister counselor, deputy head of mission, Alejandra Hernández and the counselor in charge of Economic and Commercial Affairs of the embassy, Leonel Mateo Hernández.
At the meeting, the Dominican delegation warned that the elimination of tariffs on imports of rice originating in the United States would cause the disappearance of cereal production in the Dominican Republic, which would generate poverty, unemployment and other serious economic and social consequences for our country. country. This type of collapse of a major economic sector is unprecedented and could wreak havoc on economic development and migration flows from rural areas and abroad.
He highlighted the increase in productivity and efficiency in the sector, which has generated a progressive decrease in the price of food in the local market, from 60 cents to 43 cents a pound between 2009 and 2020.
However, the dismantling of tariffs would allow massive imports of subsidized rice from the United States, with a sale price below its real cost of production, exposing Dominican producers to unfair competition thanks to distortions created by the agricultural subsidies included in the United States Farm Law.
In the first year of his government, President Luis Abinader has declared the defense of the agricultural sectors a priority several times and in particular against the danger that this tariff reduction represents for the rice sector.
During the meeting, the delegation of the United States promised to carefully analyze the proposals of the Dominicans, with a view to the deadline established for the reduction of taxes and in accordance with the adjustment mechanisms allowed by the Free Trade Agreement.
Importance of rice production in the DR
The commission recalled that rice production is the most important agricultural activity in the Dominican Republic, since it has 300 milling industries and is the economic engine in 21 of the 32 provinces.
He highlighted that the sector has more than 30 thousand producers and generates more than 80 thousand direct jobs and 320 thousand indirect ones, contributing RD $ 22.6 billion a year to farmers in the field, equivalent to US $ 390 million.
He pointed out that rice represents almost 10% of national production in agriculture and according to data from the Central Bank of the Dominican Republic, it generates around 14% of employment in the agricultural sector.
Dominican officials emphasized that despite the obvious challenges arising from the effects of climate change in the Caribbean, rice has had a history of success in Dominican agriculture. During the period 2005-2019, production increased by 52%, from 9 million quintals to 14 million quintals, while the cultivated area increased by 27%, from 2.4 million to 3.1 million tasks.
Likewise, national consumption has been growing an average of 2.2% per year, as a result of the growth of GDP per capita. Currently 97% of all rice consumed in the country is locally produced.
They highlighted that the growth in the sector is the result of the hard work and dedication of the majority of small producers and is a testament to the importance of this staple in Dominican life.
Under the DR-CAFTA agreement, the Dominican Republic has eliminated import duties on almost all agricultural products originating in the United States. Tariffs and quotas on sensitive products such as beans, chicken legs, certain dairy products and rice have recently begun to be phased out of the period, scheduled to be completed in 2025.