NewsWhore
06-17-2008, 05:20 PM
In an op-ed contribution in El Caribe, economist Roberto Despradel focuses on the DR's trade deficit with the US a year into the DR-CAFTA trade agreement. The trade deficit for the first four months of 2008 was US$850 million, which is double the deficit for the previous year. Imports were up 24%, while export declined 3%. To explain what has caused the deficit, he comments that the decline in apparel exports continued, and ferronickel exports were also down. Taking those two categories out of the equation, he says that exports to the US were up 7.5%. He mentions that several free zone manufacturing categories are doing well - medical instruments (up 14%), jewelry (up 17%), machinery and electronic components (13%), footwear (23%), and cigars (14%). He explains, nevertheless, that exports outside the free zones, such as beverages, plastic, cacao, vegetables and ceramic goods were down.
The big difference, of course, is due to an increase in imports. He explains that the purchase of electric appliances was up 53%, probably due to the elimination of duties under DR-CAFTA. Likewise, plastics imports were up 35%, while vehicle imports increased 12%. But the biggest increase in imports took place in the food sector, reflecting an increase in the cost of food products. For instance, grains were up 40%, fat and vegetable cooking oil were up 257%, animal fed 36% and fertilizers 300%.
Despradel says that the DR needs to apply policies to promote its exports. "We need to become a competitive country, with a productive sector focused on successfully placing its products abroad. If not, we will feel the trade adjustments in the economy, in the increase in the exchange rate as well as in interest rates."
More... (http://www.dr1.com/index.html#11)
The big difference, of course, is due to an increase in imports. He explains that the purchase of electric appliances was up 53%, probably due to the elimination of duties under DR-CAFTA. Likewise, plastics imports were up 35%, while vehicle imports increased 12%. But the biggest increase in imports took place in the food sector, reflecting an increase in the cost of food products. For instance, grains were up 40%, fat and vegetable cooking oil were up 257%, animal fed 36% and fertilizers 300%.
Despradel says that the DR needs to apply policies to promote its exports. "We need to become a competitive country, with a productive sector focused on successfully placing its products abroad. If not, we will feel the trade adjustments in the economy, in the increase in the exchange rate as well as in interest rates."
More... (http://www.dr1.com/index.html#11)