CAFTA-DR: Dominican Republic-Central America Free Trade Agreement

The Dominican Republic-Central America Free Trade Agreement (CAFTA-DR) is a U.S. free trade agreement with Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua. The agreement reduces or eliminates tariffs and trade barriers, creating greater market access and supporting the movement of goods throughout the United States, Central America, and the Dominican Republic. For importers, exporters, manufacturers, and logistics providers, CAFTA-DR can provide significant opportunities to reduce customs duties and landed costs when goods meet the agreement’s requirements.

CAFTA-DR and the Supply Chain

CAFTA-DR is particularly relevant to international logistics, customs compliance, and supply chain management because preferential tariff treatment depends on meeting specific rules of origin. Depending on the product, qualification may be based on requirements such as tariff shifts, regional value content, accumulation, and de minimis provisions. Importers must also ensure that their documentation, product classifications, and origin determinations support any CAFTA-DR duty preference claimed at entry.

Understanding and properly applying CAFTA-DR can help businesses optimize duty costs, improve customs compliance, and make more informed sourcing and supply chain decisions. Companies importing or exporting between the United States and CAFTA-DR countries should regularly review applicable rules of origin and tariff requirements to ensure they are capturing available trade agreement benefits while minimizing compliance risk.

To learn more, check out our Shap Blog about Free Trade Agreements (FTAs).