Distillers Praise Congress for Passing DR-CAFTA; Free Trade pact eliminates tariffs on American spirits
WASHINGTON, D.C. –The Distilled Spirits Council today congratulated the House for joining the Senate in approving the Dominican Republic-Central American Free Trade Agreement (DR-CAFTA) last night. The DR-CAFTA will open the Central American market immediately to U.S. exports, secure important protection for Bourbon and Tennessee Whiskey and solidify the status of Central American nations as important trading partners for the U.S. spirits industry. “The Distilled Spirits Council has enthusiastically supported the efforts to pass the DR-CAFTA, which is a state-of-the-art, comprehensive agreement that will have a direct and immediate impact on the sale of U.S. made spirits products in Central America nations and the Dominican Republic,” said Debbie Lamb, Senior Vice President of the Distilled Spirits Council. Lamb noted that the Distilled Spirits Council has been part of a coalition aggressively lobbying in support of the free trade agreement. The DR-CAFTA offers important advantages for American products in a growing market, including the elimination of tariffs on U.S. spirits – which are as high as 40% ad valorem in certain DR-CAFTA markets – and protects the unique identity of U.S. products: Bourbon and Tennessee Whiskey. Under the provisions of the DR-CAFTA, the Central American countries will immediately eliminate tariffs on U.S. produced whiskey and gin. Honduras will also eliminate immediately its current tariff of 15 percent on liqueurs. The Dominican Republic will immediately eliminate the tariff on most American whiskies, specifically Bourbon and Tennessee Whiskey. All other tariffs will be phased out over 5, 10, 12 or 15 years. “The tariff reductions under the DR-CAFTA create a competitive advantage for U.S. producers of distilled spirits relative to other distilled spirits imported by Central American nations and the Dominican Republic,” said Lamb. Over the last five years, U.S. direct exports of distilled spirits to Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic have grown by almost 85 percent, reaching over $3.9 million. The U.S.-Central American-Dominican Republic FTA will help ensure continued growth in U.S. spirits exports to the region. Since 1990, U.S. exports of distilled spirits worldwide have more than doubled, growing to over $716 million in 2004. In 2004, total U.S. exports of spirits increased by 22.1 percent over 2003 values.