House passes agreement that removes barriers to US technology products

July 29, 2005 – The Semiconductor Industry Association (SIA) has applauded the US House of Representatives’ passage of H. R. 3045, the US-Central America-Dominican Republic Free Trade Agreement (DR-CAFTA). “DR-CAFTA is an important agreement for the US semiconductor industry,” said SIA president George Scalise. “Elimination of tariff and non-tariff barriers to trade is very important in helping US companies gain access to these rapidly emerging markets.”

“The agreement will also benefit Central American consumers by providing affordable access to the benefits of technology. Although nearly 80% of US semiconductor companies’ manufacturing capacity is in America, overseas sales account for 73% of their revenues,” Scalise continued. Scalise noted that American chipmakers do the majority of their high-wage, high value-added work in facilities in the United States.

Central America and the Dominican Republic represent rapidly-growing markets worth $2.6 billion annually for US high-tech exports. Currently, US companies export more high-tech goods to this region than to Australia, Israel, or India.

As a result of the agreement, four countries (Dominican Republic, Guatemala, Honduras, and Nicaragua) will join the World Trade Organization’s Information Technology Agreement (ITA), eliminating duties on a range of high-tech products. El Salvador and Costa Rica were already ITA members.

In addition, DR-CAFTA will liberalize the telecommunications and computer-related services sectors, key customer segments for semiconductor products. The agreement also includes strong e-commerce and intellectual property provisions important for the industry.

“Successful House passage of DR-CAFTA is an important step to demonstrating US commitment to trade liberalizing efforts with other free trade agreements and the Doha Round in the WTO,” Scalise concluded.


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