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Go South

The sun comes out over Central America with a new trade agreement.

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This story appears in the October 2005 issue of Entrepreneur. Subscribe »

In late July, the free- trade agreement with five Central American countries and the Dominican Republic known as CAFTA-DR squeaked through the House, heralding a major expansion of an export market whose promise small business has already discovered. The hotly contested treaty was approved by the House with a vote of 217-215. President Bush affixed his signature on August 20.

Entrepreneurs in a wide range of sectors send considerable amounts of goods to Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua, countries included in the Bush-supported free-trade agreement. According to the Small Business Exporters Association, over two-thirds of the dollar value of non-oil imports going into those six countries comes from the United States. Moreover, smaller U.S. companies account for 37 percent of all U.S. exports to the CAFTA-DR region. "These are extraordinarily high percentages, among the highest for small U.S. exporters in any region of the world," says James Morrison, president of the SBEA. "Simply put, the CAFTA-DR markets have enormous built-in demand for U.S. products and services, as well as a high degree of acceptance of smaller U.S. company exporters."

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