January 27, 2023
The fifth Trade Policy Review of the Dominican Republic was an excellent opportunity to get a clearer understanding of the country’s main developments, achievements and challenges in its trade and investment policies since the previous Review in 2015. I would like to thank the Dominican delegation, led by H.E. Ambassador Sánchez-Fung, Permanent Representative of the Dominican Republic to the WTO, for their constructive and valuable engagement throughout the review process. I would also like to thank H.E. Ambassador María Luisa Pagán of the United States, our discussant, whose comments contributed to enriching our discussions. The more than 200 questions submitted before the meeting and the 28 delegations that took the floor highlight the importance Members attach to the trade and related policies of the Dominican Republic. Members greatly appreciated the written responses provided by the Dominican Republic and look forward to receiving outstanding responses no later than one month after this meeting is adjourned.
Members commended the Dominican Republic for having recovered quickly from the negative effects of the COVID-19 pandemic. GDP declined by 6.7% in 2020, but recovered strongly in 2021, expanding by over 12%. This was due to the adoption of sound macroeconomic policies that included a fiscal package of over 4% of GDP, a liquidity injection, and a reduction in reserve requirements. Members noted that the Dominican Republic showed impressive economic resiliency during the pandemic, especially considering the challenges that vulnerable economies such as the Dominican Republic face due to climate change.
Members noted that the Dominican Republic’s trade policy regime had remained in general open and transparent, with few obstacles. This is reflected in the importance that trade in goods and services has for the economy, accounting for over half of GDP. Tourism remains one of the main sources of foreign exchange, followed by exports from free trade zones and remittances from Dominicans abroad, which, combined, totalled some USD 23 billion, or over 25% of GDP in 2022. In this context, Members noted the heavy reliance on exports which are manufactured in free trade zones and in one single market.
Members acknowledged that the Dominican Republic had achieved strong economic growth and higher employment levels by maintaining an open market. In this regard, Members noted efforts made to maintain an attractive climate for business and investment, such as the implementation of secure payment systems and the development of a FinTech industry. However, the Dominican Republic was encouraged to continue strengthening the rule of law. Foreign direct investment is expected to assist the Dominican Republic in diversifying exports, especially in “modern services”. In this context, the Dominican Republic was encouraged to ratify the WTO Information Technology Agreement (ITA). In addition, Members noted that the electricity sector continued to face challenges due to the lack of investment in transmission and distribution, and reliance on imported petroleum fuel, despite diversification efforts; this could affect Dominican international competitiveness.
Members appreciated the active engagement of the Dominican Republic in the WTO and its strong commitment to a rules-based multilateral trading system. Members were pleased to note that since September 2022 the Dominican Republic has participated in the Committee on Government Procurement as an observer. Members also highlighted the participation of the Dominican Republic in the joint initiatives on MSMEs and investment facilitation for development, and was invited to participate in other initiatives, such as those related to e-commerce and services domestic regulation. While the Dominican Republic’s efforts to involve women in trade were highly appreciated, more information was sought on how to effectively integrate women into development plans and international trade. Some Members referred to its overall good notification record and urged the Dominican Republic to submit outstanding notifications to further contribute towards transparency.
Members noted that there had been significant changes in the Dominican Republic’s customs regime, as new customs legislation had been issued to modernize and simplify customs regimes and procedures, to facilitate trade including electronic declarations and provisions on advance rulings. In this context, Members congratulated the Dominican Republic for recently adopting regulations to fully implement this law. In addition, Members welcomed that, despite the current economic difficulties, tariffs had remained relatively low, with an average MFN rate of 7.8% in 2021, the same as in 2014; some 54% of tariff lines are zero‑rated. However, some discrepancies were noted regarding the application of MFN and preferential tariffs, and other charges affecting imports. Although few non-tariff barriers are applied, it was noted that the Dominican Republic maintained a system of import licensing, which raised some concerns.
Some Members also referred to the outdated nature of some SPS legislation. Members commended the Dominican Republic for ensuring greater transparency and predictability in the procedures to develop technical regulations. Members appreciated the entry into force of the competition law, which increased efficiency in the economy. New developments regarding the IPR regime were positively welcomed; however, concerns remained regarding the patent review and approval process and piracy.
On agriculture, Members were pleased to note the shift towards sustainable agriculture practices during the review period and how these practices had contributed towards increased food security, rural jobs, and agricultural exports. Nonetheless, concerns were raised on some domestic support programmes, high levels of tariff protection, and exemptions for import licences.
Members recognized and commended the Dominican Republic’s holistic approach to improving the lives of its citizens and economic competitiveness through a series of ambitious national development plans. Members encouraged the Dominican Republic to share its experiences on the impact of these policies, and the policies put in place to deal with future crisis.
In closing, I would like to point out that our discussions highlighted the importance Members attach to the Dominican Republic’s trade and related policies and to its engagement in the multilateral trading system. The Review of the Dominican Republic’s trade policies and practices will be successfully concluded, to the benefit of all the Membership, when all outstanding answers to the questions raised have been provided in one month. Lastly, let me thank the delegation of the Dominican Republic, the discussant, all delegations that participated, and the Secretariat for achieving a successful Trade Policy Review of the Dominican Republic.