SAN JOSE -- The Semiconductor Industry Association today applauded passage of the U.S.-Central America-Dominican Republic Free Trade Agreement, known as CAFTA, by the U.S. House of Representatives.

“DR-CAFTA is an important agreement for the U.S. semiconductor industry,” said SIA president George Scalise. “Elimination of tariff and non-tariff barriers to trade is very important in helping U.S. companies gain access to these rapidly emerging markets."

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

Nearly 80% of U.S. semiconductor companies’ manufacturing capacity is in America, SIA said. Nonetheless, overseas sales account for 73% of their revenues. 

Other major trade groups echoed the SIA.The National Association of Manufacturers, also cheered the passage, calling it “a big win for the United States, for Central America and for the world.” 

As a result of the agreement, four countries (Dominican Republic, Guatemala, Honduras, and Nicaragua) will join the World Trade Organization’s Information Technology Agreement, 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.

The bill, H.R. 3045, narrowly passed in the House yesterday. It passed the Senate last month and is expected to be signed by President Bush.

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

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