Consumer Goods

• Trade and Tariffs
• Tariff Elimination

Trade and Tariffs

The consumer goods sector is composed of various product groups, including the toy and furniture Uruguay Round sectoral agreements, appliances, and various recreational goods. Consumer goods accounted for about 7 percent of total U.S. industrial exports to Central America and the Dominican Republic in 2004, totaling about $588 million. Appliances lead U.S. exports in the sector. The Dominican Republic is the United States’ leading export market in the sector, accounting for about 40 percent of total U.S. consumer goods exports to the region.

Central American and Dominican tariffs on consumer goods range from 0 to 30 percent, with the average varying by country from 8.2 to 16.2. The highest tariffs generally apply to recreational vehicles and clocks.

Central American and Dominican exports to the United States in this sector were about $749 million in 2004, or about 16 percent of the region’s total industrial exports to the United States. The Dominican Republic is the leading exporter of the six countries, accounting for about 55 percent of Central American and Dominican exports in the sector.

U.S. tariffs on consumer goods range from 0 to 109 percent, with an average of 3.6 percent. Tariffs are highest on broom corn brooms. All products in this sector receive duty-free treatment under the Caribbean Basin Initiative (CBI) and Caribbean Basin Trade Partnership Act (CBTPA).

Tariff Elimination

Tariffs will be phased out according to four tariff elimination categories: immediate elimination, equal cuts over five years, equal cuts over 10 years, and non-equal cuts over 10 years. Duties on products in the last category will decrease by 2 percent for the first two years, by 8 percent for the next four years, and by 16 percent for the last four years.

Overall, 39 percent of U.S. consumer goods exports receive duty-free treatment immediately upon implementation of the agreement. Tariffs on 10 percent of exports will be eliminated over five years. Duties on the remaining 50 percent of U.S. exports will be eliminated over ten years. Only 10 percent of exports will be subject to non-linear tariff elimination. Printed matter, refrigerator/freezers, motorcycles, and wooden furniture are examples of products that will be subject to non-linear 10-year staging.

Furniture. Six percent of U.S. furniture exports to Central America and the Dominican Republic will be duty-free immediately upon implementation of the agreement. Tariffs on another 13 percent of exports will be eliminated over five years. Duties on the remaining 81 percent of U.S. exports will be eliminated over ten years. Twenty-six percent of exports will be subject to non-linear tariff elimination.

Toys. Thirty-one percent of U.S. toy exports to Central America and the Dominican Republic will be duty-free immediately upon implementation of the agreement. Tariffs on 4 percent of exports will be eliminated over five years. Duties on the remaining 65 percent of U.S. exports will be eliminated over ten years. No toy exports will be subject to non-linear tariff elimination.

Gems & Jewelry. Ninety-two percent of U.S. gems and jewelry goods exports to Central America and the Dominican Republic will be duty-free immediately upon implementation of the agreement. Tariffs on 1 percent of exports will be eliminated over five years. Duties on the remaining 7 percent of U.S. exports will be eliminated over ten years. No gem and jewelry exports will be subject to non-linear tariff elimination.

Recreational & Sporting Goods. Fifty-six percent of U.S. recreational and sporting goods exports to Central America and the Dominican Republic will be duty-free immediately upon implementation of the agreement. Tariffs on 16 percent of exports will be eliminated over five years. Duties on the remaining 28 percent of U.S. exports will be eliminated over ten years. Only 6 percent of recreational and sporting goods exports will be subject to non-linear tariff elimination.

The United States agreed to consolidate all CBI and CBTPA tariff preferences into the final tariff elimination schedules. As a result, all Central American and Dominican exports of consumer goods will continue to receive duty-free treatment.