"When we approached the Manufacturers' Association about participating in their schedule for trade missions for the year, the DR featured high on the list of priority destinations for trade," says Scotiabank's Commercial Manager in Trinidad and Tobago, Simone J Penco.
"As a destination on its own, the DR has a larger population than all the Caricom countries combined," she adds. "Demand is also high and it continues to grow for consumer goods, electronic equipment, grains and food stuff, as well as industrial products, skilled labour and consultancy services. The country also has a sizable import bill for oil and gas products. All of these products can be supplied from Trinidad and Tobago.
"In addition, the Dominican Republic has a vibrant and well-established trading, distribution and retail sector to supply the country's need for food stuff, grains and consumer goods and these were the main sectors targeted by the TT exporters. With a population of 8.5 million, even a minor inroad into this growing economy will be worth the effort," says Penco.
As a further boost, the significant trading relationship with Mexico, Cuba and the United States has put the Dominican Republic in a unique position to benefit from the large US economy nearby and its softening position on international trade with Cuba.
The DR also has an indirect inroad into the North American Free Trade Agreement through its growing business relations with Mexico.
"Trade between Caricom and the Dominican Republic has grown dramatically since 1995. However, establishing a working relationship around Law 173 Legislation may provide the biggest challenge for future expansion," adds Penco.
Many businesses liken the Law to an informal marriage between the exporter and the distributor, says Penco, who formed part of the Bank sponsored trade mission from Trinidad and Tobago last September.
"In the event of a break-up, the exporter is required to pay compensation, including five years, worth of profits, before he can consider another distributor. So, traders are very particular about whom they chose as a business partner."
The uncertainty has encouraged many exporters to establish their own trading or distribution operation in the country, which acts as the importing agent. With key DR residents on the Board as advisors, sales by many Trinidadian exporters have been growing rapidly.
The mission attracted thirty-one companies representing a wide range of manufacturing and service sectors, including food and beverage, apparel, footwear and sewn products, paper, printing and packaging, construction and building products and financial services.
As the main Caricom country trading with the DR, Trinidad and Tobago enjoys a favourable balance of trade with its Latin business partners," says Gavin Ottley of Trinidad and Tobago's trade promotion agency, TIDCO.
He said in 1997, this country imported TT$28 million worth of goods and exported $316 million to the DR. The 1998 figures showed the highest trade values ever with Trinidad and Tobago importing TT$38 million and exporting TT$390 million. Trade decreased slightly in 1999 as imports from the DR dropped to TT$21 million while exports reached TT$389 million.
The uncertainty about the DR ratifying the Free Trade Agreement and the non tariff barrier imposed by Law 173 legislation have forced traders on both sides to adopt a wait-and-see position before taking the next step of increasing trading activity and exploring opportunities for new products.
Law 173 is a common non-tariff barrier in many countries throughout Latin America and dates back to Spanish colonial rule. Its objective was to protect local distributors from exploitation by Spanish merchants.
The Law effectively ties an exporter to his local distributor for life by entitling the importer to up to five years of unrealised profits in the event of a termination of contract.
"In the main, however, the mission's organization was good," says Ottley. "Many participants saw it as an important first step and were quite satisfied with the quality of interpreters, the press exposure generated by the mission and the quality of logistical support received.
"The mission received extensive media coverage during our stay. This was useful, as it not only created awareness of Trinidad and Tobago and its manufacturing sector, but also promoted bilateral trade between the countries."
With a GDP of more than US$43 billion, the DR is also an excellent market for investment, as well as a source for visitors for TT's tourism industry. Trinidad and Tobago currently has a diplomatic presence in Santo Domingo at the Consulate level. To support commercial interests, the DR/TT Chamber of Industry & Commerce was established and remains a vibrant organization promoting bilateral trade between the countries.
Many of the participants were still disappointed by the level of tariff still imposed on imported goods. However, Ram—n Alburquerque, President of the DR Senate, provided the assurance that the recently-negotiated Free Trade Agreement between the DR and Caricom would be ready by year-end, when his Government presents its budget and fiscal estimates for 2001 to Parliament.
The current population of the DR stands at 8.5 million with a projected growth rate of 1.62 percent. The country's literacy rate is estimated at 83 percent with the population below the poverty line estimated at 25 percent.
Currently the exchange rate is 16.1 DR pesos = US$1 and GDP per capita is US$5,400 with real GDP growth at 8.3 percent. The inflation rate is 5.1 percent and unemployment currently stands at 13.8 percent.