“This is a transcendental moment in the commercial relationship between Puerto Rico and the Dominican Republic,” Bacó said. “We have entered a new era of cooperation that is characterized by a fellowship that will make us a much stronger region economically.”
Gov. Alejandro García Padilla, Medina Sánchez and top officials signed 10 accords aimed at strengthening trade & cooperative ties between Puerto Rico and the Dominican Republic. Accords cover everything from joining efforts to teach English in public schools to working together to crack down on tax evasion, but the one-day summit’s primary purpose is to foster economic growth for both nations by joining the competitive advantages of the Dominican Republic’s emerging economy with the competitive benefits of Puerto Rico’s more developed economy.
Puerto Rico should double its annual trade to the Dominican Republic to $1.6 billion by 2017, Bacó augured, while the Dominican economic minister vowed to do the same, raising the neighboring country’s annual commerce with the island to nearly $1.2 billion.
Last year, Puerto Rico registered a positive trade balance of more than $247.6 million, exporting more than $821.3 million in goods and services to the Dominican Republic, while importing $573.7 million, according to P.R. Trade & Export figures.
Joint strategies for growth include helping the Dominican Republic tap a $500 billion market for U.S. government purchases under the Buy America Act of 1933, which gives preferential treatment to products made on U.S. soil by having parts of products made in the Dominican Republic and then finished in Puerto Rico, Bacó said.
Commonwealth officials are lobbying Washington, D.C., to include such exceptions under the Buy America Act, another DDEC official said.
Bacó’s Domincan peer Economic Minister José del Castillo said there is ample room for opportunity for the Dominican Republic to enter this market.
“For example, right now the Dominican Republic is the fifth-largest exporter of leather shoes to the U.S. We could easily enter an accord to make the shoe uppers, which make up 40% of the product, and have the rest completed in Puerto Rico so that it could comply with the U.S. government purchase program,” Castillo said. “There should be no problem in getting the exemption, as 15 countries have already benefited from sales under the Buy America Act.”
The two economies also stand to grow by substituting imports from other countries with imports from their regional neighbor, said Francisco Chévere, executive director of the P.R. Trade & Export Co.
For example, the Dominican Republic stands to benefit by Puerto Rico substituting agricultural imports from the continental U.S. or other countries with products from its Caribbean neighbor, such as substituting Colombian coffee imports with Dominican imports.
Likewise, Puerto Rico stands to benefit greatly if the Dominican Republic replaces generic drugs it imports from other countries with generic drugs made on the island. In a similar vein, Puerto Rico will also focus on exporting professional services and technological goods to its Caribbean neighbor, Chévere said.
“We have a work plan with products identified,” Chévere said, adding the initiative has the support of island trade groups such as the Puerto Rico Manufacturers Association, Food Marketing & Distribution Association, United Retailers Association and Chamber of Commerce.
“These are concrete accords that will give concrete results,” Bacó said.
Among the first deals in the works is for Puerto Rico businesses to switch from using metal cans bought stateside for food processed on the island to using cans that will be made in the Dominican Republic.
Business people from both Puerto Rico and the Dominican Republic are set to meet to discuss progress at a commercial summit that will be held within the next month, he said.