The Dominican Republic and five Central American countries recently signed a free trade agreement with the United States that could boost their combined exports to the United States by as much as 28 percent after implementation, especially in textiles, clothing and processed crops, according to a new International Monetary Fund report. The U.S. International Trade Commission has previously estimated a 12.5 percent increase after the Dominican Republic-Central American Free Trade Agreement (DR-CAFTA) is fully implemented, as reported in the Latin Business Chronicle.

“Mexico’s experience under NAFTA suggests that trade flows between the Central American countries and the United States could increase rapidly after the inception of DR-CAFTA,” the IMF points out in the report, Central America: Global Integration and Regional Cooperation.

DR-CAFTA, also known as CAFTA-DR or CAFTA, will immediately reduce tariffs on all nonagricultural and nontextile exports from the CAFTA countries to the United States. About 80 percent of U.S. nonagricultural and nontextile exports from the United States will be reduced. Tariffs on all other goods will be phased out gradually over a 5- to 20-year period.

DR-CAFTA has a total population of 45 million and a combined GDP of $91.6 billion. By comparison, Argentina - Latin America’s third-largest economy - has a population of 37.9 million and a GDP of $151.9 billion.