Overview of best prospect sectors, major infrastructure projects, significant government procurements and business opportunities.
U.S. products and services enjoy a strong reputation for quality and, due in part to CAFTA-DR, are highly competitive. Consumer attitudes and brand preferences are similar to those in the United States and many major U.S. franchises are present in the country. Television shows from the United States and other media are widely available and popular. Dominicans travel frequently to the United States for business, vacation, medical treatment, study, or to visit family.
As a signatory of the CAFTA-DR free trade agreement, the DR stands to benefit from the issuance of licenses to import U.S. shale gas in liquefied (LNG) or compressed form. Access to this energy continues to help diversify its energy matrix. The private sector in the DR is leading the transition to greater use of natural gas in power generation.
Whether in traditional or renewable energy, there are opportunities for U.S. operators and suppliers in the construction or conversion of power generating facilities. The DR government’s efforts to encourage the generation of clean and renewable energy includes generous tax incentives for investors in the sector but do not include commitments to purchase the electricity produced. While the new fiscal reforms reduced tax incentives for producers of renewable energy, the medium to long-term prospects for renewable energy products and services are promising.
According to some projectins, the DR’s access to relatively inexpensive U.S. natural gas and the opening of the expanded Panama Canal has the potential to trigger a renaissance of offshore/near-shore manufacturing in the DR’s numerous free trade zones and allow the country to compete more effectively against products from China and Asia. The Dominican Republic’s strategic geographic location, competitive labor costs, modern shipping and port infrastructure, and free trade zones all bode well for continued growth, particularly as China and other countries’ labor and transportation costs increase. Additionally, President Abinader has publicly stated that Chinese investment will not be allowed into critical infrastructure like major ports, bridges, airports, etc. While the implementation of these commitments remains uncertain, the US embassy is encouraged by the DR’s ongoing push to implement international best practices on transparency in competition and procurement. It is likely that, should these efforts be successful, US companies will be more competitive locally and could see increased opportunities in the local market.
The Dominican Republic is the number one tourist destination in the Caribbean. The United States accounted for 39.8 percent of the 6.6 million tourists that visited in 2018, representing almost half of this key sector for the DR economy. This dynamic and growing segment of the economy creates opportunities for U.S. exporters in a range of industries (i.e., construction, hotel & restaurant equipment, agricultural products, etc.) that are necessary to support and grow the DR’s tourism sector.
Since 2016, over 97 percent of the goods entering the country from CAFTA-DR countries enter with no tariff. In virtually all industry sectors, CAFTA-DR gives significant advantages to U.S. exporters over non-CAFTA competitors.
Leading industry sectors for U.S. exports include the following: air conditioning and refrigeration equipment; automobile parts and services; building products; hotel and restaurant equipment; medical equipment; printing and graphic art equipment and supplies; renewable energy; safety and security equipment and supplies; and telecommunication equipment. In addition, the DR is a key buyer of U.S. agricultural products, with $1.3 billion on average (2014-2018) in annual agricultural imports.