The main objective of the Dominican Republic is to ensure the continuity of its commercial relationship with the United Kingdom. Since 15 October 2008, following the signing in Barbados of the economic partnership agreement, which ensures tariff free access to the European market, the Dominican Republic has established itself as the largest supplier of bananas. Since the entry into force of the agreement and until December 2015, the Dominican Republic was the main exporter to the United Kingdom, thus becoming the only bilateral market within the EU for the Dominican Republic and the United Kingdom.
The Dominican Republic is an important market for the United Kingdom, with unique growth figures. Last year, British exports to the Dominican Republic grew by 90% and the Dominican Republic's growth stood at 84%. "Preserving the rules of the game is not only in the interest of the Dominican Republic, but also of the British," as was stated by one of the government representatives, responsible for trade negotiations with the UK.
After the Brexit, the pound lost 25% of its value, and although it has recovered, the devaluation of the pound against the Euro is still of between 14% and 17%.
Goals
In the medium term, the objective is to try to achieve the least possible disruption with the negotiation of the UK's departure from the EU.
However, after the negotiations, new agreements will be negotiated with the Dominican Republic and with new competitors.
Once the country has left the EU, a new agreement will have to be negotiated. The advantage is that there is already an agreement in force, so there are already some foundations on which to build the next agreement. It is in the interest of the Dominican Republic to maintain the rules that are beneficial for the banana sector.
Actions taken
Ministerial contact was maintained with the Minister of Exports and with visits to both the Dominican Republic and London. A parliamentary delegation arrived in the Caribbean country, where they were convinced that the banana sector is not only crucial to the social stability and prosperity of these producing regions, but it also meets the strict standards of the United Kingdom. Both countries were also able to see how they benefited from this relationship.
Likewise, a Dominican Chamber of Commerce is being created in London to allow the negotiations to continue. Furthermore, many UK companies are showing interest in strengthening this business relationship and this private agreement.
In any case, both countries will likely maintain their agreements with as few changes as possible, as that is precisely what they pursue. It is, after all, a very profitable relationship for both countries, with figures totalling 200 million dollars of imports and 200 million of exports, of which three quarters correspond to bananas. Bananas are a very sensitive product, not only because of their relevance for the Dominican trade balance, but also because of the social component of banana production and how many families live from this sector. The cost of a single day without an agreement would be very high, not only for the Dominican Republic, but also for other countries that have this same level of dependency.
Also, the Caribbean country is a very important partner for the UK, and the British have an interest in maintaining their import preferences when it comes to vehicles, machinery and alcoholic beverages, such as whiskey.
"If the UK leaves the EU, it would be out of our current preferential framework," explains one of the Dominican representatives. Moreover, it is estimated that a minimum tariff of 16% would be imposed if there was no preference agreement.