Dominican car dealers discard price drops from Free Trade

http://www.dominicantoday.com 08/03/07

Santo Domingo.- The Dominican association of auto dealers (Anadive) said today that with the implementation of DR-CAFTA trade deal, the prices for used vehicles imported from the United States will not drop and that reductions for new vehicles will be minimum.

Anadive said that new vehicles originating from the United States posted a 25% tariff reduction, which is currently 20% of its CIF value, in other words, that that 25% percent of the levy equals 5% of the tariff, and for that reason the tariff was 15 percent.

The association that groups dealers feels that a false expectation has been generated regarding the prices of vehicles imported from United States.

It states that this measure applies only to those automobiles originating from the U.S., which with a Certificate of Origin demonstrates that more than 35% of their components and parts are U.S. manufacture, and have engines larger than 1500 cc. For those vehicles a gradual annual reduction will be applied for the next 3 years, at 25% increments until reaching zero,

Anadive said that as the automobiles are placed under other taxes burdens, such as a 16% ITBIS, and 17% for the 1st license plate, the reduction from the DR-CAFTA comes to just 2 % of the vehicle’s final cost.

As far as used vehicles of U.S. manufacture, according the Customs Agency, the tariff clearing dis not apply to them, because they are used properties which cannot present the Certificate of Origin, to show the automobiles haven’t lost components and parts which makes them of U.S. origin.

Anadive said that it wants the Free Trade Agreement to also include tariff clearing for used vehicles and for the consumers to benefit from a possible price reduction for used automobiles.