Businessmen point out advantages of EPA-UE

SANTO DOMINGO.- Dominican businessmen say that the agreement (EPA or European Partnership Agreement) signed this past Wednesday with the European Union (EU), that has 480 million consumers, is a positive one and the best deal that the Dominican Republic has signed, even better than the free trade agreement signed with the United States and Central America, called DR-CAFTA.

As an example, the FTA with the European Union completely opens that market to the Dominican Republic, without quotas or tariffs, and with rules that are compatible with the World Trade Organization (WTO), and this is different than the agreement with the United States.

The EPA with the European Union gives judicial security to 50,000 Dominican families that depend on banana, cacao, tobacco and rum production, because new products will go into Europe under conditions that are unprecedented, among which is Dominican sugar that will start arriving in Europe with a first shipment of 30,000 tons in November.

The free zones will be able to use cloth from anywhere to make clothing for the European market, while keeping their tax advantages, but to export a pair of pants to the United States, the cloth has to come from DR-CAFTA countries or from NAFTA nations. According to sources, these "are not necessarily the most efficient cloth producers", and sugar exports are attached to quotas under DR-CAFTA.

In exchange for this opening up, the Caribbean could exclude those products that were sensitive to competition and put off for 25 years the loosening of European imports. The Caribbean nations negotiated new rules on commercial protection, tourism, cultural cooperation, the push for innovation, decent working conditions and fair trade.

Manuel Diez, the president of the Dominican Industrial Association (AIRD) said he felt that one of the advantages of the EPA in relation to the DR-CAFTA was that the impact on national production is much more limited, since the spiny issue of liberalization will come about in 25 years and perhaps not at all, because many of the products were excluded.

For Diez Cabral, the safeguard measures are more flexible for the economies of the area, since they can be extended beyond the period of liberalization agreed upon, and there is no right for the other side to install compensation measures.

The industrial leader did say, however, that DR-CAFTA and the EPA each have contributions and characteristics that are specific to each and each one contributes to the transformations that the country needs. He said that he believed that DR-CAFTA was real leverage in the push for institutional changes in the country.

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Lawyers in lawsuit with road-builder Codacsa to get US$8.5M

SANTO DOMINGO.- Dominican Republic is paying 8.5 million dollars to the lawyers who’ll represent it in the lawsuit with the road-builder and management company Codacsa, before an International Court based in Paris.

Public Works minister Victor Diaz Rúa told the special commission designated by the Chamber of Deputies to investigate the concession contract for the construction of the Eastern Motorway, that the money will be paid "to one of the most prestigious law offices in Washington, extremely qualified in international controversies of this type," but didn’t mention the law firm’s name.

“We’ll be there, the fear and blackmail we’ve already surpassed, we’re in arbitration. They have constituted their lawyers, we’ve constituted lawyers, they have selected their arbitrator, we have already selected our arbitrator, those two referees will have to designate a third party that is going to be president," Diaz told the deputies.

The Public Works minister affirmed that the special commission has the proof that Codacsa has contracted "ghost" companies, which have altered budgets in the highway’s construction, evidence that will be presented in arbitration. "Here there are indications that involve many people in criminal responsibility."


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Wave of debates on reform of Dominican Constitution

SANTO DOMINGO.- Meetings, forums and special sessions on the bill that declares the need to reform the constitution continue this week in and outside the halls of Congress, aimed at debating the proposal submitted by the Executive Branch to the legislature.

The bicameral Commission that studies the initiative will meet 4 p.m. Wednesday to begin discussions on Thursday, and will have a special meeting with the Central Electoral Board judges, to discuss that court's matters, to be adopted in the new Constitution.

The Senate will also begin receiving proposals from various institutions, personalities and citizens wishing to comment on the proposed constitutional reform debate.

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Samaná port’s concession contract raised from US$10M to US$100M

SANTO DOMINGO.- The Dominican Government raised from 10 to 100 million dollars the concession contract for Samaná’s Arroyo Barril (Duarte) port, signed with the company Valley Forge Corporation for the project’s construction, newspaper Diario Libre reports.

The addendum 023/2008 modified the contract that dates from 2001 and has a 30-year period, was signed about three months between the Dominican Port Authority (Apordom), in name of the Dominican State and executives of the company.

It stipulates that the signature is also for the construction of the Pirate port, the extension and new construction of Arroyo Barril’s current footer, a passenger terminal, offices, preparation of the area, and the construction of a second pier next to the present one.

According to Apordom legal consultant Carlos Marmolejos, the variation was done at the investors’ request, who changed their tender of 100 million dollars, 90 million more than the commitment assumed in 2001.

The new signature was done, just like the original contract, without the Congressional approval and without calling for tender offers.


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Dominican Government to cancel Codacsa contract, finish Eastern Motorway

SANTO DOMINGO.- The Government will assume the works to conclude the Eastern Motorway once Congress terminates the contract with Codacsa, the company hired to build the road in 2001, said Public Works minister Victor Diaz Rúa Tuesday.

The official, after meeting with Senate Public Works Commission president Euclides Sanchez, said it’s not necessary to seek new tenders for the work.

Diaz said Codacsa, which has already taken the case to the International Arbitration Court in Paris, alleging breach of contract, has spent only the taxpayers’ money in the project.

He revealed that RD$1.6 billion have been spent in the project, and that the company has failed to meet the contract’s terms when it failed to materialize its pledged investment.

“The company doesn’t want that contract terminated because they have the best deal in the world, the decision to cancel is now in the hands of the senators and deputies,” Diaz said, adding that the contract signed in 2001 doesn’t correspond with the terms of the bidding Codacsa won in 1998.

For his part, Sanchez deplored that the company hasn’t reponded to the Senate’s invitation to defend their position. "They, in a discourteous manner didn’t attend the invitation, we already met with Public Works and once we receive the documents we’ll render a report to the Senate’s plenary session."


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Business Wire: Dominican Government loses court round in US$680M suit

SANTO DOMINGO.- An arbitration tribunal constituted under the France-Dominican Republic Bilateral Investment Treaty released an award last week ruling on the jurisdictional objections raised by the Dominican Republic in a claim brought by TCW and its parent company.

“The claim involves an investment in EDE ESTE, an electric distribution company in the Dominican Republic that serves approximately 600,000 customers and has 1,200 employees. The tribunal rejected the objections raised by the Dominican Government and allowed US$680 million in claims against the Republic to proceed to a final hearing and an award on the merits of the dispute,” Business Wire said.

“We are extremely pleased that the tribunal convincingly rejected the Government's position. This arbitration proceeding goes to the heart of the problems affecting the Dominican electric sector and the unstable legal and regulatory framework. By holding the Government accountable we hope to finally advance the prospect of having a reliable and efficient electric sector for our customers,” said R. Blair Thomas, president of EDE ESTE and group managing Director of TCW, quoted by the Web site.

“On March 15, 2007, TCW and its parent company initiated an arbitration under the bilateral treaty to resolve its allegations that the Republic's treatment of the investment in EDE ESTE has greatly diminished the value of EDE ESTE. The Republic raised objections to the jurisdiction of the tribunal to hear the claims under the Treaty. The Tribunal's decision rejected these objections and now the arbitration will proceed to a final hearing in 2009,” said Business Wire.

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