Dominican Republic-Central America Free Trade Area (CAFTA-DR)

CAFTA has a more famous sibling, called NAFTA. NAFTA came first, and like all older siblings, hogs most of the attention. NAFTA stands for North America Free Trade Agreement, and it opened up trade between the U.S., Canada, and Mexico.

CAFTA (or the Central American Free Trade Agreement) came later, and expanded the NAFTA principles to a handful of Central American countries...plus one Caribbean one. Specifically, the agreement includes El Salvador, Costa Rica, Guatemala, Nicaragua, Honduras, and the Dominican Republic.

Because the DR got wedged in there, the deal sometimes gets called CAFTA-DR. The agreement was passed in 2005 and forms a free trade area between the U.S. and the other countries included in the deal. The main purpose of the agreement was to lower tariffs between the countries involved, a NAFTA-style move to open up trade.