Retailers Welcome Passage Of DR-CAFTA.

The National Retail Federation welcomed House passage of legislation implementing the Dominican Republic-Central American Free Trade Agreement.

“Implementation of this agreement is going to create important new incentives that will encourage apparel retailers to expand their sourcing operations in the region,” NRF Vice President and International Trade Counsel Erik Autor said. “The Dominican Republic and Central America are already important to U.S. retailers because of the time-to-market advantage they hold over China and other Asian sources. But the unpredictability of sourcing from China in the current political environment makes it important for retailers to have reliable alternatives. DR-CAFTA will ensure the competitiveness of these countries in the post-quota environment so that they can continue to provide that alternative. DR-CAFTA will help retailers continue to provide American consumers with the products they need at prices they can afford.”

“It isn’t just retailers who rely on the region,” Autor said. “The DR-CAFTA countries are some of U.S. textile makers’ biggest customers, so thousands of U.S. manufacturing jobs rely on apparel production in this region. DR-CAFTA will help protect those jobs here at home.”

The House voted 217-215 early this morning to pass H.R. 3045, the DR-CAFTA Implementation Act, sponsored by House Majority Leader Tom DeLay, R-Texas. Companion bill S. 1307, sponsored by Senate Finance Committee Chairman Charles Grassley, R-Iowa, passed the Senate 54-45 on June 30.

DR-CAFTA includes the Dominican Republic plus the Central American nations of Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. Under current trade law, apparel from the region can qualify for duty-free shipment to the United States only if it is made of U.S. fabric woven from U.S. yarn, and even then only certain products are duty-free. DR-CAFTA would expand duty-free treatment to cover a wider range of products and would allow those products to be made of fabric produced in the region, along with a small quantity of fabric from Canada or Mexico. There is little textile production in the Dominican Republic or Central America, however, so as a practical matter manufacturers would still be limited to using mostly U.S. textiles.

For more information at http://www.nrf.com.