Washington, DC, July 27-- Thirty members of the National Retail Board of Directors today urged the House to pass legislation implementing the Dominican Republic-Central American Free Trade Agreement.
"DR-CAFTA is critical to the economic and political stability of the six countries that are hoping to cement economic ties with the United States through this agreement," Board members said in a letter to House Speaker Dennis Hastert, R-Ill., and other House members. "With a manufacturing base built largely on apparel production for the U.S. market, the economies of the six countries are ... at risk due to new competitive pressures resulting from elimination of worldwide textile and apparel quotas and major changes in the way clothing is manufactured."
"DR-CAFTA will create new incentives for apparel retailers to expand their sourcing operations in the region," the letter said. "It will enhance the economic partnership between U.S. and regional textile and apparel manufacturers, allow them to adjust to the new competitive environment of the post-quota world, and create new jobs.
"Without DR-CAFTA, however, the competitive pressures and changes in the industry will inevitably force a shift of investment, production and sourcing to Asia. The result would be the elimination of tens of thousands of jobs in the apparel industry in the DR-CAFTA countries as well as the U.S. textile industry, which depends on the region as its major export market."
The House is expected to vote this week on H.R. 3045, the DR-CAFTA Implementation Act, sponsored by House Majority Leader Tom DeLay, R-Texas. Under "fast track" rules for trade agreements, the measure can only be approved or rejected and cannot be amended. 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 State 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.
