CAFTA-DR to promote US & regional jobs through textile sector

On February 23, the Office of the United States Trade Representative announced a number of changes to the Dominican Republic – Central America – United States Free Trade Agreement (CAFTA-DR) at the Free Trade Commission meeting in San Salvador, El Salvador in order to promote U.S. and regional jobs and export opportunities. These changes will advance regional trade and economic integration in the textile and apparel sector, which is very important to regional production and employment.

The changes will also expand opportunities under the CAFTA-DR and encourage a vibrant textile and apparel supply chain in the Western Hemisphere to effectively face the challenge of competitors in Asia. Among the changes of particular significance is the clarification that certain monofilament sewing thread is now required to originate or be produced in the United States or the CAFTA-DR region in order for goods to qualify for preferential tariff treatment.

This type of sewing thread, while increasingly used within the apparel industry, had been omitted from the requirements of the original agreement. The sewing thread industry in the United States supports hundreds of jobs at technically sophisticated facilities such as Unifi Manufacturing, Inc. in North Carolina and Milliken & Company in South Carolina.

With this change, these jobs, which had been at risk, will now have the potential to grow as regional usage of sewing thread increases. The other changes relate to the treatment of certain nightwear, as well as the “short supply” list in the CAFTA-DR and how several products are treated in the context of that list, including elastomeric yarns, knit waistbands and knit-to-shape components.

At the Free Trade Commission meeting, participants also agreed to increase the cumulation limits to encourage greater integration of regional production through limited reciprocal duty-free access with Mexico and potentially Canada to be used in Central American and Dominican Republic apparel, as called for under the CAFTA-DR.

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