Several business associations have announced the development of a plan which seeks, amongst other things, to improve competition in the textile industry, to vertically integrate the manufacture of clothes, and to increase promotional efforts to encourage fresh investment in the free trade zones. The move comes as a response to the loss of business in this sector following the implementation of the North American Free Trade Agreement (NAFTA). This treaty has eroded the preferential treatment enjoyed by Caribbean nations in the U.S. market through the Caribbean Basin Initiative (CBI). A considerable number of clothing manufacturers and assemblers have moved their operations from the Dominican Republic to Mexico, where they have access to more favorable conditions. Mexican exports of clothing grew by a whopping 70 percent last year as a result.
Steps taken by the Dominican Republic in conjunction with the Caribbean Economic Community (CARICOM) to persuade the U.S. Congress to pass a textile parity law have proven futile to date. The Dominican business community is coming to terms with the painful reality of having to find alternative ways to offset the adverse effects of NAFTA without the aid of a parity law. Exporting textile to Canada is viewed as a viable option under the present circumstances. To this effect, the Dominican authorities and free trade zone representatives have initiated contacts with the Canadian government to continue to develop the free trade model and gain preferential conditions through Canada’s participation in NAFTA. The Dominican Republic is still one the Western Hemisphere’s largest exporters of clothes to the U.S. market.