President Bill Clinton ruled that the Dominican Republic is now eligible for the Caribbean Basin Trade Partnership Act (CBTPA). The trade bill which is now in effect cuts tariffs on a wide range of imports, largely textiles and apparel. The DR now regains the competitive status it had under the Caribbean Basin Initiative and it had lost when Mexico received superior trade benefits as a signatory of the North American Free Trade Agreement. Under CBTPA (CBI Enhancement Bill) the DR will receive immediate tariff reduction to NAFTA levels for exports to the US now excluded under CBI. It is also granted duty-free, quota-free treatment for specific types of apparel depending on the origin of the fabric or yarn. The new law is expected to result in 35,000 new jobs and US$1,000 increase in exports in the first year. In the DR already more than 40 companies have set up operations in the first six months of the year as part of the expected surge in production and exports the Act is generating. In the first year of benefits, Dominican textile exports to the US are expected to grow by 20% to US$4.5 billion per year. Fernando Capellán, president of the Dominican Association of Free Zones commented that in the next four years the new legislation could create at least 65,000 new jobs in apparel. He said the DR now needs to put into place procedures to improve the country’s competitiveness to be able to attract the new free zone business and take maximum advantage of the benefits provided by the new legislation.
