Jerry Haar, Professor of international business management at Florida International University looks into the issue of whether Central America and the Dominican Republic, signatories of DR-CAFTA, can compete in today’s globalized World. He makes these observations after attending the December Miami Conference on Central America and the Caribbean that he describes as “the most upbeat in years”.
“Clearly, the region has indisputable advantages. These include political and macroeconomic stability, a long-standing trade and investment relationship with the U.S. and close proximity to the region’s major export market, relatively inexpensive labor, and agricultural/agribusiness and manufacturing diversity.
He comments that the DR-CAFTA agreement locks in tariff advantages thereby dissuading existing foreign producers in the region from migrating to Asia. He comments that textile firms currently operating in the region can avail themselves of a special DR-CAFTA clause that allows them to claim a refund of past duties dating back to January 2004.
“With shipping times to the U.S. only five days from El Salvador versus four weeks from China, time-sensitive and “taste-sensitive” garments both have a competitive advantage over Asia, as does higher-end apparel in which pricing makes the manual labor factor less of an issue. Specialty goods-particularly agribusiness products-enjoy great potential for exports within Central America, Mexico, and the U.S., especially in light of the growing demand for ethnic foods.
See http://www.latinbusinesschronicle.com/reports/columns/0106/haar.htm