Fernando Capellán, president of the Dominican Association of Free Zones said that declining sales and the general slow down in the US economy will impact the rate of growth and development of Dominican free zones industries in the short range. He highlighted that the United States imports 90% of the production of Dominican free zones and 98% of apparel exports. Capellan was the guest speaker of the American Chamber of Commerce luncheon held yesterday. He also said that the elimination of quotas as per new rulings of the World Trade Organization by 31 December 2004 is a challenge the nation must meet. He said the biggest challenge though is to take advantage of the present elimination of quotas that authorizes free export of products to nations with greater technological advances, vertical integration, stronger industrial tradition and lower costs. At the luncheon, vice president of Adozona, Jose Clase also warned that the DR needs to be prepared to compete. He said that local industries are threatened by perspectives of cost increases at a time when US President Bush has given his support to granting similar textile parity trade conditions the DR enjoys to Colombia. "We need to be very aware that the sector cannot continue absorbing the increases in costs, we can not resist every day increasing energy bills, nor the social security costs as have been proposed," he said. During the talk, Capellán highlighted the present state of affairs of the free zone sector in the DR. He said that free zone exports last year reached US$4,771 million, for a 10% increase over 1999. This was 80% of the total exports of the country last year. He said the industry deposited US$1,000 million at the Central Bank, up 15% over the previous year. Likewise, the sector employed 194,000 people in the 490 free zones that operate in 46 industrial parks in operation. Free zone industries purchased goods and services for more than RD$4,950 million on the local market in year 2000. Free zones paid their workers RD$12,000 million last year, which injected an average of RD$1,000 million per month into the economy. Capellán highlighted the multiplying effect of the investments and free zone sector expenditures. He said that for every direct job created, two additional jobs are created outside of the free zones. He also commented that the trend towards diversification of free zone production continues. While free zone apparel industries at one time made up more than 75% of all free zone companies, their prevalence has dropped to 56%. He said that in 1999, the National Council of Export Free Zones approved the installation of 74 new companies, of which only 27% were apparel manufacturers. New emerging companies such as services, technology, warehousing, distribution, food products and plastics are now being installed reducing the nation’s dependency on one industry. <\/p>\n","protected":false},"excerpt":{"rendered":"
Fernando Capellán, president of the Dominican Association of Free Zones said that declining sales and the general slow down in the US economy will impact the rate of growth and development of Dominican free zones industries in the short range. He highlighted that the United States imports 90% of the production of Dominican free zones … <\/p>\n