Publication Number: 3946

Report Title: Probable Economic Effect of Modifications to DR-CAFTA Rules of Origin and Tariffs for Certain Apparel Goods

Investigation Number: DR-CAFTA-103-16

Author's name(s): George Serletis, Laura Rodriguez, Joanna Bonarriva, Dan Cook, Kimberlie Freund

Date Published: September 2007

Report Description/Introductory Text: This report assesses the probable economic effect (PE) of modifications to the rules of origin and tariff treatment in the Dominican Republic-Central America-United States Free Trade Agreement Implementation Act (DR-CAFTA) on certain apparel goods, as set forth in letters of understanding signed in 2006 with the Dominican Republic and Costa Rica. Overall, the modifications will likely have a negligible impact on U.S. production and trade in the subject apparel goods because the DR-CAFTA region is not a major source of the subject apparel goods and these goods typically do not compete with domestically produced articles. The rules change requiring the use of pocket bag fabric produced in the territory of one or more of the Parties to the FTA, however, will likely help slow the decline in existing U.S. production and exports of pocket bag fabric to the DR-CAFTA region (Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua). It will also possibly help slow the growth in U.S. imports from Chinese and other lower-priced Asian suppliers that accelerated with the elimination of quotas on textile and apparel goods on January 1, 2005.

Topics Covered: DR-CAFTA, rules of origin modifications, pocket bag fabric, textiles, apparel, tariff modification, tariff treatment, tariff preference level, swimwear, cumulation for wool, coarse-micron worsted wool apparel, single transformation

Countries: Dominican Republic, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua

HTS Numbers: 61, 62

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