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changes in global trade rules for textiles and apparel implications for the dominican republic

1. Changing trade environment. The WTO Agreement on Textiles and Clothing (ATC) will eliminate quotas on US imports January 1, 2005Preferential trade agreements are expanding--other countries are joining the club (e.g., AGOA and ATPDEA)US free trade agreements are increasing (e.g., Chile, Singapore, Southern Africa, CAFTA etc.).

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changes in global trade rules for textiles and apparel implications for the dominican republic

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    1. Changes in Global Trade Rules for Textiles and ApparelImplications for The Dominican Republic

    2. 1

    3. 2 US imports from theDominican Republic

    4. 3 US Imports of apparel from the Dominican Republic 2002

    5. Phase-out of Quotas A Major Benefit Will End in 2004

    6. 5 Dominican Republic exports will be subject to more competition Clothing items included in the 28% were 1-Brassieres, 2-Cotton hosiery, 3-Babies garments.Clothing items included in the 28% were 1-Brassieres, 2-Cotton hosiery, 3-Babies garments.

    7. 6 Products exposed to a high risk of quota elimination

    8. 7 Tariff equivalents of quotas and tariffs on selected quota constrained countries

    9. 8 Impacts of US quota phase-out:assumptions Adjustments are long term (1-3 years) Buyers can find new sellers Unprofitable producers close No trade remedies (antidumping or safeguards) No major shifts in exchange rates Costs such as labor, fabric and transportation remain the same

    10. 9 Impacts of US quota phase-out:Exports

    11. 10 Impact of quota phase-out: direct employment

    12. 11 The importance of China China will likely account for up to up to half the impacts of quota removal The U.S. may apply China specific safeguards to counter import surges from China China safeguards could provide up to a three year window for the Dominican Republic to adjust to competition in a quota free world

    13. US-CAFTA Scenarios: Implications for the Dominican Republic Answer to a Problem?

    14. 13 US apparel imports from Dominican Republic and Central America

    15. 14 US applied duties under the Caribbean Trade Preference Act

    16. 15 US applied duties under the Caribbean Trade Preference Act

    17. 16 Impacts of US-CAFTA and quota phase-out: assumptions Adjustments are long term (1-3 years) Buyers can find new sellers Unprofitable producers close No trade remedies (antidumping or safeguards) No major shifts in exchange rates Materials costs do not change as a result of new rule of origin Non-preferential trade can be converted to duty free

    18. 17 Impacts of US-CAFTA and quota phase-out: exports

    19. 18 Impacts of US-CAFTA and quota phase-out: direct employment

    20. 19 Impacts of US-CAFTA: rules of origin determine material inputs Fabric can comprise 50% or more of trousers’ factory gate price Regional fabrics (Central American or local) could reduce material costs and provide a broader input base

    21. 20 Impacts of US-CAFTA and quota phase-out: exports

    22. Adjusting to the New Trade Environment

    23. 22 The post quota market for apparel What will the post quota world look like and how can the Dominican Republic prepare for it?

    24. 23 The post quota market for apparel According to a survey by the Department of Commerce, U.S. apparel buyers plan to reduce by half the number of producers from whom they source apparel soon after quotas end Buyers are indicating that they require the value-added services of large apparel firms such as design shops, floor-ready merchandise and full-package production

    25. 24 Adjustment strategies Clustering of small and medium sized firms Improving knowledge of regional fabric sourcing Diversifying products away from categories with significant quota protection to products with significant tariff protection

    26. 25 Adjustment strategies Insuring new customs regulations are efficiently implemented (24 hour rule, Container Shipment Initiative, Customs Trade Partnership Against Terrorism) Engaging in free trade negotiations and ensuring that negotiated provisions benefit the Dominican Republic

    27. 26 Adjustment strategies Insuring new customs regulations are efficiently implemented (24 hour rule, Container Shipment Initiative, Customs Trade Partnership Against Terrorism) Engaging in free trade negotiations and ensuring that negotiated provisions benefit the Dominican Republic

    28. 27 US applied duties by fiber and fabrication

    29. 28 Selected US imports with high duties

    30. Dominican Republic Apparel Export Performance Answer to a Problem?

    31. 30 US import market shares:cotton trousers

    32. 31 US imports of cotton trousers 1997-2002

    33. 32 US imports of cotton trousers 1997-2002

    34. 33 US Import Market Shares: Cotton Underwear

    35. 34 US import market shares: synthetic trousers

    36. 35 US import market shares: cotton knit shirts

    37. Effects of Quota Elimination on Support Garments Answer to a Problem?

    38. 37 US Imports of support garments Brassieres, girdles and other body support garments were integrated into the WTO in 1998, so constraining quotas were removed principally from South East Asian countries (Thailand, Indonesia, Malaysia, and Singapore) Quotas remained on China up to January 2002 when they were removed

    39. 38 US imports of support garments 1997-2002

    40. 39 US import market shares:support garments

    41. 40 US imports of support garments 1997-2002

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