Cafta-rd

kevadair · #1 05-20-2009, 01:33 PM

I look pretty deep in the posts, but didn't see the thread about CAFTA-RD. How does this law affect imports. Specifically, we would like to import containers of used clothing to sell in a discount clothing program to local people who have to drive about 10 miles to get to the nearest place to buy discount clothing. We have groups that are gathering the clothing in the US. Is this tax-free under CAFTA? How do I apply for customs discounts under CAFTA?

Anyone have any experience with CAFTA in any industry? Please also share your story.

Robert · #2 05-20-2009, 02:15 PM

Take a look at our trade section for a massive amount of documentation of DR CAFTA

Dominican Republic Trade, CAFTA and Business Information

Mr. Lu · #3 05-20-2009, 02:16 PM

Yeah, what he said....

DR1 Trade

Mr. Lu

Expat-in-Cabarete · #4 05-20-2009, 02:25 PM

You may want to dig further than on this forum. Not long ago I read in the news that there is a bill (maybe it was passed already) to prohibit the importation of used clothes into the DR. DR Government trying to protect their textile industry.

kevadair · #5 05-20-2009, 06:13 PM

Anyone else have any details on a law that would limit the import of used clothing from the US? That doesn't sound like it would fit with a free trade agreement.

playacaribe2 · #6 05-20-2009, 06:31 PM

And be manufactured in a country that is a signatory to the Agreement.

Respectfully,
Playacaribe2

Quote:

Originally Posted by kevadair

Anyone else have any details on a law that would limit the import of used clothing from the US? That doesn't sound like it would fit with a free trade agreement.

Chip · #7 05-20-2009, 09:09 PM

Selling used clothes here is big business. You can go to any local market and find an over abundance of clothes that range from RD10 and up.

Mr. Lu · #8 05-20-2009, 10:52 PM

Quote:

Originally Posted by kevadair

Anyone else have any details on a law that would limit the import of used clothing from the US? That doesn't sound like it would fit with a free trade agreement.

It's a "fudgy" situation, that of "re-selling" used clothes. There was a law passed recently banning the re-sell of used clothes. This was done in part for a few reasons.

A) Because most of the re-sold used clothes (pacas) in the DR have been actual donations from NGO's and international organizations. Government would like to stop this practice.

B) In order to protect the local textile market. (Debatable)

C) A way to limit the "life" of local markets and basically close them down by default (Pulgas). These local markets are illegal and sprout up in odd places, including under highway overpasses (La Pulga)

So how do you get around this? Well, one option would be to purchase your clothes, provide proof you purchased them and import them to the DR.

But how do you fall under the DR-CAFTA? It's going to be hard to do/prove. Why? Partly because the agreement calls for all clothing, that qualifies for exemption, to have of a certain % of its components made in either the DR or US (or CAFTA countries). This has been partly affected by the rise/fall of the Asian textile markets, which forced the US Congress to re-evaluate its policy on DR made clothing in relation to trade.

Figure that this situation is also affected by the participation of the other Cafta countries and Mexico. Also note, that similar trade restrictions have been stipulated under the EPA (Economic Partnership Agreement) signed in 2008 between Caricom (of which the DR is a partial member) and the European Union.

Below is a link to a "semi" final version of the agreement: (DR-CAFTA)

DR-CAFTA

So unless you can prove your clothes and their origins it's tough imagine your project being exempt.

Some of my info could be correct, or incorrect. It's been a while since I've dealt with this info. If you are serious about this take the links provided and do your due diligence.

Good luck,

Mr. Lu

Chip · #9 05-21-2009, 01:49 PM

With all due respect to Mr Lu, if at some point the gov't limited the importation of used clothes their would be big time trouble. This is a mainstay of by far the majority of Dominicans and don't look for this to be happening in anybody's lifetime soon.

Also, I was trying to politely insinuate that there is very little fat (re profit) in this market. If you aren't sure drop me a line when you are in Santiago and I'll take you to one of the largest markets where the majority of the local people of lesser means buy their clothes.

Mr. Lu · #10 05-21-2009, 05:28 PM

Quote:

Originally Posted by Chip

With all due respect to Mr Lu, if at some point the gov't limited the importation of used clothes their would be big time trouble. This is a mainstay of by far the majority of Dominicans and don't look for this to be happening in anybody's lifetime soon.

Also, I was trying to politely insinuate that there is very little fat (re profit) in this market. If you aren't sure drop me a line when you are in Santiago and I'll take you to one of the largest markets where the majority of the local people of lesser means buy their clothes.

Read what I wrote. They aren't banning import of used clothes. They are banning the "re-sale" of used clothes, i.e. ("pacas") because a majority of them come from NGO's and charity organizations. They also want to discourage the development of popular markets (flea markets) like "La Pulga" in Santo Domingo. I understand this one is on the verge of being closed.

Like I said, if OP can prove purchase (that his used clothes didn't come from an NGO) and that their components were made in the DR or USA (or other CAFTA countries) then he has a legitimate and potential business. Otherwise, it's a no go.

Mr. Lu