The Dominican Association of Textile Industries (ADITEX) has raised concerns that a proliferation of goods being sold in the Dominican Republic with “Made in USA” labels are coming from countries not under a free trade agreement with the United States.
According to Diario Libre, ADITEX president David Cortés asked the country’s Directorate General of Customs to investigate the origin of the imports because the goods were found to have very competitive prices despite the higher costs of production in the U.S.
Minimum wage in the Dominican Republic is roughly 473 pesos ($11) for an 8-hour workday, while in the U.S., the rate for comparable work can be about five times more, Cortés said.
This creates suspicion that many of the goods purportedly coming from the U.S. are manufactured and labeled “Made in USA” in third countries, according to Cortés, and not in the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR) countries, which includes Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic.
By labeling the goods as though of American origin, non CAFTA-DR nations are skirting the 20 percent tariff on textiles and the 18 percent ITBIS (sales tax), decreasing Customs’ revenue, and ultimately, affecting development of the Dominican Republic’s textile industry.
Cortés said ADITEX is “deeply concerned” about the situation because of its potential impact on the country’s 2,000 production units, which generate more than 20,000 jobs in the local textile industry.
ADITEX has asked Customs to inquire about all goods entering the nation with a “Made in USA” label.