New Trade Rule for Fabric: What It Means for CAFTA-DR Businesses

You might care about this because the U.S. government has made an important decision affecting textile trade with Central American countries. The Committee for the Implementation of Textile Agreements, or CITA, decided that a specific type of fabric cannot be found in enough quantities, or fast enough, within the countries that are part of the Dominican Republic-Central America-United States Free Trade Agreement, known as CAFTA-DR. This agreement aims to encourage trade among member nations. Normally, to get special tariff benefits under CAFTA-DR, products must use materials made within these countries. However, if a material is not commercially available there, it can be added to a special list called Annex 3.25. Once on this list, businesses can import that material from outside the CAFTA-DR region without losing the trade benefits for their finished products. CITA's recent decision means that a certain double weave polyester and spandex fabric is now on this list. This change helps textile and apparel makers who need this particular fabric for their products. This ensures they can still take part in the free trade agreement benefits even when sourcing this specific material from other places. This decision is particularly interesting because it shows how trade agreements can adapt to real-world business needs. The CAFTA-DR agreement encourages using materials from within the member countries. But sometimes, a specific material is simply not made there in the quantities or at the speed that businesses require. When this happens, a company can ask for an exception. In this case, a company called Varsity Pro LTDA DE C.V. requested that the double weave polyester and spandex fabric be added to the Annex 3.25 list. CITA looked into this request and found that no company within the CAFTA-DR region could reliably supply the fabric. This process involved public comments and even a meeting with the requesting company and another potential supplier. By adding this fabric to the list, CITA helps maintain fair trade conditions and supports manufacturers who rely on this fabric, even if it has to come from outside the immediate free trade zone. It highlights a practical side of international trade policy. This legal document would be most interesting to businesses involved in the textile and apparel industry. Specifically, manufacturers who operate in or trade with countries like the Dominican Republic, Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua will find this very relevant. Companies that use specialized fabrics like polyester and spandex blends in their clothing production will want to know about this change. Trade policy experts and anyone studying how free trade agreements function and adapt to market realities will also find value in this document. Importers and exporters dealing with textile components will need to be aware of this update to ensure they follow the rules and access the correct tariff benefits. Essentially, anyone involved in the supply chain for textiles within the CAFTA-DR trade area should pay attention to this decision.