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Canadian change in textile rules of origin is good news for Dominican exports

Haiti and the Dominican Republic stand to gain big from a recent change in the Canadian rules of origin for general preferential tariffs. The new measure is expected to bring a significant increase in the export market for Dominican free zones to the Canadian market for t-shirts and pants.

The change follows months of joint efforts on behalf of the Ministry of Foreign Relations, the Dominican Republic Embassy in Canada and the National Free Trade Zone Council, in coordination with the Haitian Embassy in Canada. The new trade scheme came into effective on 12 July 2017.

The amendment changes the Preferential Tariffs and Rules of Origin Tariff Rules for Least Developed Countries to expand the range of textile products that would benefit from the duty free treatment. Haiti and the Dominican Republic stand to benefit the most from the amendment.

Canada has ruled to allow Haiti to use raw materials and to carry out production in a greater number of countries for the manufacture of t-shirts and pants. This provision applies to joint production in apparel plants operating in the Dominican Republic and Haiti.

Dominican companies that have joint production plants with Haiti are now able to supply any type of raw material or service for the production of textile manufacturing products (packaging, fabric cutting, yarns and fabrics, for example), as long as together the added value added by the country does not exceed 75% for the production of t-shirts and pants in Haiti.

The Canadian general preferential tariffs change expands a prior 2002 provision that called for support countries falling under the United Nations’ category of Least Developed Countries (LDCs).

Haiti is the only nation in the Americas in this category. Nevertheless, up to now, Haiti has been unable to take advantage of the LDC mechanism the same way countries such as Bangladesh has. For instance, at the beginning of the program Bangladesh exported US$100 million in textiles to Canada, and in 2016 its exports exceeded US$1 billion.

Source: DR1, gazette.gc.ca

Aug 8, 2017

Category: DR News |

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Last updated August 15, 2017 at 6:47 PM
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