Impact of textile raw material access on CAFTA-DR members’ apparel exports to the United States: a quantitative evaluation

Abstract

This study quantitatively evaluated the impact of textile raw material access on Dominican Republic-Central America Free Trade Agreement (CAFTA-DR) members’ apparel exports to the United States. Results from the computable general equilibrium (CGE) model show that improving CAFTA-DR garment producers’ textile raw material access would significantly enhance the price competitiveness of their apparel exports to the United States and increase the export volume. However, improving CAFTA-DR garment producers’ textile raw material access would primarily benefit Asian textile suppliers but result in CAFTA-DR members’ reduced dependence on the U.S. textile raw material supply. The study’s findings provided new insights into the textile and apparel trade patterns in the Western Hemisphere and offered valuable inputs contributing to the public policy debate on expanding U.S. apparel sourcing from CAFTA-DR members from a unique supply chain perspective.

Keywords:

• CAFTA-DR
• U.S. textile industry
• trade policy
• Western Hemisphere
• textile apparel supply chain

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1 Unless otherwise specified, in this study, ‘apparel industry’ refers to Standard International Trade Classification (SITC) code 84 and ‘textile industry’ refers to SITC code 65 (UNComtrade, 2022).

2 This study investigates U.S. apparel sourcing from other CAFTA-DR members. To avoid confusion, unless otherwise specified, in this study, ‘CAFTA-DR members’ and ‘CAFTA-DR countries’ refer to El Salvador, Guatemala, Honduras, Nicaragua, the Dominican Republic, and Costa Rica and do not include the United States.