Sourcing Apparel from the CAFTA-DR Region—The Modern Cotton Story Podcast

Discussion questions:

  • What are the advantages and disadvantages of CAFTA-DR as an apparel-sourcing base for US fashion companies?
  • What are the key bottlenecks that prevent more apparel sourcing from CAFTA-DR members?
  • Do you support liberalizing the rules of origin or keeping the strict “yarn-forward” rules of origin in CAFTA-DR, and why?

Author: Sheng Lu

Professor @ University of Delaware

3 thoughts on “Sourcing Apparel from the CAFTA-DR Region—The Modern Cotton Story Podcast”

  1. After listening to the podcast, I learned that the CAFTA-DR market faces many advantages and disadvantages as trade agreements evolve and the market becomes a sourcing base for US fashion companies. One major con when looking into this agreement is that its growth has been very slow moving and even maybe degressive rather than progressive. An area that thrives in the CAFTA-DR market is top and bottom basic goods. Although basics make up the majority of the market in this trade agreement, they also limit product mix and variation, and could be part of the reason for their stunted growth in attempting to expand their sourcing volume.
    Expanding apparel sourcing and product offers in the CAFTA-DR market is not an easy feat. There are many bottlenecks that prevent this from happening. For example, the debate about yarn-forward rules of origin. On one hand, the rule makes it difficult for fashion companies to make add functional variety to their products because they only have access to the raw yarn materials available in the CAFTA-DR agreement. Meanwhile, taking away this rule and replacing it with say the fabric-forward rule could also prove to be detrimental to the yarn producers in this region’s agreement because there is no longer a secure market as fashion companies can source their yarns elsewhere. Overall, it is this tipping scale of what costs more, and how can we find the right balance to have the most winners and the least number of losers possible. Losers may think this is unfair, but as we know life is not fair.

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