The Dominican Association of Textile Industries (ADITEX) has asked the Directorate General of Customs to investigate the large volume of goods sold in the country with ‘Made in America’ labels, reports Diario Libre.
ADITEX president David Cortés said there is a suspicion that the items imported from the US may have origin in non-NAFTA countries, because these goods have very competitive prices even though the cost of production is higher in the US.
Mr. Cortés said the minimum wage in Dominican Republic for 8-hours daily work adds up to 473 pesos, while it is $58 in the US, which is equivalent to 2,514 pesos, or about 5 times the wage in Dominican Republic.
This creates a suspicion that many goods that come from the US may have been manufactured and ‘Made in America’ labels placed on them in a third country, he added.
By putting labels of American origin, goods from other nations that are not part of the Free Trade Agreement get away without paying any tax, decrease the customs revenue and also affect the Dominican garment manufacturing companies.
ADITEX president said that textiles and garments brought from the US or any other country which are part of DR-CAFTA are not subjected to taxes, but if they come from any other country with which Dominican Republic does not have a FTA, then such goods are subjected to a 20 percent tariff and 18 percent ITBIS (sales tax).
Mr. Cortés said ADITEX was deeply concerned at the situation, because it affects the development of the local textile and apparel industry that comprises of over 2,000 production units, including micro, small and medium enterprises in both formal and informal sectors, which employ more than 20,000 people.