Although the North American Free Trade Agreement, between the United States, Mexico and Canada, is the granddaddy of most of our free-trade agreements (FTAs), the textile portion of these treaties are different. Therefore, you must study the differences, especially when it comes to NAFTA versus the Dominican Republic–Central American Free Trade Agreement, which encompasses the United States, Guatemala, Nicaragua, El Salvador, Honduras and the Dominican Republic. (Costa Rica still hasn’t joined yet.)

At this point, Nicaragua is still considered an “underdeveloped” country. That means third-party-country raw materials from outside the region can be cut and assembled with the finished product entering the United States duty-free. There are restrictions as to quantities and the use of thread. So I advise you to use a U.S. customs broker who is qualified in textile and apparel regulations to sort things out.

Sleepwear and brassieres in all DR-CAFTA-qualified countries can also use third-party-country raw materials to be cut and assembled. The finished product also enters the United States duty-free. Please check the exact HTSUS, or Harmonized Tariff Schedule, of the United States number where this is applicable.

Costa Rica is still in the final approval stages of the DR-CAFTA treaty. Therefore, check to make sure you are qualified to import textiles and apparel duty-free.

Logistics regarding freight into the United States may use U.S. ports that you are not familiar with, so make sure your freight forwarder and U.S. customs broker understand the total program. Time of actual freight delivery (shipping, clearances and costs) may differ greatly.

Due diligence, infrastructure and a complete understanding of NAFTA and DR-CAFTA regulations are necessities.

Research the alternatives

With various free-trade agreements in place now, there are plenty of options to manufacturing in China, especially with the protectionist attitudes toward that country.

With all of the variables involved in producing in China, such as safeguards, anti-dumping measures, quotas, protectionist legislative bills, export restrictive tariffs on U.S. products, currency valuations, bilateral trade restrictions, political unrest in many nations and consolidation of large retailers, the wisest business move is to make sure you have alternative sources for your products.

Look at Sri Lanka, Mexico, Central America and the Dominican Republic, Chile, Peru, India, Thailand, Bangladesh, the African countries that make up the African Growth Opportunity Act, Turkey, and the Jordan free-trade zone, as well as others.

Do your homework and determine how you can remain competitively priced and still produce quality goods and have on-time delivery.