Maybe the odds makers in Las Vegas should start taking bets on when Mexico and Canada can start sending fabric to Central America to make clothing that returns to the United States duty-free.

Right now, even the most experienced trade attorneys, consultants and government insiders are perplexed. They’re uncertain when all the bureaucratic maneuverings will be finished to launch a textile provision called “cumulation.”

Cumulation is a part of the Dominican Republic–Central American Free Trade Agreement that allows set quantities of woven fabric, such as denim, cotton and bottom-weight fabrics, to be shipped from Canada and Mexico to the Central American region for production and then re-shipped to the United States duty-free. In December, a rules change made it possible for certain kinds of wool to be sent in unlimited quantities.

Sending fabric from Canada and Mexico seemed to be a simple addition to the free-trade agreement, particularly after each DR-CAFTA country agreed to the provision. The idea was to give Central American factories a leg-up when competing with Asian factories by having cheaper Mexican fabrics at their disposal.

Optimists were predicting that fabric would be flowing from Canada and Mexico to Central America by March, and then the whole issue got bogged down in the Dominican Republic over a pocket-lining change. “I thought it would be March. But March came and went, and now I’m thinking July 1. But I haven’t stopped taking those bets,” said Jonathan Fee, a trade specialist and partner in the Washington, D.C., law firm Alston & Byrd.

Pocketing the blame

U.S. trade officials decided it would be less confusing to implement the cumulation agreement and the pocket lining changes at the same time.

Originally under the free-trade accord, pocket lining could come from outside the DR-CAFTA region. But changes promised to several U.S. senators and congressmen in order to push DR-CAFTA through Congress in 2005 resulted in the stipulation that pocket lining would come from only regional fabrics with a yarn-forward provision. Pocket lining is a profitable venture for U.S. companies. The U.S. International Trade Commission found that the United States produces $80 million to $200 million worth of pocketing annually, most of it sent to Central America for input.

Almost every country in the trade agreement has signed off on the pocketing rule change except for the Dominican Republic. Currently, the provision is mired in that country’s legislature. The Dominican Republic’s Senate on March 25 approved the pocketing change, but the lower house, known as the Chamber of Deputies, is stalling, U.S. governmental officials said.