Apparel Production in the Caribbean: A Classic Case of the New International Division of Labor

Abstract

An international division of labor now exists in textile and apparel production. Epitomizing this movement, the Caribbean Basin has become the fastest growing apparel assembly region for U.S. firms. This paper describes tariff and quota provisions that make the Caribbean countries desirable sites for U.S. apparel assembly operations, thus enabling U.S. manufacturers to compete more effectively with low cost imports from non-Caribbean countries. The evolution of special tariff and quota provisions for the Caribbean region is examined. Special trade provisions include 807 production (now 9802 in the Harmonized Tariff Schedule), the Caribbean Basin Initiative (CBI), and Guaranteed Access Levels (GALs) under 807A (now 9802.80 10 2 in the Harmonized Tariff Schedule). The Enterprise for the Americas Initiative is also considered. This paper examines the impact of each of these provisions and explores the implications for the U.S. textilelapparel complex and for the economic development of select Caribbean countries. Costs and benefits to both investor/parent firms and host countries are examined. The effect of paid employment in the apparel industry on the role and status of Caribbean women is considered briefly.

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