Rethinking CAFTA-DR’s Rules of Origin
Intricate strands tie the phenomena of migration to the policies of trade, a linkage emphasized in recent research by Raymond Robertson and Kaleb Girma Abreha from Texas A&M University. Their study, scrutinizing the intersection of U.S. trade decisions and immigration, suggests that nuanced alterations to trade agreements could considerably reduce the number of migrants at the southern U.S. border. Delving into the specifics of the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR), they point out the restrictive nature of the “triple transformation” rule — an edict compelling garments to be composed of regionally-sourced materials only if they are to benefit from free trade perks.
This rigorous regulation has inadvertently shackled Central America’s economic potential, especially within its apparel sector. The stringent conditions prevent modern fabrics, which are omnipresent in global markets but scarce locally, from being included in the agreement, curtailing growth opportunities. Such policies not only diminish trade efficiencies but also leave a trail of economic instability in regions fertile for job creation, fueling the root causes of migration. The authors advocate that easing these stringent rules could have an expansive impact on investment and employment in the region, with a particular boon for the apparel industry.
Job Growth vs. Migration
Robertson and Abreha’s study suggests that easing certain regulations could create up to 257,500 direct jobs in Central America, potentially curbing immigration to the U.S. by up to 67%. This not only bolsters the apparel industry but also stimulates ancillary job markets. These findings indicate that addressing the root causes of migration, like lack of employment, could be more effective than focusing solely on border control. The results imply that trade agreements should aim to transform the economic realities in participating nations, not just increase trade. Refining economic policies appears as a crucial approach in the broader context of immigration reform, presenting an opportunity to tackle the issue at its source by fostering job creation that can dissuade potential emigrants from leaving their home countries.
