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Dominican Republic a good example of globalization’s impact

 

If you’re wearing a pair of pants that have the label “Made in the Dominican Republic,” you might be long overdue for a new pair of slacks.

In 2002, South Florida’s top import from the Dominican Republic was the category men’s or boys’ suits, and the value of those imports was $693.10 million. The small Caribbean nation ranked second in the world for imports into the United States, trailing only Mexico.

Fast forward to 2015. The suit category remains among the top 10 imports into South Florida from the Dominican Republic but has slipped to No. 8.

But that’s not the whole story. The whole story is one of the impact of globalization. It’s the impact of China entering the World Trade Organization in 2001 — one year before what would, it turns out, be the peak year for South Florida imports of men’s or boys’ suits from the Dominican Republic. It’s the story of how the production of some goods — and apparel is as visible an example as any — can easily be shifted around the globe to take advantage of less expensive labor.

Through the first four months of 2015 — the most current Census Bureau data available — South Florida imports of men’s or boys’ suits from the Dominican Republic totaled $14.04 million. During the same four-month stretch of 2002, the year when the Dominican Republic imports peaked on an annual basis, the total was $177.82 million. That’s a 92.11 percent decrease. The total has fallen nine of the previous 10 years.

Today, in 2015, the Dominican Republic ranks not just behind Mexico. It ranks behind China — which supplanted Mexico in 2009 — Bangladesh, Vietnam, Italy, Indonesia, Nicaragua, India, Egypt, Cambodia, Pakistan, Sri Lanka, Canada, Haiti, Turkey and Honduras.

U.S. rank: As dreadful as that sounds, the story of Dominican trade with the United States, and with South Florida, is not dire, far from it. The Dominican Republic ranks No. 40 among the United States’ top trade partners this year, up three positions from this time last year, and up four positions from five years ago. A decade ago, through the first four months of 2005, it did rank slightly higher, at No. 36.

That doesn’t tell the whole story. The whole story is that trade with the Dominican Republic has only been higher one year — through the first four months of 2014.Trade this year is down a narrow 1.85 percent from the record year. What has changed slightly is the balance of that trade over the years. Where a decade ago, trade was fairly balanced, today it tilts toward the United States. A decade ago, 51 cents of every dollar in trade with the island was a U.S. export. This year, that total has risen to 62 cents.

South Florida trade: While U.S. trade with the Dominican Republic is down slightly, trade between the island and South Florida is up 3.48 percent and running at a record level. The balance of the trade shift has been minimal with South Florida, from 55 cents a South Florida export a decade ago to 56 cents this year.

Not only is trade with the Dominican Republic up when its trade with the United States is down; it’s up when South Florida trade with the world is also down. But it’s not all rosy. Dominican trade with South Florida is growing more rapidly than overall South Florida trade compared to a year ago and even five years ago — 27.31 percent to 24.51 percent — but not compared to a decade ago. Over the last decade, South Florida trade has increased 77.22 percent; Dominican trade has increased 29.94 percent in that time.

Importance to South Florida: A decade ago, the Dominican Republic was South Florida’s third most important trade partner, trailing only Brazil and Colombia. Today, it ranks No. 5. This is the fifth weekly column on South Florida’s top trade partners, with Brazil, Colombia, China and Chile covered in the four previous weeks.

So far in 2015, the Dominican Republic is accounting for 4.61 percent of all South Florida trade, the greatest percentage since 2009, the last year the market share topped 5 percent. The record year was back in 2002, when almost $800 million in suits entered South Florida and the Dominican market share of local trade topped 8 percent.

South Florida competition: South Florida has captured more than 40 percent of all U.S.-Dominican trade for two decades but never more than 50 percent. In 2015, the percentage was 43.40. New Orleans and San Juan were each at less than one-fourth of that total.

South Florida exports to the Dominican Republic: The top three exports this year are civilian aircraft, engines and parts; cellphones and related equipment; and computers. All three are down, with the aviation and computer categories down more than 10 percent and cellphone exports down 9.15 percent. Overall, exports to the Dominican Republic are off 2.59 percent. Bright spots? Motor vehicle parts, up 16.98 percent; motor vehicles, up 8.89 percent; and military aircraft engines and parts, up 23.82 percent. All are top 10 exports.

South Florida imports from the Dominican Republic: In addition to men’s and boys’ suits, five other apparel items remain in the top 15 from 2002, despite global shifts. T-shirts rank No. 3, leather shoes are No. 6 and bras are No. 7 in the top 10. Sweaters rank No. 13 and women’s or girl’s slips rank No. 14. Gone from 2002, when 11 of the top 15 were apparel-related, are women’s or girls’ suits, not knit (previously No. 4; currently No. 28), knitted women’s or girls’ suits (10; 44), knitted swimwear and track suits (11; 37), swimwear and track suits, not knit (12;18), men’s or boys’ underwear (13; 24), and men’s or boys’ knit shirts (14; 56).

 

-Via Miami Heralds

 

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