Logistic & Trade Center

The Role of the Dominican Republic in the Global Value ChainInvestment and Trading Partner for the US Market

Arturo PegueroDirectorLogistics & Trade Center

May, 2015Washington, D.C.

Logistic & Trade Center

Dominican Republic at a Glance

6.6

5.3 5.24.8

4.03.6

0

1

2

3

4

5

6

7

Panama DominicanRepublic

Bolivia Colombia Paraguay Peru

Top Latin America Countries by GDP Growth(GDP Growth Rate in 2014)

Source: IMF

Logistic & Trade Center

Dominican Republic at a Glance

2,208

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2010 2011 2012 2013 2014

Foreign Direct Investment (FDI)

Value (US$millions)

Year Index

2010 6.2

2011 7.7

2012 3.9

2013 3.9

2014 1.6

Source: Central Bank DR

Inflation Rate

9,919

-

2,000

4,000

6,000

8,000

10,000

12,000

2010 2011 2012 2013 2014

Exports of Goods

Value (US$millions)

Logistic & Trade Center

Jumping into Globalization: USA FTAs

Western hemisphere:

12 countriesRest of the world:

8 countries

Logistic & Trade Center

Jumping into Globalization: DR

Free Market Access Potential Export Market Population872 million of consumers

DR-CAFTA370 million

EPA502.5 million

Logistic & Trade Center

Competitive Advantages

• Among the only 6 Countries in the world with preferentialmarket access to both the U.S. and EU.

• 7th Largest trading partner with the U.S. in the WesternHemisphere

• Implementation of large-scale reforms creating and idealinvestment climate

• Unique close collaboration between governments and privatesectors U.S.-DR.

• FDI more than 11 billion in 4 years

Logistic & Trade Center

The Manufacturing Export Sector: Free Trade Zones

46 48 58 70

481

551

650

765

0

100

200

300

400

500

600

700

800

900

2000 2010 2015 2025

Number of Parks Number of Companies

2,907.40

4,770.60

4,217.60

5,602.0

10,865.9

0.00

2,000.00

4,000.00

6,000.00

8,000.00

10,000.00

12,000.00

1995 2000 2010 2015 2025

Exports (in US$ million)

Expon. (Exports (in US$ million))

Main Indicators

Source: National Free Zones Council/Logistic & Trade Center

Logistic & Trade Center

FTZ Export Manufacturing & Global Services

Main Activities 2014

Other

Services

Cigars and Tobacco/Agribu

siness

Textiles and Apparel

Commerce

Footwear

Medical and Pharmaceutical

Electric and Electronic

Source: National Free Zones Council

Logistic & Trade Center

Where do the Companies Come From?

Country of Origin of Investment in FTZ2014

Source: National Free Zones Council

USA49%

Dominican Republic

22%

Europe15%

Canada8%

Asia1% Other

5%

Logistic & Trade Center

Labor Market Productivity Evolution

Source: National Free Zones Council

24,678.25

34,190.89

0.00

5,000.00

10,000.00

15,000.00

20,000.00

25,000.00

30,000.00

35,000.00

40,000.00

2004 2014

Exports per Employee (Output) in US$

5th. US supplier of leather footwear

4th. US supplier of

medical/surgicalinstruments

1st. Exporter of

Cigars in the World

3rd. US

supplier of wool coats for women

2nd. US supplier of

circuit breakers

1st.US

supplier of ostomy appliances

2nd. US supplier of

dental floss

Logistic & Trade Center

USA Footwear Imports from Top Suppliers

Source: FDRA, 2014

Logistic & Trade Center

USA Apparel Imports from Selected CountriesA

sia

Rank Country Trend

1 China ↓

2 Vietnam ↑

3 Bangladesh ↓

4 Indonesia ↓

6 India ↑

8 Cambodia ↓

10 Sri Lanka ↑

12 Pakistan ↓

16 Philippines ↓

17 Thailand ↓

Lati

n A

me

rica

an

d t

he

C

arib

bea

n

Rank Country Trend

5 Mexico ↑

7 Honduras ↑

9 El Salvador ↑

11 Nicaragua ↑

13 Guatemala ↑

18 Haiti ↑

20 Dom. Rep. ↑

21 Peru ↑

Source: USA Department of Commerce, 2014

Back to America? ..Relocation

Logistic & Trade Center

Top USA Global Medical Device Companies “#1 Medical Device manufacturer in the World. Every day,millions of people around the world enjoy the benefits ofproducts from the Johnson & Johnson Family of Companies.

“Manufacturing and worldwide logistics company. Fortune 500 (#22). Helps pharmacies, hospitals, clinical laboratories and physicians focus on patient care.”

“A leader in healthcare for more than 80 years. Baxter assists healthcare professionals and their patients with treatment of complex medical conditions. Information on our business, leadership and history are available here.”

Logistic & Trade Center

Top USA Global Electronic Manufactures Companies

“Eaton knows our customers demand a wide range of products and solutions to help them keep power flowing to their homes and businesses. Our Cutler-Hammer surge protection devices provide protection against the damaging effects of lightning, utility switching and switching electric motors.”

“GE Energy Management designs technology solutions for the transmission, distribution, management, conversion and optimization of electrical power across multiple energy-intensive industries. ”

“Rockwell Automation, the world's largest company dedicated to industrial automation and information, makes its customers more productive and the world more sustainable. Throughout the world, our flagship Allen-Bradley® and Rockwell Software® product brands are recognized for innovation and excellence.”

Logistic & Trade Center

Top USA Global Apparel and Shoes Companies

Logistic & Trade Center

The Best Premium Cigars of the World