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Political Crisis In Honduras Disrupts CAFTA-DR Trade

James A. Morrissey, Washington Correspondent

Trade associations representing fiber, textile and apparel manufacturers and importers have made an urgent appeal to Secretary of State Hillary Clinton to step up diplomatic efforts to restore commercial traffic with Honduras, as the political crisis in that country is disrupting trade throughout the United States and Central America.

In a letter sent to Clinton, with copies to Secretary of Commerce Gary Locke and US Trade Representative Ron Kirk, the associations said the political crisis has caused commercial traffic to falter dramatically and, as a result, US textile and apparel plants already are being idled. The letter said: "We urge the US government to work with the Honduran government in order to ensure that commerce is fully restored in the region before the textile and apparel sectors of the US and Central American region are further harmed."

The associations pointed out that there is an interconnected manufacturing chain whereby man-made fibers and cotton are spun into yarn at US plants and shipped to Honduras, where they are made into fabric, and then the fabric is made into apparel in Honduras or shipped to another Central American country. Under the Central America-Dominican Republic Free Trade Agreement (CAFTA-DR), the apparel enters the United States duty-free. Honduras is the largest producer of apparel products in the CAFTA-DR region, each month shipping more than 40 million garments to the United States containing fabric made of US fiber and yarn.

The associations point out that if any of these segments is curtailed -- as is happening with Honduras -- work quickly stops elsewhere.

US textile and apparel trade with CAFTA-DR countries already has fallen off as a result of the global recession, and the associations pointed out that since January, the region has lost $1 billion in textile and apparel orders. The associations say retailers and other importers of textiles and apparel are making contingency plans to obtain products from Asia if the disruption is not soon resolved, and they say that will wipe out the benefits of  US/Central American trade.

Signing the letter were the American Apparel & Footwear Association, the American Manufacturing Trade Action Coalition, the National Council of Textile Organizations, the National Textile Association, the National Cotton Council, and the US Association of Importers of Textiles and Apparel.

September 29, 2009