WASHINGTON — December 10, 2024 — National Council of Textile Organizations (NCTO) President and CEO Kim Glas issued a statement today on the Biden administration’s initiation of a Section 301 investigation into Nicaragua’s acts, policies, and practices related to human rights, labor rights, and rule of law.
National Council of Textile Organizations President and CEO Kim Glas issued the following statement:
“The U.S. textile industry strongly condemns the actions of Nicaraguan President Daniel Ortega and Vice President Rosario Murillo as detailed by the Biden administration in announcing the launch of a Section 301 investigation today. We support upholding the fundamental principles of human rights, labor rights, and rule of law enshrined in all free trade agreements with the United States, and we appreciate that there should be repercussions for the Ortega-Murillo regime targeted towards eliciting meaningful reforms to adhere to these principles.
While we acknowledge that there should be consequences for violations of these principles by the Ortego-Murillo regime, we ask that any response by the Biden administration be carefully calibrated. The U.S. trading relationship with Nicaragua does not exist in a vacuum given the interconnected nature of the U.S.-Central American textile and apparel supply chain. Nicaragua is part of the U.S.-CAFTA-DR agreement, and these partner countries are part of a critically intertwined regional textile and apparel production chain supporting hundreds of thousands of jobs and economic development in this sector.
Specifically, the U.S. textile industry exported nearly $350 million of textile and apparel products directly to Nicaragua last year, making it the third largest export destination in the CAFTA-DR region. Furthermore, many in the U.S. textile industry export yarns and fabrics to other countries in the region such as Honduras and Guatemala for fabric formation and/or finishing before being shipped to Nicaragua for final assembly.
Additionally, there is $1.1 billion in two-way textile and apparel trade primarily between the Northern Triangle countries and Nicaragua to make apparel for the U.S. market. These intra-regional shipments, combined with U.S. exports to Nicaragua, represent an estimated $1.5 billion in overall trade of textile inputs within the coproduction chain among the U.S., Nicaragua, and the rest of the CAFTA-DR region.
Any U.S. penalty actions against Nicaragua should be leveled at those directly responsible for the abuses and not in a manner that harms working people. Notably, the textile and apparel sector is the largest employer of women in Nicaragua. Furthermore, placing 301 tariffs on textile and apparel trade with Nicaragua would in effect reward China by bolstering their competitive position relative to the CAFTA-DR region.
Destabilizing the U.S.-CAFTA-DR production platform would have serious implications for U.S. and regional workers, migration, economic development, and pending and future investment. We stand ready to assist the U.S. Trade Representative’s office as it conducts its investigation and will further engage in the public comment process to promote a policy response that advances and balances shared values of fairness, opportunity, and economic stability in the Americas.”
Posted: December 10, 2024
Source: National Council of Textile Organizations (NCTO)
