President Bush has signed a Central American Free Trade Agreement (CAFTA) granting trade
preferences to Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua the Dominion Republic is
expected to be added later this month. The pact, which must be approved by Congress, is strongly
opposed by the US textile industry, but it enjoys equally strong support from the importing
community. In view of its controversial nature, the agreement is not likely to be considered by
Congress until next year.
Describing signing of the agreement as a momentous occasion, Kevin Burke, president of the
American Apparel and Footwear Association, said CAFTA is the only opportunity available to support
US exports of textiles and fabrics to the region and retain, as well as possibly bolster, demand in
the region for US textile inputs. While expressing disappointment that CAFTA does not go far enough
in liberalizing trade, Laura E. Jones, executive director of the United States Association of
Importers of Textiles and Apparel, said the agreement will preserve textile jobs in the Western
Hemisphere. While the world is changing dramatically on January 1, when quotas are finally phased
out, the partnerships and commercial alliances created because of CAFTA will encourage textile and
apparel manufacturing operations to remain in Central America and in the United States.US textile
manufacturers remain opposed to CAFTA because of the way it will permit use of some yarn and fabric
from non-participating countries.
June 2004
