Colombia's textiles and apparel industry has urged the Government to tackle a growing contraband trade, which now accounts for 30% of all clothing sold in the South American country.

Eduardo Botero, president of the National Institute for Exports and Fashion, said: "We have to end contraband once and for all and the government needs to introduce measures to do this."

He added tougher measures such as jail sentences and stricter customs controls must be implemented to end the activity and added the industry will collaborate at every step to eliminate the trade.

Botero said fighting contraband has never been more crucial especially as the industry battles with rising raw material costs from a hike in global cotton and other feedstock prices.

Botero added China's rising labour costs is making Latin America a more attractive destination for US apparel companies looking to source there.

He said Colombia has a "strong and innovative" industry that can attract more US investment. The country also produces more "value added" clothing that Central America which can compete through lower duty costs because of the DR-CAFTA agreement.

Nevertheless, Botero boasted Colombian exports should grow 20% this year and domestic consumption 4%, so the industry will have a strong year.

Last year, the industry's exports reached US$1bn, while the local market posted sales of $10bn. While Colombia has suffered from falling exports to its largest market Venezuela in recent years, these have been offset by growing sales to Ecuador, Peru, Mexico and the US, Botero said.

He also said Venezuela owes $80m to Colombian exporters which have had a hard time collecting receivables due to the two countries' tense political relations.