GUATEMALA: Textiles sector loses $160m from CAFTA delays
Delays in signing the Central American Free Trade Agreement (CAFTA) have cost Guatemala's textiles industry US$160m in uncommitted investments, Carla Caballero, general manager for Guatemalan Apparel and Textile Industry Commission (VESTEX), confirmed to just-style on Thursday (27 April).
"We are asking the government to pass the [CAFTA] implementation law immediately," Caballero said, adding that congress was supposed to approve the text on 26 April.
"If this happens today then we will enter the CAFTA on 1 May," said a hopeful Caballero.
If that doesn't happen, then the industry hopes the government will sign the much-ballyhooed trade accord during the month of May, Caballero said.
The accord's deployment is crucial for the textile industry's growth plans which stem largely from wooing investment from foreign producers, particularly in the US.
A slew of government modifications to the CAFTA implementation project have delayed its approval, causing some high-profile textile investors - such as US-based ITG and Russell - to cancel multimillion expansion projects in Guatemala.
Two such initiatives involved ITG and Russell's shift of a $100m and $60m textile expansion projects to Nicaragua and Honduras respectively, Caballero said.
She pointed out that Guatemala's developed textiles market and laws have unwittingly complicated the CAFTA approval.
"Guatemala has a more complex and complete production structure and laws than other Central American countries so it's been harder for us to modify the laws" to pursue to the trade agreement," she said.
ITG and Rusell's shift also cost the industry the nearly 3,000 prospective jobs.
By Ivan Castano
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