March 2005 management briefing

The abolition of global textile quotas at the beginning of this year has switched attention to other ways in which textile and clothing producers in the developed world can compete against Asian giants such as China and India. For the US textile industry in particular, many of the responses have been little more than knee-jerk reactions, including ongoing efforts to invoke a special 'threat-based' textile safeguard to stall large surges in clothing imports from China under a clause negotiated as part of that country joining the World Trade Organisation. But there are also other moves underway to expand export opportunities for domestic companies and potentially provide more choices and better deals for American consumers. One of these - the pending Central American Free Trade Agreement, known as CAFTA - would provide five Central American countries (Costa Rica, El Salvador, Guatemala, Nicaragua, and Honduras) and the Dominican Republic with duty-free access to the US textile and apparel market. This month's briefing from Leonie Barrie analyses CAFTA and reports on its impact, country by country.

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