The Central American Free Trade Agreement (CAFTA-DR) is expected to create 600,000 jobs in the six countries that have joined the pact, industry leaders said during the 14th Annual Apparel Sourcing Show (APPS), which is taking place in Guatemala City, Guatemala, from 16-18 May.

Carlos Arias, president of big jeanswear maker Koramsa, told an industry panel that CAFTA will bring 600,000 new jobs to the CAFTA nation block, up from an estimated 500,000 now.

The CAFTA countries include Guatemala, Honduras, El Salvador, Nicaragua, Costa Rica and the Dominican Republic, where many textile mills have shuttered due to heavy competition from Asian rivals in the new free-quota market.

Once the CAFTA is implemented, the region is expected to receive an investment snowfall from US textile companies seeking to benefit from the free-trade deal.

Already, foreign textile giants such as Cone Mills and Nien Sing have announced multimillion expansion projects in the region.

Troy Fitrell, labour attache for the US Embassy in Guatemala City, agreed that the region's workforce could grow by that much, as long as the block works to improve its manufacturing processes, infrastructure and product quality to attract foreign investment, something which many investors say it is already doing.

However, Claudia Risco, director of El Salvador's largest textiles chamber Camara de Textiles y Confeccion de El Salvador, said that the 600,000 estimate is overblown.

"None of this job creation is going to happen until the CAFTA is truly consolidated and that could take a long time," Risco said, citing that Asia's competitive thrust could still hurt the region.

"Right now, if we can maintain our current employment levels, that would be good," Risco concluded.

By Ivan Castano