Mexico's textile and apparel manufacturers are caught in a bitter row over the benefits that the country's possible entry into the Central American Free Trade Agreement (CAFTA-DR) may bring to their respective trades.

Mexico is currently reviewing CAFTA-DR membership for all its industries as a way to expand trade ties with its Central American neighbours. The country has begun negotiations and hopes to reach a deal in coming months, just-style was told.

Rafael Zaga, president of top textile chamber Camara Nacional de la Industria Textil (CANAINTEX), said this week that CAFTA will boost fabric exports to 100m metric tonnes in the first year of Mexico's membership and to 200m tonnes in the second year.

Apparel makers in Central America and the Dominican Republic will be able to make clothes with Mexican fabrics (through the accumulation provision) and export them to the US duty free, given they don't surpass certain limits, Zaga was quoted by local press as saying.

Zaga said the tentative accord will boost efforts to create a Free Trade Area of the Americas (FTAA-ALCA), a proposal now stalled because of Venezuelan, Argentine and Brazilian opposition. 

"This would be like a mini Alca (Área del Libre Comercio para Las Américas/Free Trade Area of the Americas) and will help regional integration," Zaga said.

Mexico's adhesion to CAFTA will also help its breadwinning textile and apparel trades fight off huge competition from Asian producers, Zaga added, by creating a stronger competitive trading block.

Mexico has complained that the CAFTA group will cripple its exports to the US, so membership should provide some benefits.

But the country's apparel industry has a very different view of CAFTA, and doesn't want to join.

Tony Kuri, president of de apparel trade chamber Cámara Nacional de la Industria del Vestido (CNIV), said CAFTA membership will kill thousands of jobs in the apparel sector by transferring manufacturing to Central American producers.

CAFTA "may create 10,000 new textile jobs but we will lose 200,000," Kury said.
He said CNIV is working to coax the government to reject the treaty or provide it with a workable solution.

"We might be able to accept this if they offer us lower fabric import duties, but what we want is for the government to review CAFTA's repercussions very carefully before it signs anything."

By Ivan Castano.