Can CAFTA save textile and apparel producers?
The Economic Policy Institute August 10, 2005 Some proponents of the Dominican Republic-Central American Free Trade Agreement (CAFTA) believe that it will stimulate apparel industry employment in Central America. According to a University of Michigan study, CAFTA will increase textile and apparel employment in Central America by 283,000 jobs, or 41%.1 The U.S. Trade Representative’s (USTR) office claimed that, because “garments made in the region will be duty-free and quota-free under the Agreement only if they use U.S. or regional fabric and yarn, thereby supporting U.S. jobs,” CAFTA would in turn “provide regional garment-makersand their U.S. or regional suppliers of fabric and yarna critical advantage in competing with Asia.”2 Similar claims were made for the North American Free Trade Agreement (NAFTA), but new data reveal that the U.S.-Mexico textile and apparel complex has been unable to compete with the flood of imports coming into the United States from China. Since 2000, Mexico
