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UNCERTAIN FUTURE FOR CENTRAL AMERICAN TEXTILES AS QUOTAS EXPIRE.

Article Excerpt
New year in, Multi-Fiber Agreement (MFA) out. On Jan. 1, the MFA, a system of quotas that protected textile production in Central America and in other poor countries around the world, expired. Among the first effects of the expiration, Korean owners of the CSS Guatemala maquila left the country during the New Year holidays with no notice to employees, looting the factory of its equipment and owing workers a total of US$257,000.

The MFA was part of the World Trade Organization (WTO) Textile and Clothing Agreement. That agreement governed the elimination, over time, of import quotas on clothing items coming from emerging nations and destined for the US, Canada, and Europe. The Jan. 1 expiration means that megaretailers in these countries are now bound only by price in determining where apparel items sold at Wal-Mart and similar firms will come from. That, in turn, means that China, with over 25% of the world's textile factories, might easily drown manufacturing midgets like CSS and effectively drive Guatemala and countries like it out of the industry. China's labor costs are 61% below those of Honduras, the region's largest producer of these goods.

China mushrooms, India burgeons, Pakistan expands

Reports show that, during 2004, in anticipation of the MFA's expiration, the textile industry in China grew 26% to capture...

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