Jamaica Gleaner
Kingston
Petroleumworld.com
02 19 06
JACOBO
KATTAN was hoping to build an industrial park and create 8,000
new jobs after the expected implementation of a regional free-trade
pact last month. Instead, he's had to fire 2,000 workers and
close three companies as the region's clothing industry haemorrhages,
putting factories in legal limbo while much of their business
leaves for Asia.
The
Central American Free Trade Agreement (CAFTA) was supposed to
take effect on January 1. But none of the member-countries -
Guatemala, El Salvador, Honduras, Nicaragua and the Dominican
Republic - were ready to comply with what some complain is an
ever-changing set of rules and regulations proposed by United
States negotiators, including strengthening of intellectual
property laws.
"The
U.S. negotiation practices have been wretched," said Guatemala's
Vice-Minister of Foreign Trade, Enrique Lacs. The U.S. team
still wants several more side agreements from Guatemala, he
said, including lifting restrictions on the importation of antennae
and other telecommunications equipment.
"If
we had accepted the accord as is, CAFTA would already be in
place," Lacs said. "But we are still debating."
Neena
Moorjani, spokeswoman for U.S. Trade Representative Rob Portman,
said the delay was normal - and necessary.
"We
are working toward prompt ratification of CAFTA," she said.
"At the same time, the implementation process should not
be rushed, so that the benefits to farmers, workers, businesses,
and consumers of the United States and its CAFTA partners are
not jeopardised."
El
Salvador expects to implement CAFTA on March 1. Guatemala and
Nicaragua have set their sights for April or May, and Honduras
has said it will take six months. The Dominican Republic says
it won't be able to formally join until the summer.
Things
were grim even before CAFTA-DR was agreed upon. When the U.S.
eliminated quotas on clothing imports from China last year,
Central America's factories immediately began to suffer. Guatemala
alone lost 38,000 jobs and 51 textile factories in 2005. The
U.S. increased imports of Chinese produced textiles by 95 per
cent over the same period.
Kattan,
whose factories make mostly dress shirts for U.S. buyers, has
watched as his business has gone East.
"My
clients tell me: 'If I have to wait 45 days to bring the cloth
from Asia and pay higher Honduran wages, I might as well just
send the orders" to Asia, he said.
Under
the existing Caribbean Basin Trade Partnership Act, Central
American clothing manufacturers can avoid paying U.S. tariffs
when exporting garments made with U.S. thread. But U.S. thread
is so expensive that it makes more sense economically to import
Asian fabric and pay the extra taxes.
