The Dominican Republic adopted protectionist measures on Panamanian exports of sports socks and clothing.
The country announced its decision to apply a 40% protection measure on sports socks and clothing for men, women and children on exports from China, USA, Hong Kong and Panama, among others.
On this situation, the head of the Panamanian trade ministry indicated that "it is regrettable that the Dominican Republic´s government has taken such a definitive protectionist measure against the Panamanian textile sector despite the Federal Government, through the General Department of Trade Defense Office of International Trade Negotiations (ONCI) appeared and upheld the administrative process before the Regulatory Commission of the Dominican Republic on the reasons why a manufacturing industry like Panama should not be subject to a safeguard measure, providing all the necessary information during the investigation process, which shows that exports from Panama will not affect this country´s industry."
Socks exports to the United States will reach $5.4 million by the end of the year, 101% more than 2008, when $2.7 million were sold.
"Honduras textile industry improved in this segment, despite the fact that total textile and apparel exports to the U.S. fell 7%", commented Guillermo Matamoros, director of the Honduran Maquila Association (AHM).
After the U.S. socks tariff was waived on January 1st, exports have increased 15%.
An article in Laprensa.hn reports that "Gullermo Matamoros, director of the Honduran Maquila Association, explained that despite the global crisis, Honduras remains the world's top exporter of the product.
With the opening of its sixth garment production plant, the company has made a total investment of $200 million since its arrival in the country in 1992.
Keny López wrote in LaPrensagrafica.com: "'This new Hanesbrands project called 'El SalvadorSocks' entails the creation of 500 jobs which would double within a period of 12 months when the plant is operating at full capacity,' said Ron Gburek, vice president of weaving for Hanesbrands Inc. 'Production in El Salvador will go to retail stores across the United States. The plan is not to supply the Central American market, but we would eventually earmark a portion of production to this market' explained Gburek.”
Since Thursday January 1, the United States has suspended the temporary 7% tariff that it had imposed on sock coming from Honduras.
Nacion.com reported that "this means that Honduras is free from restrictions to export socks and now has a huge opportunity for growth in this area, said Jesus Canahuati, head of the Maquilas Associations, to AP."
In its 2Q report Activewear Inc. also said it plans to construct a third textile facility in Honduras, to support its projected sales growth beyond 2009.
The capital cost of the new facility, which will be constructed in fiscal 2008 and fiscal 2009, is expected to be in the range of $100 million to $110 million, the majority of which will be incurred in fiscal 2009, the company said.
Just two years after launching an ambitious plan to become a major player in the North American hosiery business, Gildan Activewear Inc. finds itself caught up in an international trade dispute over the flood of socks into the U.S. from Honduras.
In a politically charged anti-free-trade crusade, independent U.S. sock makers contend that Montreal-based Gildan is not abiding by the rules of fair trade in shipping most of its cotton socks into the U.S. duty-free from low-cost Honduras.
The Bush administration decided yesterday to impose a 5 percent tariff on Honduran socks later this year after finding that imports of low-priced cotton footwear from Central America were hurting struggling sock makers in North Carolina and Alabama.
Though the move could temporarily improve U.S.-made sock sales by boosting the price of Honduran socks, smaller domestic sock makers called the gesture a sham that will do little to prop up their rapidly vanishing businesses.
The United States has levied a five per cent tariff on imports of socks from Honduras. Although the levy is lower than local producers feared it would be, it is still surprising, given the presence of a free trade agreement between the two countries.
"The import tax that will apply to the importation of socks will be five per cent from July to December and will disappear in January 2009," the president of the Association of Maquiladoras of Honduras, Jesús Canahuati, told reporters.
Honduras has 60 days to initiate consultations against the application of safeguard. For some experts this is the first message from Washington in its dealings of government
The United States government justified the intention to implement a safeguard measure on the export of cotton socks from Honduras, in view of the increase of 99 per cent in exports. The Committee for the Implementation of Textile Agreements (CITA) Honduras notified of his intention to apply a safeguard measure to textiles imported cotton socks to the United States.
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