Central America and the Trans-Pacific Agreement

Analysis of the impact of the Trans-Pacific Partnership on the region.

Friday, September 19, 2014

The competition which sectors such as textiles could face is one of the elements raising questions among employers in the region, compared to the real benefits that could be accrued if Central America participates in the Strategic Economic Trans Pacific Partnership (TPP).

The presence of direct competitors, such as countries like Vietnam, in the textile sector, and the possibility of losing dominance in the American market due to trade rules that TPP countries must meet, is unsettling the productive sectors in the region and forcing a reckoning of the pros and cons of a possible entry to the block to be undertaken.

Luis Cardenal, President of the Chamber of Commerce and Industry of El Salvador, told Laprensa.com.ni that "... in the region, the biggest worry is over losing space in the United States, due to the flexible rules of origin established in the Trans-Pacific Partnership, which allow countries such as Vietnam and Malaysia, which already have a good share of the textile market in that nation, to buy cheaper yarn and fabric in China and Bangladesh, making them even more competitive. "

In the case of Nicaragua, "... The fact that there is a Free Trade Agreement (FTA) already with Chile, Mexico, the United States and other economies which are already integrated or will be into the Trans-Pacific Partnership, means, in the view of Carlos Salinas, President of the Mexican Chamber Nicaraguan, that the treaties are complementary. Eduardo Fonseca, executive director of the Chamber of Commerce, sees an opportunity "particularly if the Grand Canal comes to fruition, the TPP will be favorable because we will build ports in the Pacific and the Atlantic and then we will have high demand for passage of goods."

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More on this topic

Honduras Wants to Enter Trans-Pacific Agreement

May 2015

The maquila industry approves of the government's decision to apply for formal admission into the agreement, which would improve conditions for textile companies competing with countries like Vietnam.

The Honduran Maquila Association (AHM) is one of the unions in the country which is most interested in being part of the trade union agreement, because the United States is the main destination for its production, and where textiles also come from countries that are already part of the agreement, such as Vietnam.

El Salvador and the Trans-Pacific Partnership

February 2015

The government is seeking US support in order to improve conditions in the negotiation of the Trans-Pacific Partnership to minimize the impact it will have on sectors such as textiles.

From a statement issued by the Ministry of Economy of El Salvador (MINEC):

The Minister of Economy, Tharsis Solomon Lopez began a series of meetings in Washington DC with Senators, Congressmen, trade officials from the US Government and private entities, in order to present the position of the Salvadoran government in the negotiations for the Trans-Pacific Partnership, known by its acronym TPP, in relation to the impact it could have on Salvadoran exports carried out under the Free Trade Agreement with the United States, known as CAFTA-DR.

U.S. Textile Companies Ask For Rule of Origin To Be Kept

December 2013

The president of the Dominican Republic has warned the U.S. government about the impact the Trans- Pacific treaty in the textile sector in the region.

From a statement by the Ministry of Foreign Affairs of the Dominican Republic:

On November 27, President Danilo Medina sent a communication to the President of the United States, Barack Obama, in which it reiterated its concern expressed during the meeting held in San José, Costa Rica, in May, in connection with the negative impact which could come from the Trans- Pacific Economic Partnership Agreement (TPP) on the textile and clothing industry in the signatory countries of the DR -CAFTA and the region, if certain special concessions that could cause changes in the management and values ​​of hemispheric trade, and on a worldwide level.

Regional Textile Industry Could Lose Its Advantages

July 2013

The Trans-Pacific agreement being negotiated by the U.S. could authorize Vietnam to get threads from China and export duty-free textiles to the North American nation.

The Ambassador of El Salvador in that country, Ruben Zamora, has already raised concerns with officials from the U.S.