USA Pulls Out of Transpacific Agreement

This is good news for Central American textile manufacturers. We will have to wait and see what other protectionist measures will be implemented by President Trump.

Monday, January 23, 2017

The possibility that the United States buys textiles from Vietnam at lower prices than those paid by textile manufacturers in Central America seems to have now disappeared, however, in order to measure the true impact of the Trump protectionist policy on trade between US business and the region we will have to wait to see what other decisions on international trade deals are take by the new administration.

Since the beginning of negotiations for the TPP, the Central American textile industry has tried to forge bilateral negotiations with the US in order to minimize the negative effects that the TPP could have on companies. 

The TPP was signed by 12 countries representing nearly 40% of the world economy: Australia, Brunei, Canada, Chile, the United States, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

Trump also announced after taking office that he will renegotiate the free trade agreement with Mexico and Canada.

More on this topic

Central America Happy Over Trump´s TPP Decision

November 2016

If the United States withdraws from the Transpacific Agreement, there will be less risk of competition from Asian countries for the Central American textile industry.

If the US does eventually abandon the Trans-Pacific Partnership Agreement (TPP), as promised by President-elect Donald Trump, the Central American textile industry could benefit from the elimination of the possibility that the US, its main market, will buy textiles from Vietnam at lower prices. Since the start of negotiations for the TPP, the Central American textile industry has tried to negotiate bilaterally with the US in order to minimize the negative effects that the TPP could have on the industry in the region.

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.

Guatemala Sees Threat in Transpacific

May 2013

The negotiation of an agreement between the U.S. and the Trans-Pacific Partnership would enable the country to purchase cheaper textiles from Vietnam, which would disadvantage Central American companies.

In an interview with Eddy Coronado for Sergio de la Torre, Guatemala's economy minister, explained that this negotiation could undermine the conditions that the member countries of CAFTA have negotiated, jeopardizing participation of Guatemalan products in those markets.

Costa Rica and the Trans-Pacific Alliance

February 2012

The Trans-Pacific Alliance is a trade agreement under negotiation, involving Australia, Brunei, Chile, the USA, Malaysia, New Zealand, Peru, Singapore and Vietnam.

A statement from the Ministry of Foreign Trade of Costa Rica explains:

Costa Rica is exploring the possibility of participating in the Trans-Pacific Alliance, which has the potential to become the commercial hub of the Asia Pacific region.

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