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. trade office (USTR). Zamora affirmed that representatives from textile companies have visited the U.S.
Representatives from the Institute for Exports and Fashion in Colombia are visiting the country in search of investors who wish to form strategic alliances.
The visit by the Colombians will be held prior to the textile and fashion show Colombiamoda 2013, to be held in Medellin from 23rd to 25th of July.
According to Carolina Fernandez, business coordinator of the Institute for Export and Fashion (Inexmoda), "Colombian brands are interested in making alliances and offering franchises in Guatemala". Among the companies interested in entering the country are: Arturo Calle, which sells clothing for executive men and Agua Bendita, which sells lingerie and swimwear.
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 Prensalibre.com 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.
Next Friday and Saturday 24th and 25th August a mission of businessmen from the Indian textile industry will be looking for investment opportunities and partnerships with Guatemalan companies.
According to information from the Indian Embassy in Guatemala, the meeting will take place on Friday at the Hall of the Hotel Camino Real Vega, Area 10. Buying and selling negotiation rounds will be held at the event.
Data from the Bank of Guatemala (Banguat) also showed a decrease in export volumes which amounted to 137 million kilos, 28.3% less than the 191 million kilos in the same period in 2011.
During the same period, reductions have been reported not only on income from foreign sales of coffee; the situation is the same with exports of natural rubber and cardamom. For natural rubber the reduction in export value was 24.6%, and for cardamom, 25.6%.
After a tough first semester 2012, which saw a significantly decline in orders from the main market of the Guatemalan textile industry, the recovery began in June.
According to an article in Prensalibre.com the manager of the Garment and Textile Committee (Vestex) of Agexport, Alejandro Ceballos, said that during the first five months of the year economic uncertainty in the U.S., high international prices of cotton, and problems caused by the implementation of the new Customs Act, meant that purchase orders steadily declined.
Textile exports to the United States reported at the end of 2011 an increase of 25%, with the largest exporter being Honduras, followed by El Salvador.
Marisa Mont, a technician at the Economic Integration Secretariat, outlined the results, "Recovery begins from 2010 and is growing exponentially. This demonstrates an upward trend and that clearly is going to continue, although it is probably not going to keep growing by 25%, but it is an uptrend.
Aggressive measures must be taken in marketing and attracting investment in order to exploit the possibilities opened by the DR-CAFTA and changes in the global market.
From Diario de Centro América:
The CAFTA-DR region has opportunities for growth
The clothing and textile sector of the country is ready to compete globally.
Opportunities in the region provided by the Free Trade Agreement between Central America, Dominican Republic and the U.S.
The rising costs in China have caused companies like this north American firm to look once again towards the isthmus to buy their clothing.
Carlos Arias, president of the Committee on Textiles and Clothing (Vestex) of Guatemala, said during a forum at the latest Apparel Sourcing Show 2012, that JC Penney have indicated that their purchases from the isthmus will rise by 30%.
Guatemala went from exporting 50,000 screen printed garments to 12 million within 12 years.
Within a month, the textile and clothing sector exports abroad 32 million items, of which 37.5% have graphic prints, said Robert Matheu, president of the Silkscreen Commission from the Clothing and Textiles sector.
Matheu attributes this growth to training and access to technology, according to Prensalibre.com.
Businessmen say that clothing and textiles have regained the export levels of pre 2008-2009, when sales plummeted by 30%.
The president of the Garment and Textile Committee (Vestex), Carlos Arias, said that in 2008 and 2009 the industry saw sales drop by 30%. This meant that 15,000 people lost their jobs.
"There is a direct link between sales and jobs, and last year we recovered about 30% of the production affected by the crisis, so we believe that a similar recovery can be seen in terms of employment", said Arias to Siglo21. com.gt.
The industry ranks as the number one generator of foreign exchange with $1,130 million exported in 2011, displacing coffee, according to official data.
Guatemalan clothing and textile exports reached $1,130 million between January and November 2011, which slightly exceeds the revenue generated by coffee, which amounted to $1,110 million in the same period, reported the Bank of Guatemala (Banguat).
The lower labor costs offered by China are no longer such, due to the 22% increase in the minimum wage for workers.
There are positive expectations for the maquila and textile sectors in Central America regarding the return of companies who had migrated to China because of the lower labor costs.
With the disappearance of this advantage, Central America is once again among the best options for multinationals, having as an advantage its proximity to the U.S., which reduces transportation costs and delivery times.
Guatemala's textile industry is changing from exporter of finished products to one that provides raw materials to manufacturers in other Central American countries.
The migration of maquila companies to Nicaragua, El Salvador and Honduras has generated an increased demand for industrial fabric and textile materials transforming the Guatemalan textile industry.