The trade pact between the United States and six Latin American nations has left a bad taste among traders making it difficult to conduct business in Central America.
It has worked as a disincentive after the Congress approved the Central American Free Trade Agreement as import taxes on textile goods from Costa Rica, the Dominican Republic and Guatemala went as high as 30 percent for their non-approval of CAFTA.
On the other hand, El Salvador, Honduras and Nicaragua had approved the agreement allowing them to ship textile and apparel goods duty-free to the United States.
The duties also apply to goods shipped from the countries that have approved CAFTA if they include thread, buttons or other materials from the other three countries.
Many feel a provision would have been better for Central American textile makers to use US fabric for pockets and their linings.
But some sections feels that in order to prevent China from taking over this lucrative part of apparel production, this provision was avoided.
Already textile companies were facing stiff competition from cheaper goods from China and Asia.
China held a 32 percent share of the US clothing and textile market in mid-2005 whereas no other country had as large a share of that market.
The industry got a break when the US and China entered a three-year agreement to slow imports of goods ranging from baby socks to swimwear and restricting to certain others, such as thread and yarn.
CAFTA supporters feel that it offers opportunities to industries to keep textile jobs in the United States by keeping the cut-and-sew apparel business in Latin America.
National Council of Textile Organizations believe that by integrating textile and apparel production they can produce garments competitively priced against Chinese goods.