Guatemala lost 38,000 jobs and 51 textile factories shuttered in 2005.
Caribbean Basin Trade Partnership Act states that Central American clothing manufacturers need not pay US tariffs while exporting garments made with US thread.
As US thread is very expensive, Central American apparel makers turn to Asian fabric maker who provide them cheap fabrics even after paying high import duties.
Under CAFTA-DR the region can manufacture its own thread and fabrics, creating more jobs, and provide US stores with cheaper Central American clothing.
Being able to produce the entire product locally will also create more jobs in Central America.
Central America's cloth industry needs time and money to get started and uncertainty over CAFTA-DR implementation is prolonging much awaited investment for revival of the flagging textile sector.
Roberto Gonzalez, representative of Guatemalan textile industry, observed that Guatemala, El Salvador and Honduras can very easily produce their own cloth, but without CAFTA in place, he says not even machines can be started.
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