The Partnership for Central America recently published a study that analyzes the complementary textile and apparel value chain between Guatemala, Honduras, and El Salvador (Northern Triangle countries) on the U.S. industry.
The U.S. and Central American apparel and textile industries do not directly compete due to differing specializations. The U.S. focuses on technical textiles, specialty fabrics, niche markets and advanced processes requiring high investment and technology. Conversely, Northern Triangle countries (CA-3) specialize in assembling basic apparel with labor-intensive processes for the private-label mass production demand market, complementing rather than competing with U.S. production. The U.S. apparel and textile industry shows no signs of decline, and eliminating the 10% tariff to CA-3 countries would not halt or reverse its growth.
The investment promotion activities from the PCA will not halt or reverse that growth and would likely instead fill growing demand. Regional chain integration would benefit both parties, the U.S. maintains advantage in specialized materials, CA-3 strengthens its role in manufacturing and assembly, more resilient and competitive supply chain, will compete against other exporters, mainly in Asia, for a larger share of the US import market, rather than encroach on domestic producers’ market share or domestic employment.