Page 60 - New Cloth Market November 2022 Digital Edition

INTERNATIONAL BUSINESS PAGES

investigation, intelligence, criminal well as income from foreign direct in- of garments classified under the “sim-
prosecution, and penitentiary system. vestments. Guatemala's GDP per cap- ple transformation” category, their en-
The internal courts would continue to ita registered a growth of 61.38% in trance into the US is duty free, allow-
be part of the Honduran judicial sys- 2020, compared to 2010, amounting to ing garments to be manufactured in El
tem, although they would be empow- US$4,603.34, while El Salvador's Salvador with fabrics from anywhere
ered to operate autonomously and in- growth in the same period was 27.33%, in the world. Some of the garments
dependently, and could even resort to amounting to US$3,798.64. classified in this category are: bras-
foreign judges, according to the Law sieres, girls' dresses, boxers, pajamas,
According to the US Government's
that creates this structure, approved and suitcases, among others.
Office of Apparel and Textiles
in 2013.
(OTEXA), El Salvador is the twelfth The following are El Salvador’s
At the World Textile Industry Summit, largest supplier of apparel products for strengths in the textile industry: a fully
government officials mentioned that the US, in addition to exporting tex- integrated supply chain, innovation and
they regard Honduras as a global tex- tiles and apparel to more than 50 coun- adoption of new technologies, quick
tile hub. At the same summit, inves- tries. delivery to the consumer, and produc-
tors from around the world showed in- tion with social responsibility, as well
El Salvador's exports of articles of
terest in the country because of the as access to a skilled labor force and
apparel (Chapter 61 and 62) account
progress the country has made in en- the possibility of setting up operations
for approximately 30.6% of the coun-
vironmental issues and the actions it in Free Trade Zones in the country, reg-
try's total exports, and those of tex-
has taken to improve the quality of life ulated by the specific law approved in
tiles constitute 1.59% of total exports,
of maquila employees. Some of the El Salvador in 1998.
according to 2020 data. Due to this
companies showing interest in estab-
year's crisis brought on by pandemic, In 2017 CAMTEX launched the 2030
lishing operations in Honduras are:
Chapter 61 exports dropped by 37%, Plan with goals that included increas-
Nike, Adidas, Under Armour, Diesel,
while Chapter 62 exports fell more dras- ing the competitiveness and develop-
and fashion firms from Italy.
tically, by 51%. The main destination ment of the activity in the future. Some
EL SALVADOR for articles of apparel was the US, with of the proposals were to improve the
a share of more than 80%. quality of the final product by adding
The textile industry is important due
more value, to use the communication
to its contribution to the country's eco- The Textile and Apparel Sector in El
tools offered by the Internet, including
nomic dynamics. It accounts for 40% Salvador
e-commerce. Another goal is to make
of exports, employs 75,000 direct
El Salvador's textile and apparel indus- short and fashion-oriented runs, thus
workers and 200,000 indirect workers,
try has been classified as one of the focusing on quality rather than quanti-
which constitute 43% of the jobs in the
main economic drivers since the ty.
country's industry, according to data
1950s. Its development was boosted
from Cámara de la Industria Textil, Other Plan 2030 goals are related to
in the 1980s with the increase in ex-
Confección y Zonas Francas de El increasing exports to the US, consoli-
ports to the US, as a result of the Car-
Salvador (Chamber of the Textile, Cloth- dating a synthetic-fabric cluster to at-
ibbean Basin Initiative (CBI), and ac-
ing and Free Zones Industry of El Sal- tract local and foreign investment in
tivities almost exclusively related to
vador–CAMTEX in Spanish). Further- new sub-segments, establishing aca-
assembly, whereby materials were re-
more, according to the Fourth Quar- demic institutions with curricula to train
ceived, transformed, and sent to the
terly Economic and Regulatory Perfor- human resources in textiles and ap-
US as a finished product.
mance Report of the Salvadoran As- parel, design and pattern making; and
sociation of Industrialists (presented in As a result of the Free Trade Agree- developing a new textile industry.
January 2022), more than 81,000 jobs ment (DR-CAFTA) signed by the US,
The Organismo Promotor de Inver-
had been generated as of October Central America, and the Dominican
siones y Exportaciones de El Salva-
2021, which denotes a year-on-year Republic (2004), textile trade is tariff
dor (Exports and Investment Promo-
increase of 7.5% (over 5,350 jobs, free.
tion Agency of El Salvador–PROESA
approximately).
In the Central American region there in Spanish) promotes El Salvador as
According to World Bank data, El Sal- is a shortage of fabrics, especially the only country that has managed to
vador's exports amounted to US$5.05 those produced with synthetic fibers develop a complete synthetic cluster
billion, and Guatemala's exports (nylon, microfibers, and others). This in the Central American region and
amounted to US$11.6 billion, roughly poses an opportunity because of the uses this fact to promote the industry
twice as much as that of El Salvador. country’s preferential access to the as a leader in the development, pro-
On the other hand, Guatemala's eco- US, since garments coming from oth- duction, and export of high value-add-
nomic indicators are more favorable, er regions, such as Asia, pay a 32% ed textile products. To achieve this, the
tripling El Salvador's GDP in 2020, as tariff when entering the US. In the case industry sector, and the Government
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