

Currently released so far... 12404 / 251,287
Browse latest releases
2010/12/01
2010/12/02
2010/12/03
2010/12/04
2010/12/05
2010/12/06
2010/12/07
2010/12/08
2010/12/09
2010/12/10
2010/12/11
2010/12/12
2010/12/13
2010/12/14
2010/12/15
2010/12/16
2010/12/17
2010/12/18
2010/12/19
2010/12/20
2010/12/21
2010/12/22
2010/12/23
2010/12/24
2010/12/25
2010/12/26
2010/12/27
2010/12/28
2010/12/29
2010/12/30
2011/01/01
2011/01/02
2011/01/04
2011/01/05
2011/01/07
2011/01/09
2011/01/10
2011/01/11
2011/01/12
2011/01/13
2011/01/14
2011/01/15
2011/01/16
2011/01/17
2011/01/18
2011/01/19
2011/01/20
2011/01/21
2011/01/22
2011/01/23
2011/01/24
2011/01/25
2011/01/26
2011/01/27
2011/01/28
2011/01/29
2011/01/30
2011/01/31
2011/02/01
2011/02/02
2011/02/03
2011/02/04
2011/02/05
2011/02/06
2011/02/07
2011/02/08
2011/02/09
2011/02/10
2011/02/11
2011/02/12
2011/02/13
2011/02/14
2011/02/15
2011/02/16
2011/02/17
2011/02/18
2011/02/19
2011/02/20
2011/02/21
2011/02/22
2011/02/23
2011/02/24
2011/02/25
2011/02/26
2011/02/27
2011/02/28
2011/03/01
2011/03/02
2011/03/03
2011/03/04
2011/03/05
2011/03/06
2011/03/07
2011/03/08
2011/03/09
2011/03/10
2011/03/11
2011/03/13
2011/03/14
2011/03/15
2011/03/16
2011/03/17
2011/03/18
2011/03/19
2011/03/20
2011/03/21
2011/03/22
2011/03/23
2011/03/24
2011/03/25
2011/03/26
2011/03/27
2011/03/28
2011/03/29
2011/03/30
2011/03/31
2011/04/01
2011/04/02
2011/04/03
2011/04/04
2011/04/05
2011/04/06
2011/04/07
2011/04/08
2011/04/09
2011/04/10
2011/04/11
2011/04/12
2011/04/13
2011/04/14
2011/04/15
2011/04/16
2011/04/17
2011/04/18
2011/04/19
2011/04/20
2011/04/21
2011/04/22
2011/04/23
2011/04/24
2011/04/25
2011/04/26
2011/04/27
2011/04/28
2011/04/29
2011/04/30
Browse by creation date
Browse by origin
Embassy Athens
Embassy Asuncion
Embassy Astana
Embassy Asmara
Embassy Ashgabat
Embassy Apia
Embassy Ankara
Embassy Amman
Embassy Algiers
Embassy Addis Ababa
Embassy Accra
Embassy Abuja
Embassy Abu Dhabi
Embassy Abidjan
Consulate Auckland
Consulate Amsterdam
Consulate Adana
American Institute Taiwan, Taipei
Embassy Bujumbura
Embassy Buenos Aires
Embassy Budapest
Embassy Bucharest
Embassy Brussels
Embassy Bridgetown
Embassy Bratislava
Embassy Brasilia
Embassy Bogota
Embassy Bishkek
Embassy Bern
Embassy Berlin
Embassy Belmopan
Embassy Belgrade
Embassy Beirut
Embassy Beijing
Embassy Banjul
Embassy Bangkok
Embassy Bandar Seri Begawan
Embassy Bamako
Embassy Baku
Embassy Baghdad
Consulate Barcelona
Embassy Copenhagen
Embassy Conakry
Embassy Colombo
Embassy Chisinau
Embassy Caracas
Embassy Canberra
Embassy Cairo
Consulate Curacao
Consulate Ciudad Juarez
Consulate Chennai
Consulate Casablanca
Consulate Cape Town
Consulate Calgary
Embassy Dushanbe
Embassy Dublin
Embassy Doha
Embassy Djibouti
Embassy Dili
Embassy Dhaka
Embassy Dar Es Salaam
Embassy Damascus
Embassy Dakar
Consulate Dubai
Embassy Helsinki
Embassy Harare
Embassy Hanoi
Consulate Ho Chi Minh City
Consulate Hermosillo
Consulate Hamilton
Consulate Hamburg
Consulate Halifax
Embassy Kyiv
Embassy Kuwait
Embassy Kuala Lumpur
Embassy Kinshasa
Embassy Kingston
Embassy Kigali
Embassy Khartoum
Embassy Kathmandu
Embassy Kampala
Embassy Kabul
Consulate Kolkata
Embassy Luxembourg
Embassy Luanda
Embassy London
Embassy Ljubljana
Embassy Lisbon
Embassy Lima
Embassy Lilongwe
Embassy La Paz
Consulate Lahore
Consulate Lagos
Mission USOSCE
Mission USNATO
Mission UNESCO
Embassy Muscat
Embassy Moscow
Embassy Montevideo
Embassy Monrovia
Embassy Minsk
Embassy Mexico
Embassy Mbabane
Embassy Maputo
Embassy Manila
Embassy Manama
Embassy Managua
Embassy Malabo
Embassy Madrid
Consulate Munich
Consulate Mumbai
Consulate Montreal
Consulate Monterrey
Consulate Milan
Consulate Melbourne
Embassy Nicosia
Embassy New Delhi
Embassy Ndjamena
Embassy Nassau
Embassy Nairobi
Consulate Naples
Consulate Naha
Embassy Pristina
Embassy Pretoria
Embassy Prague
Embassy Port Of Spain
Embassy Port Louis
Embassy Port Au Prince
Embassy Phnom Penh
Embassy Paris
Embassy Paramaribo
Embassy Panama
Consulate Peshawar
REO Basrah
Embassy Rome
Embassy Riyadh
Embassy Riga
Embassy Reykjavik
Embassy Rangoon
Embassy Rabat
Consulate Rio De Janeiro
Consulate Recife
Secretary of State
Embassy Suva
Embassy Stockholm
Embassy Sofia
Embassy Skopje
Embassy Singapore
Embassy Seoul
Embassy Sarajevo
Embassy Santo Domingo
Embassy Santiago
Embassy Sanaa
Embassy San Salvador
Embassy San Jose
Consulate Strasbourg
Consulate St Petersburg
Consulate Shenyang
Consulate Shanghai
Consulate Sao Paulo
Embassy Tunis
Embassy Tripoli
Embassy Tokyo
Embassy The Hague
Embassy Tel Aviv
Embassy Tehran
Embassy Tegucigalpa
Embassy Tbilisi
Embassy Tashkent
Embassy Tallinn
Consulate Toronto
Consulate Tijuana
USUN New York
USEU Brussels
US Office Almaty
US Mission Geneva
US Interests Section Havana
US Delegation, Secretary
UNVIE
Embassy Ulaanbaatar
Embassy Vilnius
Embassy Vienna
Embassy Vatican
Embassy Valletta
Consulate Vladivostok
Consulate Vancouver
Browse by tag
ASEC
AE
AF
AM
AR
AJ
AU
AORC
AG
AEMR
AMGT
APER
AGMT
AL
AFIN
AO
AMED
ADCO
AS
ABUD
ABLD
ASUP
ASECKFRDCVISKIRFPHUMSMIGEG
APECO
AID
AND
AMBASSADOR
AN
ARM
AY
AODE
AMG
ASCH
AMCHAMS
ARF
APCS
APEC
ASEAN
AGAO
ANET
ADPM
ACOA
ACABQ
AORL
AFFAIRS
ATRN
ACS
AFSI
AFSN
ADANA
ASIG
AA
AX
AUC
AC
AECL
AADP
AGRICULTURE
AMEX
ACAO
ACBAQ
AQ
AORG
ADM
AINF
AIT
ASEX
AGR
AROC
ATFN
AFGHANISTAN
AFU
AER
ALOW
AZ
AVERY
BA
BY
BU
BR
BE
BL
BO
BK
BM
BILAT
BH
BEXP
BF
BTIO
BC
BBSR
BMGT
BTIU
BG
BWC
BB
BD
BX
BP
BRUSSELS
BN
BIDEN
BT
CW
CH
CF
CD
CV
CVIS
CM
CE
CA
CJAN
CLINTON
CIA
CU
CASC
CI
CO
CACM
CDB
CN
CMGT
CS
CG
CBW
CIS
CR
CONDOLEEZZA
CPAS
CAN
CWC
CY
COUNTER
CDG
CL
CT
CIC
CIDA
CSW
CHR
CB
CODEL
COUNTERTERRORISM
CTR
COM
CICTE
CFED
CJUS
CKGR
CBSA
CEUDA
CARSON
CONS
CITEL
CLMT
CROS
CITT
CAC
CVR
CDC
CAPC
COPUOS
CBC
CBE
CARICOM
COE
COUNTRY
CLEARANCE
CACS
CTM
CNARC
ECON
EFIN
ETRD
EUN
EFIS
EG
ETTC
EZ
EPET
EAID
EAGR
ENRG
ECUN
EU
ELAB
ECPS
EAIR
EINV
ELTN
EWWT
EIND
EMIN
EI
ECIN
ENVR
ELECTIONS
EINVEFIN
EN
ES
ER
EC
EUC
EINT
EINVETC
ENGR
ET
EK
ENIV
ETRDEINVECINPGOVCS
ECONOMY
EAP
EFTA
EUR
EUMEM
EXIM
ERD
ENERG
EUREM
ESA
ERNG
EXTERNAL
EPA
EINVECONSENVCSJA
ECONOMICS
ELN
EINN
EFINECONCS
ENNP
EEPET
ETRDEINVTINTCS
ENVI
ETRO
ESENV
ECINECONCS
ECONOMIC
EAIDS
EDU
ETRA
ETRN
EFIM
EIAR
ETRC
EAIG
EXBS
EURN
ECIP
EREL
ECA
ENGY
ECONCS
ECONEFIN
ETC
ETRDECONWTOCS
EUNCH
EINDETRD
IR
IZ
IS
IAEA
INRB
IRAJ
IQ
IN
IT
IMO
INTERPOL
ICAO
IO
IC
ITALY
ITALIAN
IRAQI
ICTY
ID
IPR
IWC
ILC
INTELSAT
IL
IBRD
IMF
IA
IRC
ICRC
ILO
ITU
ITRA
IV
IDA
IAHRC
ICJ
ISRAELI
IRS
INMARSAT
ISRAEL
ISLAMISTS
INDO
IZPREL
ITPHUM
ITPGOV
ITF
IBET
IEFIN
INR
IACI
INTERNAL
IDP
IGAD
IEA
ICTR
IIP
INRA
INRO
IF
KJUS
KSCA
KNNP
KU
KCOR
KCRM
KDEM
KTFN
KHLS
KPAL
KWBG
KACT
KGHG
KPAO
KTIA
KIRF
KWMN
KS
KG
KZ
KN
KMDR
KISL
KSPR
KHIV
KPRP
KAWK
KR
KUNR
KDRG
KCIP
KGCC
KTIP
KSUM
KPKO
KVIR
KAWC
KPIN
KGIC
KRAD
KIPR
KOLY
KCFE
KMCA
KE
KV
KICC
KNPP
KBCT
KSEP
KFRD
KFLU
KVPR
KOCI
KBIO
KSTH
KMPI
KCRS
KOMC
KTBT
KPLS
KIRC
KREL
KFRDKIRFCVISCMGTKOCIASECPHUMSMIGEG
KFLO
KBTS
KSTC
KTDB
KFSC
KX
KFTFN
KNEI
KIDE
KREC
KMRS
KICA
KPAONZ
KCGC
KSAF
KRGY
KCMR
KRVC
KVRP
KSEO
KCOM
KAID
KTEX
KNUC
KNAR
KNUP
KNNPMNUC
KLIG
KFRDCVISCMGTCASCKOCIASECPHUMSMIGEG
KCRCM
KHDP
KGIT
KNSD
KOMS
KWMM
KPAI
KHSA
KTLA
KO
KMFO
KRCM
KCSY
KSAC
KTRD
KPWR
KID
KWNM
KRIM
KPOA
KCHG
KOM
KSCI
KFIN
KMOC
KESS
KWAC
KMIG
KSEC
KIFR
KDEMAF
KPRV
KBTR
KERG
KTER
KDDG
KPAK
KRFD
KHUM
KDEV
KCFC
KWWMN
KWMNCS
KJUST
MARR
MOPS
MU
MTCRE
MNUC
MY
MASS
MCAP
MOPPS
MAR
MPOS
MO
ML
MR
MASC
MX
MD
MP
MA
MTRE
MIL
MCC
MZ
MK
MDC
MRCRE
MAPS
MV
MI
MEPN
MAPP
MEETINGS
MAS
MTS
MLS
MILI
MTCR
MG
MC
MARAD
MIK
MILITARY
MEDIA
MEPI
MUCN
MEPP
MT
MERCOSUR
MW
MASSMNUC
MQADHAFI
NZ
NATO
NG
NI
NO
NATIONAL
NU
NPT
NIPP
NL
NPG
NS
NA
NGO
NP
NSG
NDP
NAFTA
NR
NC
NH
NE
NSF
NPA
NK
NSSP
NRR
NATOPREL
NSC
NT
NW
NORAD
NEW
NV
NSFO
NAR
NASA
NZUS
OTRA
OVIP
OPRC
OPDC
OSCE
OAS
ODIP
OIIP
OFDP
OVP
OREP
OFFICIALS
OSAC
OEXC
OPCW
OIE
OIC
OFDA
OSCI
OPIC
OBSP
OECD
ON
OCII
OHUM
OES
OCS
OMIG
OPAD
OTR
PGOV
PREL
PHUM
PINR
PTER
PSOE
PINS
PARM
PK
PBTS
PEPR
PM
POLITICAL
PARTIES
PREF
PBIO
PROP
PA
PSI
PINT
PO
PKFK
PL
PAK
PE
POLITICS
PINL
POL
PHSA
PU
PF
POV
PFOR
PHALANAGE
PARTY
PARMS
PRGOV
PNAT
POLINT
PRAM
PMAR
PG
PAO
PROG
PRELP
PPA
PCUL
PSEPC
PSA
PREO
PAHO
PGIV
PREFA
PALESTINIAN
PAIGH
POSTS
PTBS
PGOVLO
PORG
PGOVE
PLN
PINF
PAS
PUNE
POLICY
PDEM
PDOV
PCI
PGOVSMIGKCRMKWMNPHUMCVISKFRDCA
PBT
PHUMPGOV
PMIL
PNG
PP
PS
PHUH
PECON
POGOV
PY
PHUMPREL
PHUS
PRL
PGOC
PNR
PGGV
PROV
PTERE
PGOF
PHUMBA
PEL
RS
RU
RW
REGION
RP
RICE
ROBERT
RSP
RUPREL
RM
RO
RCMP
RSO
RELATIONS
REACTION
REPORT
RIGHTS
ROOD
RF
RFE
RIGHTSPOLMIL
SP
SA
SY
SF
SYR
SENV
SCUL
SOCI
SNAR
SO
SU
SG
STEINBERG
SHUM
SW
SMIG
SR
SZ
SIPRS
SI
SAARC
SPCE
SARS
SN
SYRIA
SANC
SL
SCRS
SC
SENVKGHG
SAN
SNARCS
SHI
SWE
SNARIZ
SIPDIS
SEN
SNARN
SPCVIS
SEVN
SSA
SH
SOFA
SK
ST
TPHY
TU
TRGY
TI
TX
TS
TW
TC
TFIN
TD
TSPA
TH
TT
TIP
TBIO
TSPL
TZ
TERRORISM
TRSY
TN
THPY
TINT
TF
TL
TV
TK
TO
TP
TURKEY
TNGD
TBID
TAGS
TR
UP
US
UNSC
UK
UZ
UE
UNESCO
UV
UNGA
UN
UNMIK
UNO
UY
UAE
UNEP
UG
UNHCR
UNHRC
USUN
UNAUS
USTR
USNC
USOAS
UNCHR
UNCSD
UNDP
USEU
USPS
UNDC
UNDESCO
UNCHC
UNFICYP
UNC
UNODC
UNPUOS
UNCND
UNICEF
UNCHS
UNVIE
USAID
UNIDROIT
Browse by classification
Community resources
courage is contagious
Viewing cable 05SANJOSE2158, COSTA RICA: TEXTILE AND APPAREL INDUSTRY
If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs
Understanding cables
Every cable message consists of three parts:
- The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
- The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
- The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #05SANJOSE2158.
This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS SECTION 01 OF 04 SAN JOSE 002158
SIPDIS
WHA/CEN
EB/TPP/ABT FOR EHEARTNEY
EB FOR WCRAFT
BLAMPRON
E FOR DEDWARDS
WHA/EPSC FOR KURS
LGUMBINER
COMMERCE/ITA/OTEXA FOR MDANDREA
STATE PASS TO USTR FOR RVARGO, NMOORJANI, AHEYLIGER
E.O. 12958: N/A
TAGS: ETRD ECON KTEX PGOV PREL CS
SUBJECT: COSTA RICA: TEXTILE AND APPAREL INDUSTRY
REF: A. (A) SECSTATE 146213
¶B. (B) SAN JOSE 00678
¶1. Summary: The textile industry in Costa Rica is regarded
as efficient and productive. However, the low labor costs of
China and the preferential treatment Mexico was granted under
the North American Free Trade Agreement (NAFTA) put the Costa
Rican textile industry at a disadvantage. As a result of
these and other competitive factors, Costa Rican textile
industry exports declined, and employment in the sector more
than halved from 1990 through 2004. In 2001, Caribbean Basin
Initiative (CBI) nations began realizing the benefits of the
textile-related provisions of the Caribbean Basin Trade
Promotion Act (CBTPA). Although still declining in exports
and employment, in recent years the Costa Rican textile
industry has maintained viability by concentrating on niche
products, leveraging the skills of its efficient workforce,
and taking advantage of its relative proximity to the U.S.
market. End Summary.
--------------------
REQUESTED STATISTICS
--------------------
2004* Jan-Jun 2005*
Total Industrial Production 4,765 2,504
Textile/Apparel Production 630 268
Share of Total Production (%) 13.2 10.7
Total Imports (M) 8,300 4,600
Textile/Apparel Imports 588** 288**
Share of M (%) 7.1 6.3
Total Exports (X) 6,300 3,400
Textile/Apparel Exports 547 218
Share of X (%) 8.7 6.4
Total Work Force 1,654,000 1,654,000
Manufacturing Employment (ME) 230,000 230,000
Textile/Apparel Employment 15,000 15,000
Share of ME (%) 6.5 6.5
*Source: The Foreign Trade Corporation of Costa Rica
(PROCOMER) and Council of Textile Quotas, all figures in USD
millions
**Based on information provided by the Costa Rican Textile
Chamber ) includes imports into Free Trade Zones.
¶2. According to GOCR and industry sources, the total number
of people directly employed in the textile industry is
between 11,000 and 15,000. The GOCR Social Security Agency
records approximately 11,000 workers in this industry.
However, industry experts claim at least 15,000 direct jobs,
as well as another 5,000 jobs that are indirectly tied to the
textile industry. There are approximately 67 companies in
the industry in Costa Rica. Of the estimated 15,000
employees, approximately two thirds are employed by four
large companies including Sara Lee (and its contractors),
Vanity Fair (VF), Jockey, and Borkar. Products are varied
and include suits, casual style pants, knit shirts,
underwear, and clothes with high tech sport fabrics. For the
2004 calendar year, Costa Rica exported USD 546.7 million of
textiles, of which USD 523 million went to the U.S. Seventy
seven percent of total exports to the U.S. used almost
exclusively U.S. inputs to comply with CBTPA rules.
¶3. Recent news about loss of textile and apparel jobs
include the closing of Lovable/Celebrity Co.,s operations by
the end of September 2005, reportedly due to increased
competition from China. Lovable/Celebrity makes women,s
underwear and is headquartered in Honduras, has operated in
Costa Rica for 33 years, and, at its peak 20 years ago,
employed 1,500 workers. The closing of operations in Costa
Rica means that 76 workers will have to find other jobs.
Lovable/Celebrity is moving work to its other facilities in
Honduras due to the pressure to lower labor costs and the
fact that Honduras has ratified the United States-Central
American-Dominican Republic FTA (CAFTA-DR). A Celebrity
representative stated that the textile and apparel sector is
facing many threats in Costa Rica such as the GOCR,s
indecision about CAFTA-DR. Another large company, Vanity
Fair, let 300 workers go in January 2005, and job shedding in
the industry is likely to continue.
--------------------------
QUESTIONS AND ANSWERS
--------------------------
¶4. As requested in Paragraph 5 of Ref A, Post offers the
following input.
Q1: Are host country products receiving lower prices due to
heightened international competition? Have the manufacturers
received more, less, or the same number of orders as in years
past? Have foreign investors, including Asian investors,
closed factories or otherwise pulled out of local production?
A1: Prices in the apparel market are declining not only due
to the increase in competition, but also because of more
effective and efficient production processes and the decline
in prices of raw materials, especially fabric.
In Costa Rica the companies are receiving the same number of
orders as last year. However, due to market forces such as
the above-mentioned influences, the value of textile and
apparel production is decreasing.
Industry sources say that there have not been any Asian
investors or Asian-owned textile or apparel manufacturers in
Costa Rica for several years. A U.S.-owned producer of
relatively low-end children,s clothing, Garan, is moving its
operation to El Salvador and to contractors in China.
¶5. Q2: The USG has approved seven safeguards in 2005 to
restrict the growth of Chinese imports in those product
categories, and the European Union (EU) has reached an
agreement with China to limit import growth of certain
textiles and apparel products. Have the U.S. safeguards or
the EU deal affected the export prospects of (Costa Rican)
manufacturers? Has your host government implemented, or is
it considering implementing safeguards or other measures to
reduce growth of imports of Chinese textiles and apparel
products into (Costa Rica)?
A2: In the case of socks, industry experts said the
safeguards implemented by the U.S. had a positive effect by
fomenting some uncertainty, at least in the minds of U.S.
buyers, about the potential supply of products from China.
That is, since the safeguards potentially limit the
importation of socks made in China, supply from Costa Rican
sock suppliers was seen as more reliable. Industry experts
also revealed that they have discussed the possibility of
implementing safeguards in textiles. However, this is a very
expensive and time-consuming process in which the sector has
to prove damages. Many years ago the Costa Rican Textile
Chamber, an industry association, tried to make such a case,
and they were not successful. Furthermore, the governmental
agency responsible for reviewing such requests, the Ministry
of Economy, Industry, and Trade, does not have sufficient
personnel to perform such reviews. As a result, neither the
industry nor the GOCR is thinking about pursuing safeguards
at this time.
¶6. Q3: Has increased global competition affected local
labor conditions by causing employers to reduce wages, seek
flexibility from government-required minimum wages, or
adversely affected union organization?
A3: Because Costa Rican textile and apparel manufacturers
have survived due to finding niche products, emphasizing
efficiency, and employing highly-skilled personnel, neither
labor standards nor wages have decreased. Workers are
relatively well paid, and their standard of living is high
not only compared to their neighbors in Central America but
also compared to other countries of the world. Since the
majority of exports go to the U.S., labor standards have
increased due to complying with the standards of labor
certifications which are required by major U.S. buyers.
Also, Costa Rica has a relatively strong sense of social
egalitarianism, and proposals to suppress the minimum wage
would not be looked upon positively and would be highly
unlikely to be approved. Note: Inflation is currently a
problem in Costa Rica, and wages are not keeping up. The
GOCR mandates the annual percentage increase in private and
public sector wages and has recently held them to a level
below the rate of inflation. Therefore, the real purchasing
power of workers, wages of is declining. Although there is
a union presence in most factories, the operations are
usually funded by the plant owner and are focused more on
social issues and activities. The relationships between
owners and unions in the textile industry tend to be
non-confrontational.
¶7. Q4: Has the government or private industry taken action
to increase (Costa Rica,s)competitiveness, such as improving
infrastructure, reducing bureaucratic requirements,
developing the textiles (fabric production) industry, moving
to higher-valued goods, or identifying niche markets. Does
Post think that the host government or private industry,s
strategy will be successful?
A4: During the 1990s, the Costa Rican textile industry was
whittled down to those manufacturers that were efficient
and/or specialized. Today, the Costa Rican Textile Chamber
works actively with the Ministry of Foreign Trade (COMEX) and
Customs to increase the efficacy and efficiency of the
exporting and importing process. Customs is currently
implementing a new registration system for imports, although
it is not yet up and running. Reportedly, some technical
problems have delayed its full use. The quasi-government
organization, the National Association of Industrial Textile
Exporters, works with government and private industry to
educate them on the different importing/exporting regimens
such as the Special 807 requirements and, if and when it
takes effect in Costa Rica, the U.S.-Central
American-Dominican Republic Free Trade Agreement (CAFTA-DR)
requirements. The Textiles Chamber also works with private
industry companies to upgrade their capabilities and help
steer them to more efficient methods and more
customer-friendly services.
Many of the companies in Costa Rica have already found niche
markets or have begun to offer a broader range of services to
their customers. For example, Capas Vaqueros makes GORTEX to
produce waterproof jackets and garments, one of very few
companies outside of the U.S. that is authorized to do so.
Cordero y Chavarria transitioned from only performing cutting
and trimming services to offering design and manufacturing
services for exercise wear. Coloplast started making
prosthesis bras for women who have had mastectomies and now
also makes swimwear for the same clientele.
With respect to the survival of the textile and apparel
industry in Costa Rica, the most productive step the GOCR can
take is to expeditiously approve CAFTA-DR, which will
facilitate access to the U.S. market. Lack of sufficient
infrastructure is an important issue and affects all
manufacturers, especially those that are located farther from
the port of Limon or the airports in San Jose.
Infrastructure improvements are planned to accompany the
implementation of CAFTA-DR as part of its complementary
agenda.
¶8. Q5: If (Costa Rica) is a partner in a free trade
agreement or a beneficiary of a preference program such as
AGOA, CBTPA, or ATPDEA, will this be sufficient for the
country to remain competitive?
A5: As stated previously, many textile and apparel companies
have already found their niche products, but still most rely
on the preferences granted under CBI/CBTPA to compete against
lower cost producers such as China. This industry imports
approximately 77 percent of its raw materials from the U.S.
and exports most of its finished products to the U.S., which
amounted to approximately USD 523 million in 2004. Seventy
seven percent of this amount was exported to the U.S. under
the Special 807 program. Industry experts see CAFTA-DR as
absolutely necessary for the survival of the industry in
Costa Rica and the rest of Central America. If Costa Rica
has not implemented CAFTA-DR before CBTPA expires in
September 2008, it is very unlikely that the Costa Rican
textile industry will survive with the exception of a few
very special niche products and high-valued items.
¶9. Q6: Overall, if not already addressed, does Post think
that (Costa Rica) can be competitive in textiles and apparel
exports with the end of global textiles and apparel quotas?
A6: With respect to the threat due to low labor costs in
China, the full effects of the expiration of global quotas
have not yet been felt, and Costa Rica has not yet seen a
large migration of textile jobs to places such as China.
This is due in part to high efficiency, production of niche
products, and the benefits of the Caribbean Basin Trade
Preference Act (CBTPA). However, industry experts told us
that in 2003 CarterTex moved its operation from Costa Rica to
Mexico and then later to China due to lower labor costs; this
despite the fact that the factory in Costa Rica was much more
efficient than either of those in Mexico or China. If
CAFTA-DR is not approved and the benefits of CBTPA go away,
experts believe the Costa Rican textile industry will all but
disappear. The loss of 15,000 jobs from the textile industry
in Costa Rica would affect a population five times that size
when family members of workers are included.
The only hope to maintain exports of textiles and employment
in Costa Rica is to have some advantage in efficiency, labor,
and/or trade preferences. Benefits under CBTPA, unless
extended, will expire in September 2008. Costa Rican
industry representatives are some of the most fervent
supporters of CAFTA-DR because the agreement makes permanent
the tariff-free exporting to the U.S. of their products.
Costa Rican textile and apparel manufacturers will continue
to be highly efficient and employ highly-skilled workers.
However, it is difficult to see the Costa Rican textile
industry being able to contend with the fierce competition
from China without the advantage of CAFTA-DR.
FRISBIE
FRISBIE