Paraguayan garment firm hit by new Argentine law

13 Mar '12

1 min read

Texco SRL, a Paraguayan manufacturer and exporter of textile and clothing items, has filed an application with the Ministry of Justice and Labour seeking suspension of employment contracts of 42 workers for a period of 90 days.

The company said it had to resort to such a step due to the implementation of non-automatic licensing system by Argentina from February 1 this year.

Under the system, import licenses can be delayed for a period ranging from 30 to 60 days. In other words, an import declaration needs to be made in advance, failing which goods will have to wait in their home country before they can be allowed to enter Argentina.

Texco said the initial suspension of three months could be further extended if problems persist with exports to Argentina, which is the main market for the company.

The new Argentine law has severely affected the export of Paraguayan goods to Argentina and apparel exports have been the hardest hit.

In January 2012, Paraguay exported apparels worth US$ 3.676 million to Argentina. But, in February 2012, the figure decreased by 90 percent to US$ 387,651, mainly owing to the implementation of non-automatic licensing system.

Fibre2fashion News Desk - India